It’s hard to keep the Federal Court a secret
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- Published: Friday, 14 June 2024 10:44
On 5 June in a prosecution of Active Super by ASIC, the Federal Court found the fund had been guilty of “greenwashing” and had misled and deceived members and others about what they did own, and not own, and how that reflected their responsible investment commitment.
The Financial Review headed their article “Ethical” fund’s excuse for gambling, coal stakes unbelievable: judge, and the Herald went with $14b super fund misled investors by greenwashing, court finds. Both followed up with further articles about New South Wales parliamentarians sitting on the Board as representatives of LGNSW and being paid significant fees, and the Herald editorialised against the practice. This is now national news of significant interest. Let’s hope bad luck doesn’t go in threes.
depa will remain a Shareholder of LGS Pty Ltd (aka Active Super) until it merges with a Victorian fund next year. I was a foundation director until 2013, and our last director, Sam Byrne, resigned from the board in a reduction of union representatives in July 2019. We had no influence on the operation of the Fund as a shareholder and with the Director, and there is a limit to how many isolating 7-1 votes anyone should have to put up with.
The time we did have a Director, the fund had systems in place to ensure that if they said they didn’t own a certain kind of investment, then they didn’t. Somehow, those protections have failed.
As a Shareholder we have limited rights and our pleas, after ASIC announced the prosecutions, that the fund should put something on their website acknowledging what was happening were rejected, allegedly “on legal advice”. There is no advice on their website about the successful prosecutions, the judgement has been made and when the case resumes it will be down to how much of ASIC’s costs are to be paid by Active Super, and the extent of the penalty.
This is a big deal for us. Most importantly, we had no influence on the fund, no input, nor anyone implicit in decisions that created this in 2021. We are all in the clear.
I’m reluctant to say anything else, but members have asked, and this is public knowledge. I reckon I know why this has happened, maybe in July.