APRA bans former Harts directors for life

TheAustralian Prudential Regulation Authority(APRA) has permanently disqualified two former Harts Australasia executives from the industry for failing to demonstrate due competence, care or diligence while directors of the Harts Staff Superannuation Fund.

Graham Stewart and Ian Stevens, under the Superannuation Industry (Supervision) Act, have been prohibited from acting as trustees, investment managers or custodians of a regulated superannuation entity or as responsible officers of a superannuation trustee, investment manager or custodian.

The Brisbane-based Harts fund was the employee superannuation fund for Harts Australia, which was wound up after being liquidated in November 2001.

APRA concluded both directors failed to exercise “a reasonable degree of care and diligence in carrying out his trustee duties”.

Specifically the regulator found Stewart and Stevens shirked their trustee responsibilities and independence by failing to conduct satisfactory due diligence in relation to a $900,000 in specie employer contribution to the fund in the form of a mortgage over land in South Australia.

The regulator’s deputy chairman, Ross Jones says its primary concern is to protect the best interests of superannuation beneficiaries, and is currently seeking to recover the assets in question on behalf of the fund’s members.

“APRA will remove trustees who have failed to exercise due competence, care, diligence or prudence from key roles in the industry,” Jones says.

The regulator asserts the SIS Act requires trustees, amongst other things, to act honestly and in the best interests of beneficiaries, to exercise care, skill and diligence, and to formulate and give effect to an investment strategy for the fund that balances risk and return.