Australia's prudential regulator has expressed caution after a superannuation fund appointed three members to its board nominated by a construction union fighting allegations of corruption and links to organised crime.
The Construction and Building Unions Superannuation Fund said on Tuesday it had accepted the nominations from the Construction, Forestry and Maritime Employees Union to replace three CFMEU-nominated directors who resigned under pressure from the fund's board in August.
The CFMEU has been at the centre of controversy since revelations in July the influential union had ties to organised crime figures and was involved in kickback schemes, bullying and other corrupt conduct.
The federal government and coalition teamed to pass legislation that enabled the union to be placed into administration against its consent, which has led to mass protests from construction workers.
Cbus, an industry super fund with 920,000 members and $94 billion in funds under management, has also found itself under scrutiny given its ties to the CFMEU, which holds 21 per cent of the fund and is allowed to appoint three members to its 13-member board.
The new board members announced on Tuesday are Jason O'Mara, the general manager of the Canberra Tradesman Union Club; Paddy Crumlin, the national president of the CFMEU; and lawyer Lucy Weber, director of legal and industrial programs in the CFMEU's national office.
Mr O'Mara was one of the three directors who resigned in August, while the others are new.
A Cbus spokesperson said the trio, along with the 11 other members of the Cbus board, were determined to satisfy a "fit and proper persons test" as part of an independent review by Deloitte.
The review was commissioned after the Australian Prudential Regulation Authority required the trustee to engage an independent expert to look into Cbus' compliance with that fit and proper person test.
APRA said it wasn't satisfied the review was complete.
The regulator said it expected Cbus to provide it with the independent review report so it could consider whether taking further action was appropriate.
The regulator noted appointments to Cbus board were the responsibility of the trustee and APRA did not have the power to approve or prevent board appointments.
The Cbus spokesperson said three directors shared a determination to generate strong, sustainable returns for members.
