Shares in FBD Holdings slumped by more than 3pc yesterday as the insurer’s internal inquiry into CEO Fiona Muldoon continues to cast a pall over the stock.
The fall also follows news, first reported by the Irish Independent, that Axa is forging into the farming insurance sector in a move that further shakes up FBD’s core market.
In a note to clients yesterday, Goodbody stockbrokers described Axa’s decision as a “net negative” for FBD. This is despite the insurer’s overwhelming dominance of the sector borne out of its historical ties “with farming organisations and the rural community”.
The internal investigation into Ms Muldoon has pitched the recovering organisation into a period of uncertainty and raised questions in the market about how the board will react to an adverse finding. The Irish Independent understands that a contingency plan has been mapped out for that eventuality.
FBD has refused to comment.
Bank of Ireland, where Ms Muldoon is a non-executive director, also declined to comment on the inquiry into Ms Muldoon and declined to outline its policy for non-executive directors that are under scrutiny. The high-profile businesswoman and former director of the Central Bank joined the lender’s board in 2015, when former chief executive Richie Boucher was at the helm.
Mr Boucher, as revealed by this newspaper, has since become a consultant to Prem Watsa, the Canadian billionaire who founded Fairfax Holdings.
The multinational pumped €70m into FBD via a convertible loan in 2015 after the insurer sank deep into the red.
The bond converts into a near 20pc equity stake in March and Ms Muldoon has said previously that she expects Fairfax to exercise the option to convert the debt into equity.
FBD has given no guidance as to when the inquiry will be concluded, or the issues being examined, but in an announcement issued late on Friday it described the probe into its CEO as “ongoing”.
In December 2015, Ms Muldoon told the ‘Irish Farmers Journal’ that her leadership style is “best described as collegiate, and committed around issues like accountability”.