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Shares of Home Capital Group Inc. tumbled nearly 10 per cent Tuesday, as investors gave their verdict on the company's decision to sack chief executive officer Martin Reid after less than a year in the job.

Mr. Reid was terminated Monday, making way for director Bonita Then to take over as interim president and CEO.

Home Capital did not give a specific reason for the change, saying only that it "requires leadership that can bring to bear a renewed operational discipline, emphasis on risk management and controls, and focus on improving performance."

Analysts say that the timing and uncertainty surrounding Mr. Reid's exit doesn't bode well for the stock. His departure comes amid a push at the company to slash expenses and grow assets in a Canadian real estate market that is both frothy and adjusting to new federal mortgage rules.

It also comes two weeks after Home Capital said that several current and former officers and directors have received enforcement notices from the Ontario Securities Commission related to the company's past disclosure practices and, in some cases, trades in its shares. An OSC enforcement notice can be a precursor to disciplinary action by the regulator.

Mr. Reid took over the reins at Home Capital in May of last year, when long-time executive Gerald Soloway retired after nearly 30 years in charge. Mr. Reid joined Home Trust Co., the regulated lending subsidiary of Home Capital, as treasurer in 2007.

In 2010, he was promoted to the role of president of Home Capital and Home Trust.

Marc Charbin, an analyst at Laurentian Bank Securities, wondered whether the board was holding Mr. Reid "solely accountable" for the company's poor results in recent years.

The company's performance has been hampered by broker terminations, declining loan originations and missed financial guidance.

"Investors are unlikely to get a straight answer on this matter," Mr. Charbin said. Home Capital shares are down 28 per cent in the past year and have lost more than half their value since mid-2014.

Geoffrey Kwan, an analyst at RBC Dominion Securities Inc., questioned the company's "unexpected" decision to dismiss Mr. Reid without naming a permanent successor.

He also said it was "interesting" that neither Mr. Soloway nor former chief financial officer Robert Blowes were named interim CEO. Both former executives are still directors of the company.

Home Capital disclosed last month that it had received an enforcement notice from staff at the OSC related to its disclosure in 2014 and 2015 about an investigation into falsified mortgage documents, which prompted the company to suspend 45 mortgage brokers in its network. On March 14, Home Capital added that the OSC has also issued enforcement notices to "several current and former officers and directors of the company" related to that disclosure and trades in the company's shares.

Earlier this year, a proposed class action lawsuit was initiated in Ontario against the company and three of its officers or former officers – Mr. Soloway, Mr. Blowes and current CFO Robert Morton. The lawsuit, which alleges that misrepresentations were made in public filings, seeks $200-million in damages.

The company has maintained that it believes its disclosures satisfied applicable disclosure requirements.

"While a management restructuring of an underperforming company can often be a positive, the large amount of uncertainties surrounding HCG point to continued risks in the near term," Dylan Steuart, an analyst at Industrial Alliance Securities Inc., said in a research note.

"The uncertainty surrounding earnings development (particularly while a CEO search is underway), and potential overhangs regarding recent OSC investigation into company disclosures lead to a continued cautious view."

Ms. Then has a background in consumer products and food and was formerly an executive at Specialty Foods Ltd. and Humpty Dumpty Snack Foods Inc.

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