ANZ chairman Sir John Key says departing chief executive David Hisco believed he had authority to spend tens of thousands of dollars on chauffeured cars but has left the bank because of a "lack of transparency" in recording his expenses.
ANZ chairman and ex-Prime Minister John Key. Photo: RNZ / Dan Cook
Today it was announced Mr Hisco was leaving the New Zealand arm of the bank, having been its chief executive since 2010.
It was discovered he had spent tens of thousands of dollars on chauffeured-driven cars for personal use and on storing his wine in Australia.
Sir John told Checkpoint an internal review of executive's expenses was launched in May, but Mr Hisco had taken "genuine" leave for health reasons last month.
He said the pressure of the investigation would have contributed to the stress Mr Hisco was under, but his leave for health reasons and his departure from the company were "separate issues".
Listen to the interview here
Sir John told Checkpoint Mr Hisco believed he had authority from the previous chief executive to spend money on the cars, but because this was "oral authority" it was difficult to prove or disprove.
He said he took Mr Hisco at his word, as he had been "trustworthy" throughout his time at New Zealand's biggest bank.
"Essentially, he believes, and we accept that he had authority for using some expenses which arguably, he would argue was business, but actually they were personal expenses, primarily in the use of chauffeur-driven cars."
However, the issue was with record-keeping, which was not transparent, and in some cases, expenses were characterised as business when they were clearly personal.
Sir John said Mr Hisco had charged the costs of storing his wine in Australia to the bank.
"Because he was coming as an ex-pat for a temporary period of time, he didn't want to bring his wine over because he would have had to pay excessive amounts of duty, so he just said 'look, I'll leave that in Australia'."
Asked if it was wilful deceit or not, he said it "wasn't recorded accurately".
Both parties had agreed he should leave the company, Sir John said.
"He's actually been an outstanding chief executive, he's done a great job over the last nine years, but he's had a blind spot in regards to this area. In the end, if we had a more junior person in the organisation who did this, we would also part ways."
At her post-Cabinet media conference, Prime Minister Jacinda Ardern said there are expectations of a certain standard of conduct from senior leaders in New Zealand, whether it's in the public or private sector.
However, Ms Ardern was reluctant to comment specifically on Mr Hisco's situation saying it was obviously an employment matter.
Mr Hisco would receive his contractual and statutory entitlements and un-taken leave, but will forfeit unused options to buy shares in ANZ, worth about $6.4m. He was paid about $3.8m a year.