IOOF brass tar­geted

Reg­u­la­tor had con­cerns about con­flict of in­ter­est since 2015

Geelong Advertiser - - BUSINESS BEAT -

SHARES in IOOF Hold­ings have lost more than a quar­ter of their value af­ter the Aus­tralian Pru­den­tial Reg­u­la­tion Au­thor­ity (APRA) moved to dis­qual­ify the wealth man­ager’s top brass and im­pose new li­cence con­di­tions.

IOOF shares were down 28 per cent af­ter half an hour of trade af­ter APRA said it had be­gun pro­ceed­ings to dis­qual­ify five IOOF em­ploy­ees — in­clud­ing its man­ag­ing di­rec­tor, chair­man and chief fi­nan­cial of­fi­cer — from be­ing pen­sion fund trustees for fail­ing to act in their mem­bers’ in­ter­ests.

APRA said it has had con­cerns about con­flicts of in­ter­est at IOOF since 2015, adding the firm had failed to ad­dress the is­sues for years.

“APRA’s ef­forts to re­solve its con­cerns with IOOF have been frus­trated by a dis­ap­point­ing level of ac­cep­tance and re­spon­sive­ness,” APRA deputy chair He­len Rowell said in a state­ment.

APRA is also seek­ing to im­pose ad­di­tional con­di­tions on the firm.

The move could threaten to de­rail IOOF’s $975 mil­lion pur­chase of ANZ’s fi­nan­cial plan­ning busi­nesses.

IOOF in Oc­to­ber 2017 agreed to buy ANZ’s Aus­tralian OnePath Life busi­ness and some fi­nan­cial plan­ning op­er­a­tions for $975 mil­lion, but ANZ said yesterday it was ur­gently seek­ing clar­i­fi­ca­tion over APRA’s in­ter­ven­tion.

“Given the sig­nif­i­cance of APRA’s ac­tion, we will as­sess the var­i­ous op­tions avail­able to us while we seek ur­gent in­for­ma­tion from both IOOF and APRA,” ANZ deputy chief ex­ec­u­tive Alexis Ge­orge said.

IOOF said that mat­ters con­cern­ing the li­cence con­di­tions largely cov­ered ini­tia­tives that were al­ready in progress, or had been com­pleted, in con­sul­ta­tion with APRA.

“IOOF be­lieves that these al­le­ga­tions are mis­con­ceived, and it and its ex­ec­u­tives in­tend to vig­or­ously de­fend the pro- ceed­ings,” the com­pany said in a re­lease.

IOOF is al­ready in the midst of a re­struc­ture brought on by reg­u­la­tory pres­sure and scru­tiny of its busi­ness model dur­ing the fi­nan­cial ser­vices royal com­mis­sion.

The com­pany must re­spond to APRA’s show cause no­tice within 14 days.

IOOF shares yesterday dropped more than 35 per cent from their pre-open price of $7.17 to close at $4.60. They were among the day’s top 10 shares traded by vol­ume.

They were at an all-time high of $11.84 in Oc­to­ber 2017.

“APRA’s ef­forts to re­solve its con­cerns with IOOF have been frus­trated by a dis­ap­point­ing level of ac­cep­tance and re­spon­sive­ness.” APRA DEPUTY CHAIR HE­LEN ROWELL AAP

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.