RBC countersues former CFO Ahn, claims breach of code of conduct
Adds details from RBC's statement in paragraphs 12-13
By Nivedita Balu
TORONTO, Aug 16 (Reuters) -Royal Bank of Canada RY.TO filed a countersuit against ousted CFO Nadine Ahn on Friday, detailing findings of its internal investigation into her alleged intimate relationship with a subordinate, and accusing her of breaching its code of conduct.
Ahn sued RBC last week for wrongful termination and alleged that "gender-based stereotyping" was a factor in her dismissal. She has sued RBC for nearly C$50 million ($36.56 million).
In April, RBC, Canada's biggest bank, said it had terminated Ahn after its investigation found she was in an undisclosed close personal relationship with another executive, Ken Mason, that led to his preferential treatment including promotions and compensation increases.
Mason has also sued the bank for about C$20 million for wrongful termination and has denied any close personal relationship with Ahn.
In its statement of defense and counterclaim filed with the Ontario Court of Justice, RBC said it received an anonymous whistle-blower complaint that Ahn and Mason were engaged in an intimate relationship.
RBC said it reviewed electronic communications maintained on its systems and found through its investigation that Ahn and Mason regularly used personal and work devices to communicate.
The court filing detailed Ahn and Mason's relationship starting in 2013 or earlier, highlighting their dates, poems written by Mason, intimate email exchanges and what the bank said was code they used to describe meeting for drinks.
RBC said Ahn should repay RBC about C$3.3 million for payments related to its performance-based deferred share unit program, short-term incentive program and gains on the exercise of RBC stock options.
Ahn's intervention led to Mason receiving total compensation increases amounting to 58% over two fiscal years starting in 2021, and she made the decision to promote Mason as vice president and head of capital and term funding in 2023, the bank said.
Lawyers for Ahn, 53, and Mason, 57, did not immediately respond to requests for comment on the countersuit.
In her wrongful termination lawsuit, Ahn said the bank's allegations were "patently false" and her successes, career and reputation were destroyed in an instant by the bank.
A spokesperson for RBC said on Friday it had been disappointed to learn the allegations were true. Ahn was a "highly respected member" of the executive team with fiduciary responsibilities and the bank had "great confidence in her abilities," the spokesperson said.
"Contrary to the statements of claim from Ahn and Mason, the investigation showed there was an undisclosed close personal relationship, and that Ahn misused her authority as CFO to directly benefit Mason," the spokesperson said in a statement, adding that all senior executives have a duty to follow its code of conduct.
($1 = 1.3676 Canadian dollars)
Reporting by Nivedita Balu in Toronto; Editing by Daniel Wallis and Muralikumar Anantharaman
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
