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Shares in insurance broker giant Steadfast Group (ASX: SDF) have dropped by 10 per cent today following news its CEO Robert Kelly has temporarily stepped aside as an external investigation launches into a 'workplace complaint' made against him.
The sharp drop represents approximately $682 million in market capitalisation wiped off the Sydney-based company, which manages a network of more than 400 brokerages across Australasia. Shares are trading at $5.60 each at the time of writing.
The SDF board has appointed Tim Mathieson, who is head of the Australasia Broking division, as acting CEO effective immediately until the conclusion of the investigation.
In an announcement to the ASX, Steadfast noted that Kelly will remain on full pay for the duration of the investigation.
“Given that the investigation into the allegations against Kelly AM is ongoing, and that to date no allegations against him have been substantiated, it would not be appropriate to comment further at this time,” the company added.
“The Board will provide further details to the market once this investigation is completed.”
The announcement comes at the same time Steadfast has released its AGM address to shareholders, which saw the group report a 17.2 per cent increase in underlying NPAT to $295.5 million.
Statutory NPAT, which includes non-trading gains and losses, increased from $228 million to $334.9 million.
Underlying revenue grew by 8.9 per cent to $1.825 billion, while underlying EBITDA also increased by 11.9 per cent to $591.4 million.
Frank O’Halloran, the board’s long-standing chair, asked shareholders for patience during the investigation while it carries out a “thorough process, in the interests of ensuring procedural fairness.”
O’Halloran has stepped down following the AGM, with Vicki Allen, who also sits on the board of ING Australia, GPT Funds Management and NSW government-funded TCorp, taking the reins.
“I look forward to working with my Board colleagues and the Steadfast leadership team to continue to develop and implement our Group strategy,” Allen said in her address.
Today’s announcement comes 10 months after Steadfast disclosed to the market that the Australian Securities and Investment Commission (ASCI) was investigating two of its employees for alleged insider trading.
In August, Steadfast released a revised document of its securities trading policy, which covered details about what is considered insider trading.
The watchdog’s investigation remains active.
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