IOOF Holdings Limited (ASX: IFL), an Australian Wealth Manager, on 12th April 2019, received a class-action proceeding by shareholders of IOOF who acquired an interest in the company’s shares during 27th May 2015 and 9th August 2018. The suit was filed by law firm Quinn Emanuel in the New South Wales Supreme Court.
IOOF mentioned that the steps taken by Quinn Emanuel seem to be driven by the recent Royal Commission evidence and legal proceedings steps taken by APRA against few IOOF employees. IOOF is defending The APRA proceedings.
In response to this, IOOF said that it is not involved in any misleading or deceptive activities. The case has no foundation and is speculative.
In its announcement on 7th December 2018, IOOF confirmed that it has a received a notice from APRA regarding the impose licence conditions and Court proceedings with a show cause notice. APRA claimed that the company has breached the Superannuation Industry (Supervision) Act 1993. APRA filed a proceeding in the Federal Court of Australia and asked for declarations and disqualification orders against some company officials, including Chairman George, Venardos; Managing Director, Chris Kelaher; Chief Financial Officer, David Coulter; Company Secretary, Paul Vine; and General Counsel, Gary Riordan. Management expressed that IOOF is following the outline at AGM 2018 regarding the initiatives agreed upon with APRA.
The stock of IFL was trading at $6.465, down ~1.89% (on 03:45 PM 15 April 2019), with a market capitalisation of $2.31 billion.
APRA (Australian Prudential Regulation Authority), a regulator of the financial services industry in Australia, supervises companies engaged in the business of life insurance, general insurance, banking, credit union, etc. At present, APRA oversees the holding of ~6 trillion in assets received from investors for the industry.
In the earlier update, the company announced that Bridges Financial Services Group Pty Ltd (Bridges), subsidiary of IOOF, has stepped into a strategic partnership with Bendigo and Adelaide Bank Ltd (Bendigo). The objective of the arrangement is to advice servicing rights of Bendigo Financial Planning’s clients. Bridges will provide ongoing financial planning services to clients of Bendigo introduced to Bridges. The arrangement will see a cash consideration of $3 million by Bridges on completion with an additional payment on the completion of its first anniversary, subject to conditions. The deal is likely to be completed on 31 July 2019.
In addition to this, Bridges will also provide FP services to clients referred by Bendigo for a certain period via its branch network. With this development, ~$1 billion of funds under advice will be added to Bendigo FP.
The company on 4 April 2019, updated about the change in leadership. Mr. Allan Griffiths has been appointed as Independent Non-Executive Chairman with immediate effect. Mr. Christopher Kelaher will exit IOOF by mutual agreement.
S&P Dow Jones Indices announced its Quarterly Rebalance report for S&P/ASX 100 Indices for March 2019, in which, IOOF Holdings Limited has been removed from S&P/ASX 100 Index, effective at the open on March 18, 2019.
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