Home Capital founder to step down from board amid regulatory probe

Mon Apr 24, 2017 11:55am EDT
 
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By Arathy S Nair

(Reuters) - Canada's Home Capital Group Inc (HCG.TO: Quote) 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.

Shares of Canada's biggest non-bank mortgage lender fell as much as 5.7 percent to C$18.15 in morning trading.

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

Home Capital on Monday said Morton "will assume responsibilities for special projects outside the financial reporting group" after the company files its first-quarter results.

Board member Robert Blowes, a former CFO, will assume the CFO's role on an interim basis.

"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.

Home Capital 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 annual general meeting on May 11, Home Capital said.   Continued...