Mr Crennan resigned a short time later following revelations ASIC had also paid $69,621 in rent on his behalf following his relocation from Melbourne to Sydney. Both men agreed to repay the money.
The former inspector-general of intelligence, Vivienne Thom, is conducting an independent review of ASIC’s remuneration and procurement processes which is expected to be provided to government by Christmas.
The issues came to light after Auditor-General Grant Hehir took the remarkable step of writing to Treasurer Josh Frydenberg to “gain greater confidence appropriate action would be taken” on the issue.
“It felt to me like we weren’t getting as much traction getting management attention to it as I thought was appropriate for the significance of the issue,” Mr Hehir said. “This was the first time I’ve written such a letter in five years.”
He also raised concerns about ASIC providing information to his office after the conclusion of the audit process.
“We rely on management to give us everything available in order to provide an appropriate opinion,” he said. “In this case, receiving additional evidence after the close of the audit I didn’t think was appropriate governance.”
Ms Chester laid the blame squarely at Mr Shipton’s feet, saying he only provided documents to ASIC “late one evening” from his private computer.
The acting chairwoman also said the full commission had been kept in the dark about the nature of some of the relocation expenses.
“No one ever told us it was ongoing rental payments, because that would have been a red flag for me immediately,” Ms Chester said. “I think it is fair to say that does raise a trust issue.”
Ms Chester added that had there been full disclosure by Mr Shipton “I don’t think I’d be having this discussion with you today”.
Earlier in the hearing, former Australian Competition and Consumer Commission chairman Graeme Samuel said part of ASIC’s problem was “a relegation of the organisational governance”.
Mr Samuel said the decoupling of the roles of chairman and chief executive, such as had occurred at the ACCC, was a necessary governance reform.
The creation of a chief executive role was a recommendation of Ms Chester’s 2015 review but Mr Shipton and other commissioners had overruled the appointment.
“This was something that was discussed last year when I first arrived at commission,” she said. “I’d understood that was going to be the internal governance model … when I agreed to join as a deputy chair.”
But she said this was overruled by Mr Shipton and other commissioners.
Labor has previously described the relationship between Mr Shipton and Ms Chester as “cooked” and called on the government to “clean up” the issue quickly without waiting until the end of the year.
The Morrison government has indicated it will move to restructure ASIC and has warned it not to stray into the realm of policymaking.