Home Capital adds fifth director
Home Capital Group Inc. made a fifth addition to its board of directors Thursday, replacing one of the embattled alternative mortgage lender’s initial investors with veteran Bay Street lawyer James Lisson.
Lisson, who was a partner and vice chair of the financial services group at Osler, Hoskin & Harcourt in Toronto, will take the spot being vacated by John Marsh, an early investor in Home Capital who has served as a director since 1986 and who owns 2.46 per cent of the company’s shares.
“Jim Lisson is yet another excellent addition to the Home Capital Board of Directors as we move ahead with our governance renewal,” said Brenda Eprile, chair of the board of Home Capital in a statement. “He brings deep expertise in areas that are vital to our future success.”
In addition to his 25 years at Osler, Hoskin & Harcourt, he also worked for two years with the federal Department of Justice as a consultant and senior adviser on commercial law, the company said.
Lisson served as the executive chairman of Canadian commercial real estate giant Cadillac Fairview Corp. in 1993 and 1994, after serving as a director for several years, including providing leadership during a significant financial restructuring.
Lisson is the fifth new director to be named to Home Capital’s board this month as it seeks to restore its reputation. Home Capital has been facing a crisis of both confidence and liquidity after a series of executive departures and allegations of misleading disclosure by the company and some of its current and former executives.
The Toronto- based company has seen a partial run on the funding it uses for mortgage lending, with deposit holders withdrawing more than 90 per cent of the balances in its subsidiary’s high interest savings accounts since the end of March.
In turn, Home Capital was forced to obtain a $2 billion rescue credit line from a syndicate of lenders as a backstop, but at onerous terms that it says will limit future profitability.
Last week, Canada’s biggest non-bank lender said the recent reputational hit had impacted its future funding abilities and cast “significant doubt on the Company’s ability to continue as a going concern.”
Meanwhile, as the com- pany seeks more cost-effective funding and mulls selling certain non-core assets to pay down the pricey credit line, it has made strides to beef up its board.
On May 5, Home Capital named former RBC Capital Markets managing director of mergers and acquisitions Alan Hibben to replace founder and former chief executive Gerald Soloway. Soloway had stepped down from the board in April after the Ontario Securities Commission filed formal allegations against him, the company, former chief executive Martin Reid and chief financial officer Robert Morton, in connection with the discovery of falsified information in its broker channel and the subsequent termination of 45 brokers in 2014 and 2015. Home Capital has said the allegations are “without merit.”
And on May 8, the company named Eprile as chair to replace Kevin Smith, who remains as a director. Home Capital also named three new Canadian business heavyweights as directors: Claude Lamoureux, former chief executive officer of the Ontario Teachers’ Pension Plan; Paul Haggis, a risk consultant and former head of the Ontario Municipal Employees Retirement System ( OMERS); and Sharon Sallow, a risk consultant, former director at Teachers and former Ontario Securities Commission staffer.
Meanwhile, Home Capital’s high- interest savings account balances saw a daily increase for the first time since March. The company’s high-interest savings account balances at subsidiary Home Trust stood at $120.2 million as of May 17, up from $116.8 million as of May 16, Home Capital said on Thursday. That’s compared to $1.991 billion before March 28.