National Australia Bank is to ask its shareholders to oust non-executive director Catherine Walter who has refused to resign over allegations that she tried to discredit a critical PricewaterhouseCoopers (PwC) report into rogue trading at the bank.
In a statement, new NAB chairman Graham Kraehe says seven non-executive directors have requested an Extraordinary General Meeting (EGM) following Walter's refusal to resign over comments made about the PwC report into the rogue trading scandal, which cost the bank A$360 million.
Among the failures at the bank, the report found that the audit committee -which was chaired by Walter up until the release of the report - could have detected the unauthorised trading.
Kraehe says the non-executive directors agree that Walter made and continues to make unfounded attacks on the integrity of the report and that she failed to co-operate with the investigation into irregular foreign currency options trading in a manner that was acceptable. He alleges that she also failed to give satisfactory assurances that she would act only within the board during the investigation.
"The non-executive Directors are unanimous in their view that without the trust and respect of her fellow Directors, Mrs Walter can no longer function effectively as a Board Director of the National," says Kraehe.
Walter has proposed a counter resolution to sack the entire board of NAB, barring new CEO John Stewart.
The bank hasn't yet said when the shareholder meeting is likely to be.
NAB sacked four traders and four senior managers following the release of the PwC report which said that the dealers exploited loopholes in the bank's inhouse currency options trading system, Horizon, to cover up illegal trading activity.
Earlier this week, Australian regulatory body Aptra (Australian Prudential Regulatory Authority) ordered the bank to urgently review all IT systems within its trading operations.