TORONTO — Royal Bank of Canada has laid out in court documents the details of why it fired its former CFO and another employee for allegedly being in an intimate relationship that led to conflicts of interest.
Canada's biggest bank said in filings made Friday and a week earlier that there is overwhelming evidence that former CFO Nadine Ahn and Ken Mason had breached company policy and their firing was justified.
RBC was responding to lawsuits launched by both Ahn and Mason earlier in August seeking tens of millions of dollars in compensation for wrongful dismissal.
Ahn and Mason claimed in their lawsuit that there was no merit to claims they were in a close relationship or that Ahn used her position to unduly advance Mason's career, and that the accusations were based on speculation and a lack of evidence.
The two claimed the accusations are based in part on gender-based stereotypes about friendships between women and men.
In its response, RBC said it launched an investigation after it received an anonymous whistleblower complaint that someone had seen the two kissing and hugging while exiting elevators at the Fairmont Royal York hotel in downtown Toronto.
"We received allegations from an anonymous whistleblower and immediately commenced a thorough investigation conducted by external legal counsel," said spokeswoman Gillian McArdle in a statement.
"We were disappointed to learn the allegations were true."
The bank said in filings that along with other evidence, the investigation found the two had sent thousands of messages, including ones where they planned anniversary drinks, used the pet names Prickly Pear and KD for each other and said they loved each other.
The bank said Ahn had sent a late-night email expressing her desire to be with Mason, while he ordered two commemorative "LoveBook" photo albums to his office to celebrate their 10th anniversary, that the two shared romantic poetry and met up for monthly drinks.
"Contrary to the statements of claim from Ms. Ahn and Mr. Mason, the investigation showed there was an undisclosed close personal relationship, and that Ms. Ahn misused her authority as CFO to directly benefit Mr. Mason," said McArdle.
In its response and counterclaim, the bank said that Ahn used her position to help promote Mason and secure him pay increases, leading to his salary increasing some 70 per cent from when she was promoted to the CFO in Nov. 2021.
The bank is seeking repayment from Mason and damages from Ahn for what it calls the $1.14 million in "excess compensation" from the salary increases, plus millions of dollars in repayments from both for incentive payments made to them because of alleged breaches of fiduciary duty.
RBC said that when it separately confronted the two of them on April 5 with its evidence, both maintained that they were friends but denied being in a romantic or intimate relationship, just as they did in their lawsuits.
Ahn and Mason have requested in their filings that those assertions be tried in a Toronto court.
This report by The Canadian Press was first published Aug. 26, 2024.
Companies in this story: (TSX:RY)
Ian Bickis, The Canadian Press
