Investors call for AMP Capital CEO's head

Under-siege Australian finance company criticised for its handling of serious sexual harassment allegations.

| More on:
Crowd of angry investors protesting with bullhorn and placards

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The AMP Limited (ASX: AMP) share price dipped 4.17 % on Monday as questions arose over its defence of a top executive accused of serious sexual harassment.

Boe Pahari faced the allegations from a female subordinate in 2017. But he was promoted to the position of AMP Capital chief executive officer after the company found his offence was "low level".

AMP had also defended the promotion, saying a financial penalty was sufficient and that Pahari had expressed remorse.

But Nine this week published explosive details of the allegations against Pahari, which seemed to contradict the company's insistence that the harassment was on the lower end of the scale.

The details of the allegations included Pahari sending the employee on an unnecessary trip to London, saying she made him look like a "limp dick" when she refused his offer to buy her clothing, extending the hotel stay against her wishes and requesting they message each other on Whatsapp to avoid detection.

The $500,000 fine imposed on Pahari was reportedly the same amount AMP settled for with the employee, who departed the company.

Investors have called for AMP to stand down Pahari.

The Australian Council of Superannuation Investors (ACSI) is a lobby group that represents 38 asset owners and institutional investors, who collectively own 10% of every ASX200 company.

ACSI chief executive Louise Davidson told Nine that she couldn't see how Pahari's position is tenable.

"It concerns me particularly that the company has tried to downplay the seriousness of the [alleged] sexual harassment."

An AMP spokesperson told The Motley Fool that an external expert, a QC, led the investigation into the 2017 complaint.

"Many of the claims were not substantiated by the external investigation," the spokesperson said.

"Prior to Mr Pahari's appointment as AMP Capital CEO, the AMP Board and CEO reviewed the matter and the investigation findings and were satisfied the investigation was thorough and the consequences applied were both significant and appropriate."

ACSI reportedly has discussed the issue with AMP since the case first went public earlier this year.

But Davidson said the response from the company has been inadequate.

"It's not clear to me what the next steps are aside from just sitting tight and hoping it goes away."

And it seems many other investors feel the same way, selling off AMP's shares en masse on Monday. The AMP share price closed at $1.50 yesterday, falling from $5.43 in March 2018. It has continued to slide today, falling another 1.54% to $1.47 at the time of writing.

Pahari's behaviour wasn't the only harassment scandal the finance giant has dealt with in recent times. 

AMP Australia chief executive Alex Wade resigned earlier this month after serving less than a year in the position. He faced accusations he sent photos of a sexual nature.

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on ⏸️ ASX Shares

a woman wearing a close-sitting hat featuring wires and thick computer screen glasses clutches her computer monitor and looks shocked and disturbed as she reads old-fashioned computer text from the screen.
Technology Shares

Here's why ASX 200 tech shares (ASX:XTX) outperformed today

ASX tech shares have taken a turn for the better today.

Read more »

Worker in hard hat looks puzzled with one hand on chin
Resources Shares

Why did the Rio Tinto share price (ASX:RIO) have such a lousy 2021?

We look at what happened to this ASX 200 mining giant's shares last year

Read more »

a miner wearing a hard hat smiles as he stands in front of heavy earth moving equipment on a barren mine site.
Share Gainers

Here's why the Rumble Resources (ASX:RTR) share price is climbing 5%

The mineral explorer's share price is on the rise amid promising drill results.

Read more »

share price high, all time record, record share price, highest, price rise, increase, up,
⏸️ ASX Shares

Here are the top 10 ASX 200 shares on Wednesday

Here are your top 10 biggest gainers in the ASX 200 on Wednesday.

Read more »

comical investor reading documents and surrounded by calculators
⏸️ ASX Shares

The ASX reporting wrap-up: WiseTech, Bravura, Seven Group

Just what the investor ordered. Here’s a recap of the companies that reported on Wednesday...

Read more »

Doctor performing an ultrasound on pregnant woman
⏸️ ASX Shares

The ASX reporting wrap-up: Ansell, Kogan, Nanosonics

Just what the investor ordered. Here’s a recap of the companies that reported on Tuesday...

Read more »

blue arrows representing a rising share price ASX 200
⏸️ ASX Shares

Here are the top 10 ASX 200 shares on Tuesday

Here are your top 10 biggest gainers in the ASX 200 on Tuesday.

Read more »

unhappy investor considering computer screen
Share Market News

The ASX reporting wrap-up: Charter Hall, Ampol, NIB Holdings

Just what the investor ordered. Here’s a recap of the companies that reported on Monday...

Read more »