For embattled wealth giant AMP, 2020 has been a difficult year. It was back in February that the firm was slapped with an AU$5 million fine over insurance churning, while in July it was hit with two lawsuits in one week – the latter relating to advice it provided for insurance products. Now, the firm, which offers a range of insurance products, is battling negative headlines once more.
This time it is facing pressure over the results of an independent inquiry surrounding recently promoted senior executive Boe Pahari.
The executive, who last month took the role of chief executive officer of AMP Capital, was the subject of a report in The Australian Financial Review, suggesting he had been financially penalised on the back of settling a sexual harassment complaint brought about by a female worker.
“AMP has always acknowledged the seriousness of the 2017 employment complaint made against AMP Capital CEO Boe Pahari,” the board said in a statement Wednesday.
According to the firm, the matter was reviewed ahead of Pahari’s promotion with AMP satisfied the consequences were “significant and appropriate.” However, complainant Julia Szlakowski called for further details to be released.
In a Bloomberg article, it was highlighted that this scandal is just the latest to hit AMP after an inquiry into financial services misconduct, which prompted a boardroom clearout. Shares have lost almost three quarters of their value since the scandals originally broke out back in 2018.
“You can’t attract and retain good people if you preside over a misdirected culture. You just won’t,” said Simon Mawhinney, chief investment officer of Allan Gray, AMP’s second-largest shareholder with a 6.6% stake, according to data compiled by Bloomberg. “It’s death by a thousand cuts, many of them very deep.”
In an editorial in the Sydney Morning Herald it was suggested that “Pahari should go if AMP is to regain trust. It was rocked earlier this month when AMP Australia CEO Alex Wade departed – with the company declining to comment on allegations of alleged inappropriate conduct.
