AMP Ltd 

Resignation of the Chairman & Governance Issue: AMP Limited (ASX: AMP) stock has fallen 23.73% in three months as on May 01, 2018.  The company had recently announced the resignation of Catherine Brenner as Chairman. However, Mike Wilkins has been appointed as Executive Chairman, effective from 30^th April. The company had also announced that Group General Counsel and Company Secretary Brian Salter will leave the company.
 
Particularly, this has come as the group has fallen under the trap of Royal Commission investigation and the findings have not been good. Issues have been raised for the company’s governance in the Royal Commission and their impact on the reputation of AMP. The revelations raised in the Royal Commission are about charging fees for not providing services, misleading the corporate regulator and the board's potential knowledge of the failings. AMP’s Board is now reducing fees for all AMP Limited Board Directors by 25 per cent for the remainder of the 2018 calendar year. Further, the employment and remuneration consequences for the individuals within the business responsible for the fee for no service issue will be determined after the finalisation of an ongoing external employment review, that is expected to complete shortly. The wealth management giant now faces possible criminal charges after the Commission heard it and the group unveiled that how it has unlawfully continued to charging fees to “orphan” clients without delivering any form of service. While AMP is one of the many major Australian financial services companies under scrutiny for investigation of misconduct in the banking sector, but the group seems to be hit the hardest based on the findings so far.
 
The market, basis the extent of misconduct, is anticipating class actions against AMP to be the biggest in Australia’s legal history. In this regard, litigation funder IMF Bentham and others including Quinn Emanuel Urquhart and Sullivan are seen to be coming forward to support the class action against the group that admitted of charging its customers for advisory services that were never provided. No wonder that the group’s conduct has been titled to be criminal in nature. While it will be difficult to build the trust among customers once again, AMP has surely become one group that is succumbing to the Royal Commission and the investors seem to be paying a price for this as the market capitalization of the group is shrinking with each passing day. The question arises whether to buy in the dip or not. The group seems to be losing its brand value and customers might want to move out of the financial group given the deceptive nature of dealings that have merged lately. Looking at the prevailing set of developments, it might be better to avoid the stock at the current price of $ 4.150 as it might be difficult to predict the potential in the upcoming period unless some signs of recovery are seen.

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