Australia's AMP says chairman resigns, funds unit CEO demoted

SYDNEY (Reuters) – Australian financial services group AMP Ltd (AMP.AX) on Monday said its chairman had resigned and the chief executive of its funds management unit will be demoted, following shareholder concerns about alleged inappropriate conduct by the latter.

AMP’s board, chaired by David Murray, appointed Boe Pahari to head its AMP Capital in June, despite an internal investigation regarding comments made by Pahari to a female colleague in 2017 that found he had breached the company’s code of conduct.

“The Board has made it clear that it has always treated the complaint against Mr Pahari seriously,” Murray said in a statement filed with the stock exchange.

“My view remains that it was dealt with appropriately in 2017 and Mr Pahari was penalised accordingly. However, it is clear to me that, although there is considerable support for our strategy, some shareholders did not consider Mr Pahari’s promotion to AMP Capital CEO to be appropriate.”

Debra Hazelton, a non-executive director, will replace Murray, who joined AMP in a major overhaul of the company in 2018 after it was accused of charging fees for no service and attempting to deceive regulators at a sector inquiry into misconduct.

Pahari will step down as chief executive of AMP Capital and resume work at his previous level with a focus on the unit’s infrastructure equity business, the company said.

Reuters was unable to contact Pahari on Monday, but last month he said via an AMP spokesman: “I genuinely regret that my comments made a colleague feel uncomfortable. It was never my intention, but I accept that they had an impact and I apologised and accepted the consequences.”

(This story has been corrected to remove extraneous word from paragraph 1)

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