AMP chairman quits as Australia banking scandal deepens

Australian finance company AMP’s chairman quit Monday barely a week after its chief executive stood down as damning evidence of misconduct by the firm continues to mount.

AMP is one of several major Australian financial services companies under scrutiny at a royal commission set up in February to investigate misconduct in the banking sector.

It has heard that AMP charged clients for advice they never received and that senior executives intervened in the drafting of a supposedly independent report drawn up for the inquiry.

AMP also admitted misleading the stock market watchdog Australian Securities and Investment Commission (ASIC) about the scandal, which affected some 15,700 clients between 2009 and 2016.

On Friday, the commission was told that AMP could face criminal charges, making chairman Catherine Brenner’s position increasingly untenable.

“As chairman, I am accountable for governance,” she said in a statement Monday ahead of the group’s annual general meeting on May 10.

“I have always sought to act in the best interests of the company and have been in discussions with the board about the most appropriate course of action, including my resignation.

“The board has now accepted my resignation as chairman as a step towards restoring the trust and confidence in AMP.”

It follows chief executive Craig Meller quitting “with immediate effect” earlier this month.

AMP also announced directors would take a 25 percent pay cut for the rest of the year.

Amid the ongoing revelations, Prime Minister Malcolm Turnbull, whose conservative government long resisted launching the royal commission, unveiled plans to toughen criminal and financial penalties for bank misconduct and to expand ASIC’s investigative powers.

These include increasing the maximum jail term for individuals convicted of serious offences from five to 10 years, and imposing fines on companies which could reach 10 percent of their annual revenue.

The country’s major banks — among the developed world’s wealthiest — have been under increasing scrutiny in recent years amid allegations of dodgy financial and life insurance advice and mortgage fraud.

There have also been claims of anti-money laundering laws being breached and benchmark interest rates rigged.