AMP chairwoman, legal counsel exit in wake of misconduct scandal

The logo of AMP Ltd, Australia’s biggest retail wealth manager, adorns their head office located in central Sydney, Australia.(Reuters pic)

SYDNEY: AMP Ltd announced the resignations of its chairwoman and legal counsel, and slashed its directors’ fees by a quarter, as Australia’s largest listed-wealth manager tries to stem the fallout from damaging revelations of misconduct.

The exits come just a week after the departure of CEO Craig Meller in the wake of disclosures at a judicial inquiry into the country’s financial sector that AMP misled customers and repeatedly deceived the corporate regulator.

Chairwoman Catherine Brenner and group general counsel Brian Salter will depart immediately, AMP said in a statement.

Mike Wilkins, who has been named both interim chairman and CEO, said the evidence given to the government-backed Royal Commission is “being treated extremely seriously by the board”.

“Appropriate steps are being taken to address the issues raised, and remediating our customers is being given utmost priority,” he said on Monday.

AMP has seen around A$2.2 billion ($1.7 billion) wiped off its market capitalisation during the commission’s two-week public hearing focusing on financial advice. It was valued at A$11.6 billion at Friday’s close.

The hearing was told that advisers at AMP misappropriated funds of thousands of clients over the last decade by charging them without providing advice, and that it had repeatedly lied to the Australian Securities and Investments Commission (ASIC).

Counsel assisting the inquiry warned on Friday that AMP had breached provisions of the Corporations Act that carry criminal sanctions.

The Royal Commission is just a couple of months into what is expected to be a year-long investigation. The inquiry will be able to make wide-ranging recommendations including legislative changes and on criminal or civil prosecutions.

Wilkins said the selection of a new AMP chair would be fast tracked, along with the CEO search already underway, to “help ensure stability and further strengthen governance”.

AMP said it will reduce fees for all board directors by 25 percent for the rest of 2018 as a recognition of the “collective governance accountability for the issues raised in the Royal Commission and for their impact on the reputation of AMP.”

It also said the “employment and remuneration consequences” for individuals who were responsible for charging fraudulent fees would be determined once an external employment review was completed, which it expected shortly.

The company said it will be making a formal submission in response to the allegations raised at the Commission by May 4.