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AMP shake up fails to reassure market

AMP shake up fails to reassure market

AMP Ltd Chief Executive Paul Batchelor met with major institutional shareholders to explain the company's surprise management shake up, which analysts said won't fix AMP's operational problems. The Australian and UK financial services company announced the departure of highly regarded Chief Financial Officer Marc de Cure, and the apparent grooming of Andrew Mohl as the next CEO, after the market closed Wednesday. With no inkling of any such moves at briefings and investor presentations last month, the changes sparked a host of theories about Mr Batchelor's motives.

"It was sudden," said John Seviour, manager of Australian equities at Perpetual Investments, which holds about 5 percent of AMP. "It is always a concern when senior management move at short notice."

Another institutional shareholder surmised the executive upheaval reflects boardroom pressure from chairman Stan Wallis and others on Mr Batchelor to fix the company.

"We consider the key negative issue for AMP is the embedded risks within the UK product range," Credit Suisse First Boston said. The investment bank said Mr de Cure's exit will "create an important management gap during a period of near unprecedented volatility in capital markets for life insurers."

AMP shares ended higher, but dealers said the gains weren't linked to the management changes. The shares rose 2.4 percent to A$13.51 (US$7.30) each Thursday.

AMP has a market value of A$15.3 billion and is regarded as a potential target for National Australia Bank Ltd or another big local bank if its performance doesn't improve during the next year or 18 months.

Mr Batchelor and other executives weren't available to comment.

One person close to the company said Mr de Cure, who often hosted briefings with Mr Batchelor, wanted a wider operational role at the company. He will stay on until around the end of the year.

The person close to the company said Mr Mohl, who takes on the new role of chief operating officer of financial services, doesn't have the international experience that would make him a candidate to succeed Mr Batchelor.
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