APRA seeks disqualification of First Super co-chair Michael O’Connor

The Australian Prudential Regulation Authority (APRA) has commenced proceedings in the Federal Court of Australia seeking civil penalties and the disqualification of First Super Pty Ltd (First Super) director and co-chair Michael O’Connor. Mr O’Connor is also the National Secretary of the Manufacturing Division of the Construction Forestry and Maritime Employees Union (CFMEU).

The action follows an investigation by APRA into a contract between First Super and the CFMEU for member and employer services (MESC contract). The MESC contract concluded in 2023.

APRA alleges that Mr O’Connor breached a number of the director covenants contained in the Superannuation Industry (Supervision) Act (SIS Act) including the covenants to act honestly, exercise the same degree of care, skill and diligence as a prudent superannuation entity director would exercise, act in the best financial interests of beneficiaries, and to prioritise the interests of beneficiaries when in a position of conflict. It is alleged that:

1. Mr O’Connor approved the appointment of a CFMEU employee to perform a full-time role under the MESC contract and: 
   
   1. was aware that the employee continued to undertake a significant portion of work for the CFMEU;
   2. directed or approved the employee carrying out the work for the CFMEU;
   3. was aware that First Super was paying fees under the MESC contract, which included an amount covering the full-time wage of the employee; and
   4. did not inform or seek approval from First Super for the employee to carry out work for the CFMEU or seek to reduce the fees payable by First Super under the MESC contract.
       
2. Mr O’Connor was involved in the negotiation of the extension of the MESC contract on behalf of the CFMEU in circumstances where he was in a position of conflict.

APRA is seeking declarations and penalties against Mr O’Connor in relation to the alleged contraventions. APRA is also seeking orders disqualifying Mr O’Connor from acting as a responsible officer of any corporate trustee or superannuation entity for a period determined by the court.