Fok told the committee 80 per cent of claims subject to the litigation had so far been resolved, with $755 million in benefits paid out.
The Senate committee also heard from the Australian Prudential and Regulation Authority, which has ordered Cbus to commission an independent review of whether three directors linked to the disgraced construction union, the CFMEU, had been fit to sit on the fund’s board and whether they had acted in the best financial interest of members.
APRA executive director of superannuation, Carmen Beverly-Smith, said she could not comment on the review it had ordered, but it planned “for that to be completed in the near term rather than the long term”. That governance review will be released publicly.
Cbus chief executive Kristian Fok.Credit: Natalie Boog
The regulator’s general counsel, Lucinda McCann, added that APRA had been undertaking a review of its existing governance standards across all the industries it supervised and would release a discussion paper with proposals in coming weeks.
Committee chair and Liberal MP Andrew Bragg grilled both APRA and Fok on Cbus’ relationship with the CFMEU, which was placed into administration after this masthead published allegations of corruption and criminal infiltration of the union.
The super fund paid about $1 million to the CFMEU last year, according to newly released data by APRA, and has had three CFMEU members on its board. The administrator has nominated three directors to the board – Paddy Crumlin, Jason O’Mara and Lucy Weber – who are yet to be endorsed.
“We have been in contact with [the administrator], given that they are now responsible for the nomination of directors, but of course, trustee director nominations … put forward by the administrator are very much a matter for them,” McCann said. “We don’t have a specific role in approving or disapproving of individual director appointments.”
Committee chair Andrew Bragg Credit: Oscar Colman
Earlier, when Fok was asked whether he believed the CFMEU-linked directors were fit to be on the board of Cbus, he said that was a matter for the current directors.
He also said he would await the findings of the APRA-ordered review to determine whether Cbus would continue paying the union money, but that the fund believed “there is incredible value with that relationship”.
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“We will take into account any findings that come from the independent review, but we will make commercial decisions across any partnership activity, and if we think that continues to be a value driver, we would expect that it would be something that we would continue to pursue,” Fok said.
Bragg asked Fok why the fund’s chairman, former federal treasurer Wayne Swan, publicly declared Cbus could invest more than $500 million in the Housing Australia Future Fund. The Cbus chief said Swan had made those public comments because he was given an opportunity.
“It’s alongside the strategy that has been agreed, and again, it was all subject to finding opportunities that meet our requirements,” Fok said. “As a growing fund, one of the things that we can derive a lot of benefit from is getting early access to opportunities.”