In closing submissions to the Federal Court, lawyers for IOOF have labelled APRA as clueless and its case against IOOF as not fit for court.
APRA’s case against IOOF claimed that its directors, executives and entities failed to act in the best interest of superannuation members.
The regulator was seeking to have five IOOF directors and executives disqualified for failing to act in best interests, including former managing director Chris Kelaher.
In closing statements made last Friday, Mr Kelaher’s lawyer, Robert Newlinds SC, said the regulator's case was based on “legal fallacies” and was a regulatory overreach.
“While such a facile statement has a superficial attraction and makes for good headlines, it has no place in a court of law,” said Mr Newlinds.
APRA’s case against IOOF is centred on apparent misappropriation of the members’ reserve fund, claiming that IOOF attempted to fix an error by using millions of dollars from the fund’s reserve, rather than penalising the investment business for the error.
Mr Newlinds argued that the usage of the fund was for the very purpose that it was established for and accused the regulator of overreach.
"APRA’s case represents regulatory overreach of the most egregious kind. The very bringing of this case has trashed Mr Kelaher’s reputation in a very public manner and yet, upon proper analysis, the case proves no more than that APRA misunderstands the very legislation that it administers," said Mr Newlinds.
IOOF’s closing submissions were delivered yesterday where it said APRA was clueless and had an empty observance of rituals.
"Notwithstanding the zeal with which APRA has interrogated IOOF’s business, it has identified four relatively minor issues occurring in a period of more than 10 years," said lawyers for IOOF entities IIML and Questor.
APRA had claimed that IIML and Questor enacted member compensation plans that breached super laws, alleging that members were compensation for mistakes made by IOOF and third parties using money from operation and general reserve.
IIML and Questor’s lawyers denied the breach and said that even if the breach could be proved, there was no obligation for the entities to pay compensation to members.
"It follows that the payment of compensation, or the replenishment of the reserve, by IIML and Questor from their own funds was a voluntary act for the benefit of members, going well beyond the companies’ legal obligations," the lawyers said.
Lawyers for former chairman George Venardos also pushed back against APRAs case to have him disqualified arguing that other non-executive directors were not facing the same legal action.
"Nothing that Mr Venardos did or did not do in relation to the matters [which are] the subject of the proceedings was any different to the conduct of those other non-executive directors," said Mr Venardos' lawyer Tony Bannon SC.
The hearing is still ongoing.
Eliot Hastie is a journalist at Momentum Media, writing primarily for its wealth and financial services platforms.
Eliot joined the team in 2018 having previously written on Real Estate Business with Momentum Media as well.
Eliot graduated from the University of Westminster, UK with a Bachelor of Arts (Journalism).
You can email him on: [email protected]
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