Plagued AMP Faces Growing Investor Revolt After Pahari Promotion

(Bloomberg) -- AMP Ltd. will release the results of an independent inquiry into an employee complaint against recently promoted senior executive Boe Pahari, as investor pressure mounts on the scandal-plagued company to overhaul its culture.

Pahari last month took over as chief executive officer of AMP Capital, the firm’s A$190 billion ($137 billion) investment management arm. His promotion sparked an outcry at the 171-year-old wealth manager after The Australian Financial Review reported he had been financially penalized after settling a sexual harassment complaint brought by a female subordinate.

“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. The matter was reviewed before Pahari was promoted and the board was satisfied the consequences were “significant and appropriate,” it said.

The board said it had sought to protect the confidentiality of all parties involved, but now that the complainant, Julia Szlakowski, has called for further details to be released, the company is willing to release the report.

The scandal is the latest to hit AMP after it was left reeling from an inquiry into financial services misconduct that found it charged clients for services they didn’t receive, then lied to regulators about the wrongdoing. That led to a boardroom cleanout, including the departure of the former chairman Catherine Brenner and CEO Craig Meller. The shares have lost almost three-quarters of their value since 2018 when the scandals began to unfold.

Investors are calling on AMP to address the issues.

What’s emerged “gives us little confidence that the board understands and has either the capability or the will to set an appropriate corporate culture,” said Debby Blakey, CEO of A$52 billion pension fund Hesta. “These recent issues risk impacting employee engagement and hence senior leadership’s ability to deliver cultural transformation.”

“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.”

The company was further rocked earlier this month by the abrupt departure of AMP Australia CEO Alex Wade. AMP has declined to comment on reports in local media of alleged inappropriate conduct.

To ensure fair treatment, AMP has contacted Szlakowski’s legal advisers to seek her consent to have the report released. Pahari has provided his consent, the board said. The report will be redacted to remove names, initials and job titles of any party, other than Szlakowski and Pahari.

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