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Home Capital names new director; initial investor to step down

Published 2017-05-18, 07:00 a/m
© Reuters.  Home Capital names new director; initial investor to step down
HCG
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May 18 (Reuters) - Canada's biggest non-bank lender Home Capital Group Inc HCG.TO named a new director and said one of its initial investors would step down from the board.

Home Capital named James Lisson, who has worked with law firms and with the Canadian Department of Justice as a consultant on commercial law, to its board of directors.

The company said John Marsh would step down from the board.

Home Capital has been struggling to finance its assets as its high interest deposit accounts have fallen by about 94 percent since March 27, when the company terminated the employment of former Chief Executive Martin Reid.

The withdrawals accelerated after April 19, when Canada's biggest securities regulator, the Ontario Securities Commission, accused Home Capital of making misleading statements to investors about its mortgage underwriting business. The company has said the accusations are without merit.

Last week, the company said uncertainty around future funding had cast doubt about whether it could continue as a going concern. Capital provides loans to borrowers, such as self-employed workers or newcomers to Canada, who may not meet the strict criteria of the country's biggest banks.

Its problems have coincided with the introduction of measures to cool Toronto's red-hot housing market, including a tax on speculative buyers, and sparked worries it could trigger a broader housing market collapse.

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