This post has been previously published by The West Australian.

Westpac has uncovered “sophisticated and externally perpetrated” potential fraud, estimated at about $200m after tax, and has kicked off court action in response.

The major bank said on Friday it had started Federal Court proceedings against Forum Finance over a portfolio of equipment leases with Westpac customers it had arranged, which were referred to Westpac’s Institutional Bank.

Police, the Australian Securities and Investments Commission and Australian Prudential Regulation Authority had been notified, with the extent of any loss dependent on the outcome of its investigations and recovery actions underway, Westpac said.

“At this stage it appears no Westpac customer has suffered a financial loss,” the bank said.

The bank has obtained asset freezing and search orders to preserve available assets and relevant information.

Chief executive Peter King said it was a complex issue.

“At this preliminary stage, the potential fraud is sophisticated and appears to have been perpetrated externally,” Mr King said.

Also on Friday, ASIC announced Westpac would pay $87m in compensation to former clients of its financial advisers who were not notified about various corporate news between 2005 and 2019, meaning they may have missed out on various share trading opportunities.

These activities by publicly listed companies included share buybacks, share purchase plans and takeovers.

As a result, the clients missed out on opportunities such as buying additional shares at a discount to the market price and receiving a tax benefit from selling shares.

ASIC estimates 328,000 potential missed corporate action notifications affected about 32,000 customer accounts.

Westpac aims to compensate most of the affected customers by the end of this year, the corporate watchdog said.