After IOOF did not respond and blew the deadline, APRA next day filed the court action – wiping $900 million off IOOF’s market capitalisation in a single day.
Chief executive Chris Kelaher and chairman George Venardos are now on leave while defending the court case and there are a number of class-action law firms circling the wealth giant.
APRA also says the orders it is seeking, namely to disqualify Mr Kelaher and the others from acting as responsible persons of superannuation trustees for breaching superannuation laws, must be made through the court system.
However, documents filed by IOOF and its senior leaders tell a different story. IOOF’s chairman, executives and directors claim APRA never raised the prospect of taking them to court before the shock court filing.
Mr Kelaher, former managing director, alleges that before the legal proceedings there was no discussion between APRA and him about a court enforceable undertaking, while former chairman George Venardos says at no time did APRA raise issues with him insofar as they related to him acting in a personal capacity.
The three executives targeted by the APRA action – chief financial officer David Coulter, company secretary Paul Vine and general counsel Gary Riordan – say the first time they found out about APRA’s intention was when it sent them a copy of a media release, a concise statement and the originating process hours at 5.51pm on December 6 — hours after the midday deadline.
The disqualification case will be heard over three weeks in July in the Federal Court. Mr Kelaher, Mr Venardos and Mr Coulter have all elected to employ representation separate to the company, which has engaged King Wood and Mallesons.
APRA took a beating in the Hayne royal commission for not taking trustees to court when they breached superannuation laws. In the royal commission hearing, Mr Kelaher gave evidence that APRA’s concerns about its dual regulated entity structure was a “matter of indifference”, which appears to have prompted APRA to act.
Shares in IOOF tumbled in the aftermath of the hearings and the court action and are still down more than 42 per cent from a 52 week high of $11.04 to yesterday’s close of $6.36.