Utegate divisions loom over John O'Sullivan's mooted ASIC chairmanship

The Federal Opposition has formally signalled it will be opposing any appointment of former banker, John O’Sullivan, as the new chairman of the Australian Securities and Investments Commission (ASIC).

Both the Shadow Treasurer, Chris Bowen and the Shadow Minister for Financial Services, Senator Katy Gallagher said the party would not be support O’Sullivan’s appointment were it to be formally put forward by the Government.

“Labor makes it very clear, we will not support Mr O'Sullivan's appointment, should it proceed,” Bowen and Gallagher said in a statement.

The term of current ASIC chairman Greg Medcraft expires in November.

Mr O'Sullivan is currently chairman of Credit Suisse's local investment bank. He was previously General Counsel of the Commonwealth Bank of Australia and a partner at Freehills.

“Labor does not do this lightly," their statement said.

"We do this in light of our most serious concerns and our respect for the importance of ASIC's independence.”

It said the reputation of the corporate regulator and its leadership team had to be beyond reproach.

The mooted appointment emerged in June this year when canvassed by the Rear Window column in The Australian Financial Review.

“On 24 June this year, in response to earlier reports that this appointment was receiving serious consideration by the Turnbull Government, Federal Labor provided a clear warning on appointing such a partisan figure linked to the Utegate affair which clearly tainted Malcolm Turnbull, to such an important economic institution.”

“There were emails released as part of the investigations into the Utegate affair which showed contact between Mr O’Sullivan, then Chairman of Credit Suisse’s Australian investment banking operations, and disgraced Treasury official Godwin Grech,” the statement said.

“Mr O’Sullivan has been a Liberal Party member in Mr Turnbull’s electorate, a President of the Liberal Party’s Wentworth federal electoral conference and previously donated to Mr Turnbull’s Wentworth Forum.”

“Australia has well-respected economic regulators based on a tradition of non-partisan appointments,” the joint statement said.

“The Australian Securities and Investments Commission has a vital role to play in regulating financial conduct and protecting Australian consumers and the last thing it needs is this sort of controversy fixing itself upon ASIC’s leadership team.”