All five IOOF representatives involved are vigorously defending that allegations that went to trial last month.
Along with the Federal Court action, IOOF was hit with new licence conditions by APRA to ensure a complete separation of its executive team from the board of its superannuation trustees which under the law are supposed to be independent.
IOOF told the market on May 13 new legislation would put new requirements on the deal if it was not approved by ANZ by July 5.
“From July 5 2019, recent amendments to the Superannuation Industry (Supervision) Act will come into force, which gives APRA an approval power in respect of the acquisition of controlling stakes in Registrable Superannuation Entity licensees,” IOOF said at the time.
“Depending on the timing of the receipt of any notices of no objection from OnePath Custodians and ANZ, receipt of such an approval from APRA may also become a condition to the completion of the P&I [pensions and investments] acquisition.”
That announcement also warned that both parties have the right to tear up the deal if no agreement is reached by October 17.
Legal sources familiar with APRA’s case against IOOF said that even if the Federal Court found IOOF and its executive ranks made no breaches of the law, it would not necessarily pave the way for an APRA approval of the deal.
Banking sources said ANZ would be inclined to complete the deal if it and OnePath were satisfied that IOOF had its governance controls in order as requested by APRA. ANZ has already transferred its planning business to IOOF and completed the sale of its insurance arm to Zurich.
ANZ has had serious concerns about IOOF’s ability to act in the best interests of its superannuation members following the revelations at the royal commission and has sough assurances from the wealth manager.
The bank has been soothed by the appointment of a permanent CEO in Renato Mota, but concerns at the bank about the other executives named in the Federal Court case who remain at IOOF.
An IOOF spokesman said it remains committed to the transaction.
“We are in regular dialogue with ANZ, the OnePath Trustee as well as APRA in relation to the necessary approvals,” said the IOOF spokesman.
APRA and ANZ declined to comment.
Sarah Danckert is a business reporter.