SYDNEY (Reuters) - Australia and New Zealand Banking Group and the local units of Citigroup and Deutsche Bank cannot properly respond to criminal cartel charges because they are still waiting for the prosecutor to detail its full case, a barrister for Citi told a packed Sydney courtroom on Tuesday.
Australian authorities filed criminal charges in June against the trio and six senior bankers over the sale of A$3 billion ($2.17 billion) in ANZ shares in 2015, and subsequent trading by the underwriters.
The case could have major implications for the underwriting business and lead to increased scrutiny from regulators worldwide.
Lawyers appeared briefly at the procedural hearing which lasted only a few minutes. None of the accused executives were present.
Citi’s barrister, Rob Ranken, said it required full details of the allegations before the bank could prepare a defense.
“Until we know what the precise nature of the case really is we’re not really in a position to [respond],” Ranken said.
The government accuses the banks of forming a criminal cartel to either “directly or indirectly” restrict the supply of ANZ shares or maintain the price of ANZ shares, according to court documents.
Barrister Bharan Narula, representing the Commonwealth prosecutor, said there was a delay in serving some documents, but that recordings and transcripts on which the case will rely had already been provided.
The prosecution was told it needed to provide full details of its case by March 19. The case was adjourned until April 9.
Citigroup and ANZ, which are defending the charges, did not immediately respond to a Reuters request for comment on Tuesday. When charged last year, Citigroup said it had “operated successfully in Australia in this manner for decades”.
Deutsche referred to a previous statement saying it will vigorously defend the charges and its staff.
JPMorgan, which underwrote the capital raising along with Citigroup and Deutsche Bank, has not been charged. A representative declined to comment on Tuesday.
The allegations stem from an investigation by the Australian Competition and Consumer Commission, the country’s competition watchdog.
ANZ, Australia’s third-largest bank, is also facing civil charges over the same 2015 share issue by the country’s corporate watchdog for allegedly failing to disclose a placement shortfall as part of that deal.
In the civil court filing, the Australian Securities and Investments Commission said ANZ broke company laws by failing to tell investors that its underwriters had bought A$791 million of the A$2.5 billion shares it was trying to sell.
Reporting by Tom Westbrook in SYDNEY; Additional reporting by Paulina Duran; Writing by Jonathan Barrett; Editing by Stephen Coates and Christopher Cushing