IOOF shares in freefall as APRA looks to ban five senior executives

IOOF shares in freefall as APRA looks to ban five senior executives

The prudential regulator has begun legal action to disqualify five senior IOOF employees from running a superannuation fund for failing to act in their members' interest, as ANZ flagged it would now reconsider its sale of its OnePath Pensions business to the wealth manager.

APRA on Friday also revealed it was seeking to impose additional licence conditions on IOOF Holdings (ASX: IFL) and has given the company 14 days to prove that its compliance, governance structures and organisational structures met legal requirements.

APRA began proceedings in the Federal Court to disqualify IOOF chief executive Chris Kelaher, chairman George Venardos, CFO David Coulter, GM legal, risk and compliance and company secretary Paul Vine, and general counsel Gary Riordan.

The prudential regulator says it has had serious concerns about IOOF's conduct since 2015 and that the company has failed to address those concerns.

"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.

"The actions we are now taking are aimed at achieving enduring change to ensure that the trustees of the superannuation funds operated by IOOF fully meet their obligation to put the interests of members ahead of all other interests," Rowell says.

"Furthermore, the individuals included in the proceedings have shown a lack of understanding of their personal and trustee obligations under the SIS Act and at law, and a lack of contrition in relation to the breaches of the SIS Act identified by APRA."

IOOF Holdings responded the legal moves to disqualify its senior executives and impose new licence conditions as "misconceived" and that its executives would "vigorously" defend the proceedings.

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.

Following the announcement of the APRA legal proceedings against its senior executives, ANZ said it was considering cancelling a deal to sell its OnePath Pensions and Investments business to IOOF which was agreed in October 2017.

"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 CEO Alexis George says.

IOOF shares were slammed on the raft of bad news and at around 11.30am (AEST) they had plunged 30 percent to $5.02. Its shares were trading at an all-time high of $11.84 in October 2017.

Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.

Business News Australia

Get our daily business news

Sign up to our free email news updates.

 
Unpacking equity: Finding your funding fit
Partner Content
Armed with a growing business and a great opportunity, a business owner’s next challe...
Australian Business Growth Fund
Advertisement

Related Stories

Car pricing platform AutoGrab accelerates global ambitions through JATO partnership

Car pricing platform AutoGrab accelerates global ambitions through JATO partnership

After rapidly growing its business in Australia over the past four ...

Genesis Capital lifts Pacific Smiles takeover bid to $279 million

Genesis Capital lifts Pacific Smiles takeover bid to $279 million

Pacific Smiles (ASX: PSQ) suitor Genesis Capital has brus...

Marmalade raises $16m as invoice payment startup aims to process $1b in 2024

Marmalade raises $16m as invoice payment startup aims to process $1b in 2024

Melbourne-based invoice payment platform Marmalade has raised $16 m...

Boral rejects Seven Group bid after independent expert says it falls $1 billion short

Boral rejects Seven Group bid after independent expert says it falls $1 billion short

Buildings materials giant Boral (ASX: BLD) has formally rejected a ...