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The Australian Prudential Regulation Authority (APRA) has disqualified the former chair of Xinja Bank Limited (Xinja), Lindley Edwards, from being an accountable person of any authorised deposit-taking institution¹ under the Financial Accountability Regime (FAR).

Ms Edwards is disqualified for a period of six years for failing to comply with her accountability obligations as an accountable person of Xinja during 2020. Ms Edwards is the third accountable person of Xinja that APRA has disqualified. APRA announced its disqualifications of Eric Wilson for eight years and non-executive director Craig Swanger for 10 years on 9 October 2025.² This is now APRA’s third disqualification under the FAR.

The disqualification follows APRA investigating the impact on Xinja’s capital position of undisclosed “side agreements” between Xinja and some of its investors in 2020 and whether Xinja misled APRA about its true capital position. APRA’s investigation began in May 2021 and Ms Edwards’ disqualification has been the subject of review processes.

APRA determined that Ms Edwards failed to comply with several of her obligations as an accountable person under the Banking Executive Accountability Regime, which the FAR superseded for the banking industry in March 2024.

APRA found that Ms Edwards failed to:

• act with due skill, care and diligence when Xinja raised capital that she should have known could not qualify as CET1 capital³ because of the side agreements and did not take steps to ensure that Xinja properly classified and reported the capital, or disclosed the side agreements, to APRA;
• deal with APRA in an open, constructive and cooperative way by not informing, or being satisfied that Xinja had informed, APRA of the existence of the side agreements or of concerns raised at the time within Xinja about the capital; and
• take reasonable steps to prevent matters arising that would adversely affect Xinja’s prudential standing where she did not take steps to put in place adequate procedures within Xinja to ensure Xinja properly classified and reported the capital it raised.

APRA’s decision did not involve allegations or findings of dishonesty or lack of integrity on the part of Ms Edwards.

APRA Member Therese McCarthy Hockey said Ms Edwards’ disqualification is further demonstration that APRA will hold senior individuals to account when they fail to meet their accountability obligations.

“In order to protect depositors and the financial system, it is essential APRA has a complete understanding of the capital position of the banks it supervises and their ongoing capacity to withstand unexpected shocks. It is incumbent on senior individuals to be open and cooperative with APRA so that APRA can effectively assess the risks that a bank and its depositors are exposed to. Board members are in a position of ultimate responsibility for all aspects of governance, oversight and compliance with all relevant laws and Ms Edwards’ conduct fell short of her duties.

“Ms Edwards inappropriately relied on others and failed to ensure that Xinja was sufficiently capitalised in the months leading to its failure, or that its true capital position was reported to APRA. Her disqualification reflects the seriousness of her conduct.”

Background

Between May and August 2020, Xinja entered agreements with three investors by which it purported to raise CET1 capital.  Xinja reported to APRA that the capital it raised from the investors was CET1 capital. However, the capital raisings involved “side agreements” between Xinja and the investors, which APRA was not informed of and which fundamentally altered the nature of the capital, altering its ability to absorb losses and resulted in the capital not qualifying as CET1 capital.

Xinja (now A.C.N. 618 937 054 Limited) is in liquidation after returning its deposits and handing back its ADI licence to APRA in 2021.

Footnotes

¹ Ms Edwards is also disqualified from being or acting as an accountable person of any authorised non-operating holding company (NOHC) of an ADI and any significant related entity of an ADI or NOHC of an ADI.

² APRA disqualifies two directors of Xinja Bank under Financial Accountability Regime | APRA

³ CET1 capital represents the highest quality capital that an ADI must hold and ensures an ADI is able to absorb losses immediately when they occur.

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