AMP crisis deepens as chairman quits following CEO departure
The crisis engulfing Australian wealth manager AMP Ltd. deepened, with Catherine Brenner resigning as chairman after the company admitted misleading the regulator, which may lead to criminal charges.
Brenner will be replaced by Mike Wilkins, the former head of Insurance Australia Group Ltd., who is also acting chief executive officer following the departure of Craig Meller 10 days ago. General counsel Brian Salter will also leave and forfeit his outstanding deferred pay, the Sydney-based company said in a statement Monday.
The 169-year-old company is struggling to contain the fallout after admitting to an inquiry into misconduct in the financial industry that it repeatedly mislead the regulator over charging customers fees for services they didn’t receive. It’s also under fire for changes made to a report by lawyers Clayton Utz which was then presented to the regulator as independent.
AMP shares fell for an 11th day in Sydney trading, the longest losing streak since the company listed almost 20 years ago. The 17 per cent slide has wiped about A$2.35 billion (US$1.8 billion) from the company’s market value.
“Appropriate steps are being taken to address the issues raised, and remediating our customers is being given utmost priority,” Wilkins said in the statement. “I reiterate our sincerest apology to our customers, and know we have significant work to do to rebuild their trust.”
Directors fees will be cut 25 per cent for the remainder of the year, and the pay and job status of people within the business responsible for the fees-for-no-service will be decided after an external review, the company said.
The board, including Brenner, were “unaware of and disappointed” about the number of drafts of the Clayton Utz report and Salter’s interaction with the outside lawyers, the statement said. The company will give a full response to matters raised at the inquiry by Friday.
AMP could be guilty of breaching the Corporations Act over its treatment of customers, the inquiry was told Friday. The maximum penalty is a A$1 million (US$757,000) fine per breach.