May 2, 2018 / 11:52 PM / in 3 months

U.S. investment house backs changes at Australia's scandal-hit AMP: Fairfax

SYDNEY (Reuters) - The largest shareholder in Australia’s AMP Ltd, U.S. investment house Harris Associates, supports the ouster of top executives after damaging revelations of misconduct at the wealth manager, Fairfax Media reported on Thursday.

FILE PHOTO: The logo of AMP Ltd, Australia's biggest retail wealth manager, adorns their head office located in central Sydney, Australia, May 5, 2017. REUTERS/David Gray

Harris, an activist manager holding 5 percent of AMP’s shares, has watched around one quarter of the value of its investment evaporate since March as an inquiry into Australia’s financial sector found AMP had misled customers and deceived the regulator.

“It’s one thing to make a mistake - it’s another how you handle that mistake,” Harris’s director of international research, Justin Hance, told Fairfax Media.

Harris did not immediately respond to a Reuters request for comment.

He said some evidence given at the inquiry, called a Royal Commission, was “very surprising and disappointing” and he supported the departures of AMP chief executive Craig Meller and chairwoman Catherine Brenner.

The inquiry, which is also examining the conduct of Australia’s biggest banks, is able to make recommendations including legislative changes and criminal or civil prosecutions.

Rating agency S&P Global said on Wednesday it would lower AMP’s ‘A’ rating by a notch to ‘A-‘ if the misconduct were to impact the firm’s core wealth management business or if the risk of fines and legal action increased materially.

Reporting by Jonathan Barrett in SYDNEY; Editing by Stephen Coates

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