FILE PHOTO: Warren Buffett, CEO of Berkshire Hathaway Inc, pauses while playing bridge as part of the company annual meeting weekend in Omaha, Nebraska U.S. May 6, 2018. REUTERS/Rick Wilking
(Reuters) – Canadian mortgage lender Home Capital Group Inc (HCG.TO) said on Wednesday that Warren Buffett’s stake in the company will drop to less than 10 percent after the completion of a share buyback.
Shares of Home Capital tumbled 18 percent in early trading.
Berkshire Hathaway Inc (BRKa.N) bought a 20 percent stake in Home Capital last year and extended a C$2 billion credit line after the company’s investors withdrew more than 90 percent of funds from its high-interest savings accounts.
The withdrawals accelerated after April 19, 2017 when the Ontario Securities Commission accused Home Capital of making misleading statements to investors about its mortgage underwriting business.
Home Capital reached a settlement with the commission in June and accepted responsibility for misleading investors.
Reporting By Aparajita Saxena in Bengaluru; Editing by Anil D’Silva