Ann: IOOF response to APRA notice and action, page-153

"But what is distinctly very material in this announcement is that key executives of the business are now being deemed to be unfit to run a business of this nature."

From my brief assessment of the situation this far, it seems that APRA have an issue with the board being the trustees for the superannuation part. That is all. As no doubt you know, being a trustee is often more about the legal paperwork being complete, rather than anything practical.

If one has multiple entities which exist for the purpose of benefiting that same individual, one often has to make decisions that might advantage one entity to the disadvantage of another, if overall the net result is that the individual benefits. In such a case, if the disadvantaged entity is a trust controlled by the said individual as the trustee, then this individual is in breech of his duty as a trustee. This situation is happening all the time, though it is not pursued by the regulatory authorities (on an individual scale they would not even be aware it is happening).

So this issue in itself may not harm future earnings and could be dealt with relatively quickly by setting up another trustee which is at arms length to the board, but still part of IFL itself.

Naturally such issues never look good plastered everywhere by the media, erode public perception (which itself could harm future earnings) and lead to the question of "What else do we not know about?".

Having considered all of the above, it appears to me that Mrs Market has over-reacted and given that I seem to not be able to say no to something on sale, I decided to dip a couple of toes in. Hopefully they don't get ripped off.