The National Australia Bank has been served a stark warning to be more transparent with the banking royal commission, with commissioner Kenneth Hayne reminding the giant that this is a public inquiry.
In one of the more dramatic chapters of this round of hearings, NAB was forced to hand over a damaging letter, despite pleas to keep a document private in the name of “wider public interest”.
“The inquiry is a public inquiry. That’s the premise from which we begin, is it not?” Mr Hayne reminded NAB’s legal counsel Neil Young on Tuesday.
Mr Young was calling for a non-publication direction of a letter from NAB directors to the corporate regulator, ASIC, in which the directors argued against a court-approved enforceable undertaking due to its error-disclosure breaches.
The error in question saw thousands of NAB and MLC customers pay fees for services they didn’t receive after they were transferred among different NAB super products.
Mr Young said that while it was undisputable that the letter required scrutiny from the royal commission, the publication of the letter “at large” would be to “the potential detriment to the public interest in ensuring that negotiations and discussions of this kind are conducted frankly and fairly”.
He said there would also be potential detriment flowing to NAB following the publication of the letter.
“The detriment to our client is that there would be unnecessary public revelation of the various concessions and compromises that my client was prepared to put forward in July 2016 in the context of this issue that had arisen with ASIC.”
However, Mr Hayne said that the royal commission had a duty to “strike a balance” between its role and maintaining NAB’s interests, and the interests of other institutions when dealing with the regulator.
With this in mind, he said Mr Young’s warning that publication could “inhibit or chill” ASIC’s relationships with financial entities wasn’t enough to keep the document private.
The royal commission continues to examine the contents and implications of the letter today.
My Business' sister publication Nest Egg is covering this round of hearings live on its blog, as the royal commission looks into the superannuation industry.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.