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RE/MAX closes internal investigation of $2.4M loan made by former co-CEO

RE/MAX Holdings Inc. has closed its internal investigation of transactions and a personal loan made by former co-Chairman and CEO David Liniger to the company's then co-CEO Adam Contos, which had delayed the reporting of the company's 2017 third-quarter earnings.

A special committee and outside advisers appointed by the board found that a $2.4 million loan that Liniger made to Contos, at a below-market interest rate for the purchase of a home, as well as certain other cash and noncash gifts, did not involve the use of corporate funds, according to a company release.

Even though the loan and gifts did not involve the use of company funds, RE/MAX's lead independent director Dick Covey said the nondisclosure of these personal transactions violated company policies and the special committee concluded that these transactions created an actual or apparent conflict of interest.

The special committee also found that noncompliance with RE/MAX's policies related to workplace conduct was limited to Liniger's actions and did not extend to other members of the company's leadership team.

RE/MAX's board has accepted that the nondisclosure was unintentional and Contos has committed to repay the loan as promptly as possible, Covey added.

As a result of the investigation, RE/MAX said its board and senior leadership team will implement remedial measures, including enhanced corporate policies and practices related to the reporting of gifts, loans, conflicts of interest, workplace conduct and enhanced training on the responsibilities of company officers and leaders.

Liniger will remain on the board as nonexecutive chairman, while Contos will remain as CEO.

RE/MAX's board has also broadened the scope of Covey's responsibilities as the company's lead independent director.