AMP walloped by cover-up scandal

AMP managed to strike chief executive Craig Meller’s name from a supposedly independent report examining who had knowledge of a scandal that affected thousands of customers.

And the wealth management titan misled Australia’s corporate regulator 20 times about the efforts it made to address the problem, the financial services royal commission has heard.

Shares in AMP tumbled yesterday as the group again came under intense scrutiny at the commission, falling 4.4 per cent in a rout that stripped $600 million from its market value.

It was revealed AMP only on Sunday handed the 109 documents to the royal commission showing the full extent of how much it was intervening in an “independent” review of a financial scandal buffeting the group.

That review was being done by law firm Clayton Utz. It covered a scandal where AMP had been charging customers for services they never received since at least 2009.

AMP presented Clayton Utz’s report to the corporate regulator as an example of “independent” work undertaken to get on top of a scandal, the commission heard.

The regulator, the Austra- lian Securities and Investments Commission, last year revealed AMP had paid or was offering compensation of $4.7 million to customers who were charged “fees for no service”.

Counsel assisting the royal commission Michael Hodge, QC, yesterday showed corre- spondence illustrating that AMP general counsel Brian Salter also sought to play down in the report any references to former head of financial advice Rob Caprioli.

Documents presented by the commission show AMP had 25 drafts of the supposedly independent report.

It was also shown that when AMP finally decided to remediate customers, it misled those customers. The company told customers they had been overcharged due to an “administrative error” when, in fact, AMP had made a decision to keep collecting the fees.

In a day of bombshells, it was also revealed AMP misled the corporate cop 20 times about the efforts it made to end the practice.

AMP group executive for advice Anthony Jack Regan said his understanding was that Mr Meller’s name was removed from the Clayton Utz report as he was not “central” to efforts to deal with the issue.

If Mr Meller were found to have known of the practice, it would be reported directly to the board, Mr Regan said.

A line was later inserted into the report exonerating Mr Meller of knowledge of the practices.

Mr Regan also acknowledged that AMP’s corporate culture dealing in with the scandal was “not as robust as it should be”.

“It’s clear that there’s preferencing of shareholders there at the expense of clients, so that is concerning,” he said.

When commissioner Kenneth Hayne asked if Mr Regan rejected the description of AMP’s statements to ASIC as “fiction”, the AMP executive did not.