Banking royal commission: Hayne report raises prospect of potential criminal breaches by AMP

AMP has a culture and governance practices that reveal “insufficient concern” for the law, says Hayne report.

AMP documents. Picture: AAP

Commissioner Kenneth Hayne has raised the prospect of potential criminal breaches by AMP over its so-called independent report on its fee-for-no service scandal.

Mr Hayne noted the corporate regulator is looking at the matter in relation to section 1315 of the Corporations Act, which covers criminal breaches.

The interim report also noted AMP (AMP) has a culture and governance practices that show “insufficient concern for adherence to the law” over its charging of customers fees for no service and its dealing with the corporate regulator in a way that was not “forthright and honest”.

The group’s financial planning boss Jack Regan told the commission the group made as many as 20 false or misleading statements to ASIC about the issue, and Mr Hayne saw no reason to doubt his evidence, adding that the statements could even be seen as “a deliberate attempt to mislead”.

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Senior staff at AMP knew about charging fees for no service, internal lawyers warned it was a breach of the law, and some junior staff even warned it was a breach, he said.

The conduct shows a “persistent and prevalent attitude of senior persons within AMP that it is acceptable to deal with ASIC other than frankly and candidly”, he said.

AMP may have engaged in misconduct by falsely suggesting to the corporate regulator that it had commissioned an “independent” report into its fee for no service scandal, Commissioner Kenneth Hayne said.

AMP asked law firm Clayton Utz for a report into its fees charged for no service and its misreporting of the scandal to ASIC, a report that was to be independent of the business.

Clayton Utz gave 22 drafts of the report to AMP and AMP made many suggestions about the content of the drafts, Mr Hayne said.

AMP appeared to suggest changes to the findings about the knowledge and involvement of AMP executives, and in particular then CEO Craig Meller, Mr Hayne said.

Given the “number and nature of the changes made to drafts”, Mr Hayne said it may be open to conclude AMP knew it was not an independent report.

Commissioner Kenneth Hayne also took AMP to task for not addressing whether the report was independent in its submissions.

At the close, AMP shares were up 1.59 per cent compared to a 0.32 per cent gain at 2pm.