AMP AMP Limited

   By Robb M. Stewart 
 

MELBOURNE, Australia--Wealth-manager AMP Ltd. (AMP.AU) has pledged to fast track the selection of a new chairman as it seeks to recover from a scandal that has erupted over fees charged to customers who didn't receive any service.

Catherine Brenner resigned from the board earlier this week, accepting accountability in her role as chairman for governance failings at the Australian firm. That came a little over a week after Chief Executive Craig Meller agreed to bring forward his retirement, stepping down with immediate effect.

The full board of AMP has elected to take a 25% cut in directors' fees for the remainder of the year, and AMP said Friday it accepted that further board renewal was necessary, including the appointment of a new non-executive director.

The last round of public hearings in an ongoing judicial probe of misconduct in Australia's financial industry focused on fees for no service at AMP as a case study.

In a fresh submission to the royal-commission inquiry on Friday, AMP said that the issues raised weren't new and had been disclosed to the securities regulator in October 2017 and in evidence to the commission in March. To date, it said 15,712 customers had been refunded a total of 4.7 million Australian dollars (US$3.5 million), but conceded the process had been too slow.

AMP also said it had acknowledged communications with the Australian Securities and Investments Commission by its advice business had been misleading. It said that any misrepresentation, even inadvertent, was unacceptable, but added the seven instances of misrepresentations weren't "new news."

The company also said it strenuously denied allegations made by counsel assisting the royal-commission probe that AMP had committed a criminal offense. It said the issues raised in the case study concerned matters almost entirely the subject of an ongoing ASIC investigation that had begun in 2015.

The issues related to fees charged by AMP's advisers without providing a service, as well as fees charges by licensees without providing a service.

Worries over the royal-commission's study of the matter, and what the probe will ultimately recommend to the government, have hit AMP's shares hard. The stock slumped 19% in April, though had started to recover the early part of this week.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

May 03, 2018 21:52 ET (01:52 GMT)

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