Reuters logo
UPDATE 2-Home Capital founder to step down from board amid regulatory probe
April 24, 2017 / 12:55 PM / in 8 months

UPDATE 2-Home Capital founder to step down from board amid regulatory probe

(Adds details)

April 24 (Reuters) - Home Capital Group Inc said founder and former CEO Gerald Soloway will step down from the board once a replacement is found, days after regulators accused the company of making “materially misleading statements” to investors.

The Ontario Securities Commission (OSC) on Wednesday issued allegations against Soloway and another former Chief Executive Martin Reid and current Chief Financial Officer Robert Morton.

Home Capital, Canada’s biggest non-bank mortgage lender, said on Monday that Morton “will assume responsibilities for special projects outside the financial reporting group” after the company files its first-quarter results.

Robert Blowes, a former CFO, will assume the role on an interim basis until the company finds a new chief executive.

Blowes, who retired in December 2014, joined the company in 2010 and became the CFO in 2012.

“These are important steps in rebuilding confidence and putting the focus back on our profitable underlying business and its solid performance,” said Kevin Smith, chair of the company’s board.

The company said it had a short list of candidates, and intends to identify a replacement for Soloway as soon as possible.

Soloway will contest elections to the board at the company’s annual general meeting on May 11, Home Capital said.

Blowes, who was elected to board in May 2015, will also stand for re-election at the annual meeting.

Home Capital said on Friday it would defend itself against allegations by regulators that it withheld information about fraud by mortgage brokers.

The OSC has set a hearing on the matter for May 4.

In July 2015, the company said it had suspended contracts with 45 independent mortgage brokers after an investigation found they had falsified information about borrowers’ incomes.

Home Capital said at that time that it had released the information following a request by the OSC.

Reid’s contract was terminated in March, and longtime director Bonita Then was appointed to the role on an interim basis.

The company said on Monday it was actively recruiting a CEO, and a successor will be named as soon as possible.

Home Capital also said Bank of Nova Scotia would resume sales of Home Trust deposit products from Monday, subject to a certain cap.

Home Capital’s shares had fallen 20.7 percent on Thursday, but gained 8.7 percent on Friday. (Reporting by Arathy S Nair in Bengaluru; Editing by Sriraj Kalluvila)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below