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