(Bloomberg) -- The co-chair of Australian pension fund First Super has stepped down from its board after the regulator announced plans to sue the director over his ties to a construction union mired in scandal.
The Australian Prudential Regulation Authority has commenced legal action in the Federal Court against Michael O’Connor for breaching a number of director duties, according to a statement Friday. The regulator is also seeking to disqualify him from acting in any other similar roles.
O’Connor is the National Secretary of the manufacturing division of the Construction Forestry and Maritime Employees Union, which has been put into administration following allegations of corruption and links to organized crime. He didn’t immediately respond to a message seeking comment.
APRA has accused O’Connor of failing to act honestly and in the best interests of the beneficiaries of First Super, which oversees A$4.5 billion ($3 billion) of assets. The regulator says he approved the appointment of a CFMEU employee to a full-time role at the fund while they were still performing work for the union.
The legal action comes a week after three directors with ties to the CFMEU departed Cbus, one of the country’s largest pension funds.
Cbus Directors Leave Amid Australian Construction Union Scandal
O’Connor has voluntarily stepped down from his roles at First Super “until the court proceedings are determined,” the fund said in an emailed statement Friday.
APRA is also seeking to disqualify O’Connor from acting as a responsible officer of any corporate trustee or superannuation entity “for a period determined by the court.”
As Australian pension assets near the A$4 trillion mark, funds are attracting more scrutiny around environmental, social and governance issues. While most of the attention has so far been on green pledges, governance is also coming under the spotlight as boards navigate higher-stakes investment decisions.
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