With class actions looming, AMP’s chairwoman Catherine Brenner resigned with immediate effect on Monday saying she is “ultimately accountable” for the conduct highlighted by the banking royal commission.
Interim chief executive Mike Wilkins will become executive chairman until a new chair is found, after Ms Brenner followed CEO Craig Meller out the door following AMP’s admissions to charging clients for advice they never received and then lying to the corporate watchdog about it.
A fourth law firm – Phi Finney McDonald – said on Monday it is preparing a class action against AMP for misleading investors.
It follows law firms Shine Lawyers, Slater and Gordon and Quinn Emanuel Urquhart & Sullivan, which last week said they were each investigating class actions against AMP.
“It is all very well for AMP to say that it ‘unreservedly’ apologises to the regulator, but where does that leave investors in AMP shares who have seen billions of dollars wiped off AMP’s market capitalisation in the last two weeks?” Mr Finney said.
“ASX-listed companies need to properly compensate their investors when their misleading conduct causes them loss.”
He said the class action, which is backed by litigation funder IMF Bentham limited, will be open to all shareholders “aggrieved” by AMP’s misconduct.
The 169-year-old company has admitted it charged customers fees for financial advice that was never delivered, and repeatedly lied to ASIC about its behaviour.
Ms Brenner’s resignation came in the face of mounting pressure from the Australian Shareholders Association.
“As chairman, I am accountable for governance,” Ms Brenner said in a statement.
I have always sought to act in the best interests of the company and have been in discussions with the board about the most appropriate course of action, including my resignation.”
AMP on Monday said it had cut directors’ fees by 25 per cent for the next eight months and that group general counsel and company secretary Brian Salter would leave amid unhappiness over his involvement in a contentious report into the scandal.
AMP shares recovered early losses on Monday to be steady at $4.01 mid-afternoon.
The company has had more than $2.2 billion wiped off its market capitalisation in the last fortnight.
AMP said Ms Brenner, Mr Meller and the other directors had done nothing wrong with regard to the much-reviewed external report it commissioned from law firm Clayton Utz.
Mr Wilkins said that AMP was treating the scandal seriously and that customer remediation was the priority while it fast-tracked the search for a new chairman and director.
The former IAG chief executive did not mention the CEO position, which he has been filling on an interim basis since Mr Meller quit on April 20.
AMP group executive for advice Jack Regan admitted that a letter to ASIC claimed clients were at fault for being charged ongoing fees, when in some cases it was the result of a conscious effort by AMP.
He also admitted that he marked up changes to draft versions of the Clayton Utz document while the board also made changes before it was signed off.
AMP will be making a formal submission to the royal commission by May 4, in response to the matters raised.