Home Capital chairman: mortgage lender will fight OSC but focus on business

Home Capital seeks to reassure shareholders

TORONTO — The chairman of Home Capital Group says he remains confident about the lending company’s future despite recently announced allegations against the company, as well as two of its former CEOs and its current chief financial officer.

An open letter by Home Capital chairman Kevin Smith says the company recognizes that shareholder confidence has been shaken by the Ontario Security Commission’s allegations, released Wednesday.

The OSC enforcement staff allege, among other things, that the company and three men misled shareholders through financial statements and conference call comments in 2015. 

Following the OSC’s allegations, Home Capital’s stock (TSX:HCG) lost one-fifth of its value on Thursday, closing at $17.71 — the lowest since August 2009.

The stock regained some of its losses in early Friday following Smith’s letter and the release of Home Capital’s estimated profit for the first quarter.

Under standard accounting rules, Home Capital estimates it had 90 cents per share of diluted earnings for the first quarter and $1.02 per share on an adjusted basis.

A year earlier, GAAP profit was 92 cents per share and adjusted earnings were  96 cents per share.

At mid-morning, Home Capital was at $20.05 — up $2.34 from Thursday’s close but down $2.27 or 10 per cent from Wednesday’s close, prior to the OSC’s announcement.

The Canadian Press

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