HOME CAP­I­TAL: Kevin Smith re­signs as chair of trou­bled mort­gage lender but will re­main on the board

The Hamilton Spectator - - FRONT PAGE -

TORONTO — Kevin Smith has re­signed as chair of trou­bled al­ter­na­tive mort­gage lender Home Cap­i­tal.

Home Cap­i­tal is a Toronto-based lender un­der in­ves­ti­ga­tion by the On­tario Se­cu­ri­ties Com­mis­sion, which al­leges that the com­pany, two for­mer CEOs and the cur­rent CFO broke the law in their han­dling of a scan­dal in­volv­ing fal­si­fied loan ap­pli­ca­tions.

Smith, who is the CEO of St. Joseph’s Health Sys­tem in the Hamil­ton and the Ni­a­gara ar­eas, was also on the board of the Health­care of On­tario Pen­sion Plan (HOOPP) un­til re­cently.

On April 27, Home Cap­i­tal an­nounced HOOPP had agreed to pro­vide the com­pany a $2-bil­lion loan and, at that time, Smith ad­vised HOOPP he was step­ping down from its board due to that po­ten­tial conflict. He has since re­signed as chair of Home Cap­i­tal, but re­mains on the com­pany’s board. The an­nounce­ment about his res­ig­na­tion was made Mon­day.

Smith said that the de­mands of his jobs had been “very man­age­able,” un­til re­cently.

“In the past few weeks, Home has been more de­mand­ing but it was im­por­tant that I be part of the so­lu­tion and I worked hard to bal­ance my re­spon­si­bil­i­ties,” he said in an email to The Cana­dian Press. “How­ever, given the changes at Home, the chair will be re­quired to ded­i­cate ad­di­tional time and at­ten­tion. As such, I’ve asked the board to per­mit me to step out of the chair and they have gen­er­ously ac­cepted my re­quest.”

On­tario Premier Kath­leen Wynne says she ex­pects any pro­vin­cial ap­pointee or em­ployee in­volved with Home Cap­i­tal to step down if they have a conflict of in­ter­est. Wynne was asked about Smith.

The Pro­gres­sive Con­ser­va­tives have questioned whether re­la­tion­ships be­tween the boards of Home Cap­i­tal, HOOPP, and the pro­vin­cial gov­ern­ment and its agen­cies are in­ap­pro­pri­ate.

They’ve also questioned whether Smith is able to do his job of over­see­ing a ma­jor health-care sys­tem in On­tario — for which he was com­pen­sated more than $720,000 last year — while also be­ing on Home Cap­i­tal’s board. Wynne says that she can only as­sume Smith is do­ing his health-care job.

Wynne was also asked about Alan Hibben, a pro­vin­cial ap­pointee to the On­tario Pub­lic Ser­vice Em­ploy­ees’ Union Pen­sion Plan Board of Trust, who was ap­pointed to the board of Home Cap­i­tal on Fri­day. She says it’s ap­pro­pri­ate that he is con­sult­ing the prov­ince’s Conflict of In­ter­est Com­mis­sioner about the ap­point­ment.

Brenda Eprile is the new chair of the Home Cap­i­tal board.

Shares of Home Cap­i­tal swung around wildly Mon­day af­ter the com­pany sus­pended its div­i­dend and said it suf­fered from a fur­ther out­flow of money from its high-in­ter­est sav­ings ac­counts and GICs.


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