NEW YORK (Reuters) – Leon Black said Monday he will step down from his position as CEO at Apollo Global Management Inc following an independent review of his ties to late financier and sex offender Jeffrey Epstein.
The review, conducted by the law firm Dechert LLP, found that Black was not involved in any way in Epstein’s criminal activities. Black paid Epstein $ 158 million for tax and estate planning advice and related services between 2012 and 2017, according to the review.
Black, 69, said that although Dechert’s review confirmed he did not commit any wrongdoing, he “deeply” regretted his involvement with Epstein.
“I hope the results of the review, and related improvements, reaffirm that Apollo is dedicated to the highest levels of transparency and governance,” Black wrote in a note to Apollo fund investors seen by Reuters.
Apollo co-founder Marc Rowan, 58, will take over as CEO, with Black remaining president of Apollo, the company said.
The revelations about Black’s ties have strained the New York-based company he co-founded 31 years ago and has grown into one of the largest private equity and credit investment groups in the world.
Apollo executives warned in October that some investors had suspended their commitments to the acquisition company’s funds pending the results of the review.
Apollo stock has been down 1% since the New York Times reported on October 12 that Black paid at least $ 50 million to Epstein for advice and services, when most of his clients had abandoned him.
Shares of fellow Blackstone Group Inc, KKR & Co Inc and Carlyle Group Inc were up 19%, 10% and 23% respectively over that period.
The conflict committee of the Apollo board of directors continued the review with Black’s support in October.
On Monday, Apollo said it will pursue a “one share, one vote” corporate governance structure that will eliminate the shares with special voting rights that currently give Black effective control of the company. He said the move could qualify him for listing on the S&P Global indices.
Apollo also said he will seek to give his council more authority to oversee its activities, eroding the power of its Black-led executive committee.
The board will be expanded to include four new independent directors, including Avid Partners founder Pamela Joyner and physician and scientist Siddhartha Mukherjee, Apollo said.
Apollo co-chairs Scott Kleinman and James Zelter will join the board of directors and take on more responsibility in managing day-to-day operations, the company said.
(This story goes back to correcting Black’s age at 69 from 70 in the third paragraph)
Reporting by Mike Spector and Chibuike Oguh; Additional reporting by Lawrence Delevigne and Jessica DiNapoli in New York; Editing by Dan Grebler and Sonya Hepinstall