IOOF Plunges Most Since 2008 After Media Report of MisconductNarayanan Somasundaram
Australian fund manager IOOF Holdings Ltd. fell the most in almost seven years after a media report of alleged misconduct by employees.
The shares declined 13 percent, the most since October 2008, to A$9.24 in Sydney following the report in the Australian Financial Review on Monday. The Melbourne-based firm, which oversaw about A$154 billion ($120 billion) of funds as at March 31, said in a statement the issues raised had been dealt with appropriately and wouldn’t result in a loss to clients.
“Most of the claims appear to have been promoted by a former employee who is in a legal dispute with the company and are historic in nature,” IOOF said in a statement to the stock exchange. The issues were dealt with through internal and board review, and where relevant regulators were notified, the company said.
The allegations of wrongdoing come at a time when the nation’s banking industry is the subject of a parliamentary inquiry into the quality of financial services. Firms including Commonwealth Bank of Australia and Macquarie Group Ltd. are compensating wealth management customers after giving poor advice.
IOOF’s shares fell as much as 21 percent during the day, the most since listing in December 2003.
IOOF investigated alleged misconduct including insider trading and in most instances dealt with the matter in-house, the AFR reported, citing internal documents and whistle-blower testimony.
Andre Khoury, a Sydney-based spokesman for the Australian Securities & Investments Commission declined to comment on the report.
“To the best of our knowledge and based on reasonable enquiries, none of the issues raised in the article will cause any loss to any IOOF client, past or present,” the company, which has more than 650,000 customers, said in the statement.
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