Australia

AMP CEO quits after shocking revelations at the banking royal commission

0:00

AMP chief executive Craig Meller has resigned and the financial services provider has apologised "unreservedly" for the scandals heard at the royal commission.

AMP chief executive Craig Meller has quit the wealth management giant, becoming the first major casualty of the financial services royal commission.

Mr Meller says he is "personally devastated" after AMP admitted to charging clients for advice they never received and then lying to the corporate watchdog about it.

This is a file image of AMP Chief Executive Officer Craig Meller.
AMP CEO Craig Meller has resigned amid scandals uncovered at the royal commission into banking. (AAP)
AAP

Mr Meller, who had been set to retire at the end of the year, insisted he did not know about the behaviour but acknowledged that he was ultimately responsible.

"I do not condone them or the misleading statements made to ASIC," Mr Meller said in a statement on Friday.

"However, as they occurred during my tenure as CEO, I believe that stepping down as CEO is an appropriate measure to begin the work that needs to be done to restore public and regulatory trust in AMP."

Former IAG chief executive Mike Wilkins, who joined AMP's board in 2016, will replace Mr Meller on an interim basis.

   

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.

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

AMP group executive for advice Jack Regan admitted that one 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.

On Tuesday, detailed questioning revealed AMP had sought to influence an "independent" report from the law firm Clayton Utz to the financial regulator ASIC about the fees. 

Commissioner Hayne suggested AMP may wish to explain itself.

"There may be some question about what conclusions, if any, I may reach about the extent to which senior management or others associated with AMP sought to influence or did influence content of the report by Clayton Utz," the commissioner warned.

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

Finance minister Mathias Cormann said the resignation was an "obvious consequence" of the commission's work.

The Turnbull government spent years resisting calls from Labor and the Greens to hold a Royal Commission into the banks, but finally called one late year after Nationals backbenchers threatened to side with the opposition.

"Obviously some of the news that has emerged in the Royal Commission is very concerning indeed and this is obviously one of the consequences out of that process," Senator Cormann told Sky News on Friday.

Federal Treasurer Scott Morrison speaks to the media.
File image of Treasurer Scott Morrison (AAP)
AAP

Treasurer Scott Morrison says the sudden resignation was "unsurprising" given shocking revelations about the financial giant uncovered by a royal commission. 

"But let's not forget, it's not just chief executives here," Mr Morrison told reporters in Melbourne on Friday.

"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.

"At the end of the day, the boards of these organisations are the custodians, really, of the governance, and I am sure that that will have plenty of attention, as the commission carries on its important work."

Govt announces new ASIC powers, tougher penalties 

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

There will also be longer prison sentences for serious corporate crimes, up to 10 years in prison for the worst offences. 

The government insisted the changes were a response to a report from last year that pre-dated the Royal Commission.

Stay up to date with SBS NEWS

  • App
  • Subscribe
  • Follow
  • Listen
  • Watch