Ron Dewhurst, the CEO of fund manager IOOF who bought Steve Vizard’s
Toorak mansion for $6.7 million in cash when he came back from New York in
2003, doesn’t seem to be running a particularly open shop.

Michael Pascoe reported last week that Dewhurst was very sluggish
in getting back with updates about an accounting irregularities investigation. And
now we hear an interesting story of scissor censorship involving The AFR. Yes, a reliable source advises that a story about four executives being suspended was removed from all of The AFRs delivered to IOOF’s Melbourne headquarters.

Even the trade press have been
reluctant to name those suspended for fear of losing large advertising deals
with the group, which manages $25 billion thanks to its booming
Perennial funds management division. So far we only know that Jarrod Brown resigned last week
as head of IOOF’s retail funds management division, but even the ASX
wasn’t advised of this development and we still don’t know what actually went wrong.

IOOF is also a classic example of why fund managers should be included
in the lists of highest paid executives. Perennial’s chief John Murray
has been paid many millions over the years, but shareholders are not
told how much he or any other fund manager is paid because they
are not defined as “executives” under Australian law – the same rule
which stops the likes of Alan Jones and Ray Martin appearing in the
highest paid lists.

Asked why Murray’s package was not disclosed, Dewhurst also used the
second excuse that IOOF doesn’t have a
“controlling interest” in all the Perennial funds, even though he
admitted at the last AGM that Perennial represents about half the
value of IOOF, so clearly it is absolutely material to the business.

Maybe it’s time the financial services company woke up to
the fact that it is no longer a sleepy mutual and embraced the notion of
full and open disclosure.

Let’s hope IOOF don’t follow Kerry Packer’s lead and prevent Crikey
emails from arriving at the office. If anything, the scissor censorship
demonstrates how silly The AFR’s luddite approach to the
internet is.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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