Domenic Martino, CEO of the Australian arm of Deloitte Touche Tohmatsu, resigned last week in the wake of publicity surrounding his role as director of failed telco company New Tel. The possibility exists that criminal charges may be brought against Mr. Martino and other directors of New Tel if it is determined that the company's directors knew of New Tel's insolvency, possibly for as long as 12 months. Described by daily newspaper The Australian as "one of Australia's more breathtaking corporate collapses," there is speculation that New Tel raised more than A$100 million all the while knowing the company was insolvent.
Mr. Martino has stated he believes an investigation into his role at New Tel will show he "properly fulfilled his duties as a director." He resigned his directorship at New Tel in February 2002. New Tel went into liquidation in December, 2002.
Lynn Odland, former Chairman of the Australian Deloitte, has been appointed interim CEO while the firm looks for a permanent replacement for Mr. Martino. Since Mr. Martino's resignation from Deloitte the firm has changed its policy regarding directorships in public companies, stating that now partners and employees of the accounting firm may no longer hold such directorships.
"While holding directorships has been accepted practice in Australia for many years by legal, accounting and management consultants, Deloitte believes changing market attitudes towards corporate governance and our own commitment to best practice in governance globally, dictates a change in policy," said Mr. Odland.