We’ve just been through months of submissions, in-fighting, and reviews, but now just as the FoFA amendments are beginning to roll out, the head of it all has been drawn into a major corruption case.
Assistant Treasurer Senator Arthur Sinodinos stood down yesterday after media furore about his role in the case which has seen Australian Water Holdings in front of the NSW Independent Commission against Corruption (ICAC) due to its links with crooked former powerbroker Eddie Obeid.
The commission heard that Sinodinos, the then NSW Treasurer of the Liberal Party, was paid $200,000 a year for not “more than 100 hours” of work after his 2008 installation on the board of AWH. He stood down from the board in November 2011 to take his position in the senate.
The case will investigate whether or not Obeid lobbied Labor colleagues on behalf of the company.
On Tuesday council assisting Geoffrey Watson, SC, questioned whether Sinodinos’ instalment on the board was a strategic way to open connections with the Liberal Party, and stated; “there will be evidence that he tried to do so”.
“Based upon PricewaterhouseCoopers’ valuation if the PPP came through Mr Sinodinos would have enjoyed a $10 million or $20 million payday,” Watson told ICAC.
The Sydney Morning Herald
reported that Sinodinos has since abandoned his rights to shares in the water infrastructure company and denies any wrongdoing.
‘‘[He] will attend ICAC as a witness and is looking forward to assisting the inquiry,’’ his spokeswoman said.
Prime Minister Tony Abbott has announced while Sinodinos is stood down his ministerial duties will be undertaken by the minister for finance Mathias Cormann.
Some members of the financial services industry are keeping a keen eye on the case as the outcome could potentially affect the clout of legislative changes that have been pushed by the coalition.
Max Franchitto, a business analyst who gives best practice advice to planners, expected there to be more delays for the FoFA amendments - which started being introduced into Parliament yesterday - due to the upheaval.
"For me it's another reason for everything to be delayed. There will be more consultation with individuals and people will see this as an opportunity to try and convince the new minister to do differently," he said. "[Cormann] might see things slightly differently but we're not going to change from apples to oranges. It's just going to put another stretch on the timeline and there will be more debates and lobbying. In my humble opinion of 32 years in financial services, the industry needs to get on with it and advisers need to get on with what they do best."
Brad Fox, the CEO of the Association of Financial Advisers, also told Wealth Professional
that he’s not concerned, and he’s yet to receive any communications from worried advisers.
“I think this rises above an individual minister. I think [the FoFA amendments] are clearly the coalition stance of what is good for the future of financial advice in Australia,” he said.
What do you think? Let us know in the comment box below.