Corporate watchdog David Knott has stood down from his post on the board of the Australian Prudential Regulation Authority (APRA) in the wake of the collapse of HIH Insurance.
Knott had been a director on the APRA board since last November while also holding the position of head of the Australian Securities and Investments Commission (ASIC).
Recently he has been criticised about a possible conflict of interest in leading ASIC’s investigation into the collapse of HIH Insurance and APRA’s failure to prevent it.
As a result from mounting public pressure, Knott resigned on Tuesday, but only announced it to an Australian Institute of Company Directors lunch in Adelaide yesterday, according to AAP reports.
He told the lunch that he resigned in order to avoid any ongoing conflict which might arise from his dual role in both organisations.
This announcement has followed closely on the heels of his stepping aside from leading the ASIC investigations into HIH on Monday. These would be continued by deputy chair Jillian Segal and acting commissioner Ian Johnston
However, Knott has maintained that his recent decision had not been conscience driven, as he still believes that he does not have a conflict of interest.
“Given that I have been a director of APRA since last November, it has always been patently clear to me that I could not be involved in any investigation into APRA,” he said.
“However, it has always been my view that I had no conflict of interest in relation to ASIC’s investigation into potential breaches of the Corporations Law.”
Knott further emphasised this claim stating in an ASIC statement that the Government Solicitor General stated he was not aware of anything which “might suggest in any way that Mr Knott has acted improperly or could fairly be criticised in relation to any acts or omissions in relation to APRA or ASIC”.
Knott’s membership of the APRA board is within the bounds of the APRA Act which requires representation from ASIC. Knott was also involved in the creation of the body and held an executive position until July 4, 1999.
However, ASIC has released a statement which says that while Knott held the role of chief operating officer for the year ending June 1999, at no time did that role include responsibility for supervision of any companies regulated by APRA.
