Gerald Soloway, former Home Capital CEO, is stepping down from the company's board of directors, Home announced Monday.
Current CFO Robert Morton -- who along with Soloway and ousted CEO Martin Reid is being investigated by the OSC -- will also be assigned a new role.
“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 board of Home Capital. “We know that we have not met the full expectations of some of our valued stakeholders, which we deeply regret. These changes will ultimately result in enhanced management and governance leadership, and bring valuable new perspectives to Home Capital.”
The announcement comes mere days after the lender shared confidence in its future amid Ontario security regulator’s allegations that the current and former executives broke the law in handling a mortgage loan fraud scandal.
“I recognize that we have had our share of challenges recently and the confidence of our stakeholders has been understandably shaken. I also know that the best way for us to move forward is to view these challenges as opportunities to improve the way we do business and to regain your confidence and our strong reputation,” Kevin Smith, Chair of the Board at Home Capital Group and Home Trust
, wrote in an open letter to shareholders. “That’s what we will be doing in the coming weeks and months while focusing on executing our strategy and delivering on our goals. We continue to see strong volumes and excellent credit quality, demonstrating the underlying strength of our model and strategy.
“We are optimistic that the positive trends we have seen in our business will continue to build.”
Home Capital released pre-quarterly performance figures Friday, prior to next week’s scheduled earnings release.
The company reported earnings of $0.90 on a diluted earnings per share basis, and $1.02 on an adjusted diluted earnings per share basis.
The OSC issued a notice of hearing and statement of allegations last week that named the company and former chief executives Gerald Soloway and Martin Reid. It also named current CFO Robert Morton.
Home Capital suspended 45 brokers in the summer of 2015 for allegedly falsifying mortgage documents.
The OSC alleges the Toronto-based lender mislead shareholders following in its financial statements and a 2015 conference call by not sufficiently providing all the facts about the case.
Home Capital is confident it satisfied all disclosure requirements.
“In closing, we will continue to vigorously defend our approach to disclosure in the Ontario Securities Commission (OSC) proceeding,” Smith said. “While the OSC process may take some time, management and the Board are focused on continued profitable growth and industry leading customer service.”
The lender’s full quarterly results are scheduled for release on May 3.
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