AMP is reeling from an investor backlash, with class actions and a massive protest vote at its annual general meeting.
The financial services giant has been hit with two law suits with its market value nose-diving following the scandals revealed at the financial services royal commission.
Law firm Quinn Emanuel Urquhart & Sullivan yesterday filed class action proceedings in the Supreme Court of NSW on behalf of affected shareholders who acquired equity in AMP between 10 May 2012 and 15 April 2018.
The law suit alleges shareholders made significant losses after AMP breached its continuous disclosure obligations and made misleading statements.
A second claim has been filed by Phi Finney McDonald in the Federal Court of Australia in Victoria on behalf of shareholders who acquired AMP shares between 6 May 2013 and 13 April 2018.
AMP shares have fallen to a six-year low following its testimony at the royal commission wiping more than $2 billion off its market value after it admitted it charged customers fees for financial advice that was never delivered and repeatedly lied to the Australian Securities and Investments Commission about its behaviour.
Chairman Catherine Brenner resigned last week, following chief executive Craig Meller.
And two of the three directors up for re-election at the 169 year old firm’s annual general meeting stepped down ahead of a likely vote led by the Australian Shareholders Association against their reinstatement.
In its statement to the market, AMP said it would vigorously defend the proceedings.
At yesterday’s AGM, AMP received the largest protest vote for a company in Australian corporate history with 61 per cent of votes directed against the adoption of the company’s remuneration report. A second strike of more than 25 per cent voting against the remuneration report at next year’s AGM would trigger an automatic spill of all boardroom positions.
The protest vote is a clear sign of the anger of AMP investors feeling betrayed by the company.
AMP yesterday apologised to investors at the AGM.
“We let you down, we have let our customers down and we have let the wider community down,” the company’s interim executive chairman Mike Wilkins said.
“We have heard loud and clear that you [shareholders] require change.
“The board has accepted accountability, to date some 50 per cent of the board has left or is leaving.
“The scale of these changes reflects the gravity of the issue.”