Boss of Australia's Biggest Wealth Management Firm Quits Amid Scandal

Darnell Taylor
April 20, 2018

AMP executives admitted in testimony this week that the company had lied to the corporate watchdog for nearly a decade to cover a practice of charging customers for services it did not provide.

The Financial Sector Union of Australia (FSU) supported Meller's move, saying "he made the correct decision to resign following the reprehensible behaviour within AMP revealed to the Royal Commission".

Craig Meller said: "I am honoured to have been the CEO of AMP".

AMP shares have been in freefall since the company began giving testimony to the royal commission on Monday, wiping about $1.3 billion off its market capitalisation.

Meller said he was "personally devastated by the issues which have been raised publicly this week", and while he did not condone making misleading statements to the regulator they had occurred under his watch so his resignation was appropriate.

The wealth management giant faces possible criminal charges after the commission heard it deliberately and unlawfully continued charging fees to "orphan" clients for three months despite them not receiving advice services.

Meller isn't the only executive taking a bullet for the "independent report" which AMP had commissioned law firm Clayton Utz to provide.

Commissioner Hayne suggested AMP may wish to explain itself.

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AMP on Friday said it would make a further submission to the royal commission over the issues raised.

At the same time, the government flagged increased penalties and longer prison terms for financial crimes in a bid to strengthen the enforcement powers of the corporate regulator following shocking revelations to the Royal Commission this week.

Finance Minister Mathias Cormann told Sky News television on Friday that revelations about AMP from the inquiry were "very concerning" and Meller's sudden departure "is obviously one of the consequences".

Treasurer Scott Morrison, who once dismissed opposition calls for a Royal Commission as "crass populism", on Friday said the government would raise criminal penalties for corporate crimes to a maximum of 10 years in jail, from 5 years now.

Mike Wilkins, a non-executive director of the company, has been appointed acting chief executive while Meller's replacement is found, the company said in a statement.

"Boards, at the end of the day, are responsible for these organisations, and there will be a lot of focus on executives, where executives haven't been able to deliver here".

The government on Friday announced new powers for ASIC, including phone-tapping powers and the ability to blacklist individual financial brokers.

The commission heard that AMP went through 25 drafts and exchanged more than 700 emails with Clayton Utz before the report was submitted by the board to the Australian Securities and Investments Commission as an "independent report".

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