AMP’s share price has fallen to a record low after investors learned last week that the UK-based Pearl operation is in breach of minimum capital requirements.    

The Pearl revelation came about last week after AMP released a prospectus for its $1 billion issue of preferred securities. In it, AMP said Pearl will not meet its capital requirements until the end of the year. It said Pearl’s ability to meet the requirements will be “subject to management initiatives and no material deterioration in investment markets from current levels”.   

Investors reacted to the surprise by wiping $1.1 billion from AMP’s market value, causing the share price to sink to an all-time low. The stock has lost more than a third of its value this year – and an S&P’s downgrading.

Despite the fact that this is much the same fate as most British life companies this year, AMP is having a tough time getting its shareholders to resume their seats. It has released a statement downplaying the problem, saying AMP remains well-capitalised and able to support its British financial services operation. “Investors should not confuse the issue of regulatory capital with that of economic solvency – they are separate issues,” the statement said.

But investors and analysts are fuming about AMP’s failure to fully disclose its position in the UK. APRA and ASIC – and even the ASX ­– have said they will keep a close watch to ensure that shareholders are kept informed.