IOOF brass targeted
Regulator had concerns about conflict of interest since 2015
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