Chris Kelaher exits IOOF in wake of APRA action

Embattled super funds manager IOOF has announced the exit of managing director Chris Kelaher, effective immediately.

Managing Director of IOOF Holdings Chris Kelaher leaving the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry last year. Picture: AAP

Embattled super funds manager IOOF has announced the exit of managing director Chris Kelaher, effective immediately.

Both Mr Kelaher and IOOF chair George Venardos stepped aside in December following legal action by regulator the Australian Prudential Regulation Authority to force them out of the industry, following appearances at the Hayne royal commission.

IOOF announced on Thursday it had reached mutual agreement with Mr Kelaher to leave the company. He would continue his leave until July 2, when his employment will cease, the company said in a statement.

Mr Kelaher said he would receive a final payment of $1.27 million, as well as accrued leave entitlements.

Meanwhile the role of chairman will be taken by Allan Griffiths, who has been acting in the position since Mr Vernados took leave. Acting managing director Renato Mota will continue in his role as the company finds a permanent replacement.

In December APRA told the Federal Court that Mr Kelaher, chairman George Venardos, CFO David Coulter, company secretary Andrew Vine and general counsel Gary Riordan were not fit and proper people to run a superannuation company.

Mr Kelaher joined IOOF in 2009, when it took over his Australian Wealth Management empire, and through an aggressive series of acquisitions grew the company from away from its roots as a sleepy friendly society into to a mid-tier financial services group.

However, his tenure has been marked by controversy.

In 2015, IOOF shares plunged after a bombshell Fairfax Media report alleged insider trading, misreporting of fund performance and cheating on compliance exams.

The Australian Securities and Investments Commission investigated following parliamentary hearings into the allegations, but even though the watchdog “identified a number of concerns relating to IOOF’s compliance arrangements, breach reporting, management of conflicts of interest, staff trading policy, disclosure, whistleblower management and protection and cyber security” it took no action against the company.

Mr Kelaher returned to the spotlight at last year’s banking royal commission, giving evidence in August that defended IOOF’s practice of using customer money to compensate them for the company’s mistakes.

His stint in the witness stand also revealed APRA’s long-running unhappiness with IOOF, including allegations he and the company misled the regulator, and showed the company relied on hand-scribbled notes to minute its board meetings.

Based on his evidence, APRA said in submissions to the commission that Mr Kelaher did not understand superannuation law.

IOOF shares plunged again in December, when the regulator, stung by criticism from royal commissioner Kenneth Hayne over its failure to take legal action over wrongdoing in the super sector, applied to the Federal Court to have Mr Kelaher, chairman George Venardos and other IOOF executives disqualified from the industry.

The company dismissed the lawsuit as “misconceived” but it stirred anger in shareholders who had stuck with Mr Kelaher through his previous travails, with biggest owner Martin Currie demanding the board and management be turned over.