Record profit posted, as legal action filed against ex CEO
MEMBER-owned credit union bcu will report a record profit of $10.7million at its upcoming AGM, despite news today of legal action involving its former chief executive.
The credit union has filed a counter claim to a $3.4 million lawsuit lodged by its former CEO Lyndon Kingston in the Queensland's Supreme Court, in which he alleges bcu broke his contract and still owes him bonuses following his sacking.
In court documents, bcu claims its former boss "fraudulently concealed" more than $117,000 in secret commissions by doctoring paperwork sought by his previous employer, the Australian Prudential Regulation Authority.
Mr Kingston, formerly served as a senior manager at the banking watchdog APRA.
He is accused in the lawsuit of running an array of scams, including engineering sham payouts for his wife and ripping off the credit union.
It's alleged the former CEO allegedly lined his pockets by rorting expenses and taking kickbacks from contracts before he was sacked from a job he claims entitled him to up to $1 million a year.
bcu alleges Mr Kingston also took kickbacks from $2.5 million in dodgy contracts.
Court documents also claim the former APRA manager gave his wife a $340,000 "sham redundancy" and rorted expenses.
He was last year stood down at a board meeting, before leaving the company.
bcu is now suing to recover damages.
As news of the legal case broke, bcu announced it had achieved its best-ever financial result representing a 17% profit increase on the last financial year, as total revenue grew by 5.9% to $77.5million and more than 3,400 new members joined the community-focused credit union.
The financial results were announced as the ABC today reported bcu had claimed in the Queensland Supreme Court damages against the former CEO, alleging that he misled the board and financially benefited from contracts he approved.
Mr Kingston left bcu in September, 2017.
bcu chairman Steve Targett reassured members that the matter was being dealt with appropriately and would not tarnish the institution's best-ever financial result.
"We are engaging in this action to first defend the claims made by the former executive surrounding his exit from bcu and second because we believe that it is the right thing to do in the circumstances, not because it involves a large amount of money in the great scheme of things," Mr Targett said.
"The monetary amounts associated with the legal action have been deemed by independent auditors to be immaterial to our financial operations.
"However, the conduct identified is not acceptable under bcu's policies or values and we have taken action to demonstrate that this type of behaviour is intolerable to our board, our employees and our members."
Mr Targett said bcu's financial result was a testament to the loyal support of its members and the hard work of staff in the communities in which bcu operated.
"bcu prides itself on giving a fair go to our members, and we have achieved these record results while still delivering outstanding service and fast, simple and convenient banking," he said.
"The results are a credit to our Acting CEO Alan Butler, who has successfully led bcu through a period of leadership transition over the past year to achieve the outstanding result we see today.
"This record profit will allow bcu to further invest in enhancing our member banking experiences, and supporting our local communities such as Coffs Harbour, where we have just opened our new branch in Coffs Central."