MONTREAL (Reuters) - Canada’s second-largest pension fund said on Tuesday it had replaced the chief executive and overhauled the board of its commercial real estate lending unit, after an outside investigation found ethical failures by a handful of employees.
Caisse de depot et placement du Quebec, which managed C$310 billion ($230 billion) at the end of 2018, named Rana Ghorayeb as the CEO of Otera Capital, replacing former chief executive Alfonso Graceffa who left earlier this year, the real estate lending unit said in a statement.
Ghorayeb previously served as an executive in the Caisse’s infrastructure division.
According to the outside investigation led by a services firm, four employees at Otera contravened their ethics codes by placing themselves in a situation of a conflict of interest, or by not declaring their positions in other companies, among other concerns.
Michael Sabia, chief executive of the Caisse said in a separate statement that the investigation revealed no fraud, but told reporters in Montreal that he was “shocked” and that the revelations were “unacceptable.”
Following the investigation, Otera’s board will be overhauled and the division’s governance will be held to the same standards as those at the Caisse, the pension fund’s statement said.
Otera, which offers commercial real estate financing products and services including interim loans for Canadian commercial properties, has an investment portfolio of almost C$14 billion as of year’s end 2018.
Reporting By Allison Lampert; editing by Grant McCool