Royal Bank of Canada’s former CFO sued the bank Thursday for wrongful dismissal, seeking almost C$48.9 million ($35.6 million) in pay and damages.

Nadine Ahn, whom the bank fired in April over an “undisclosed close personal relationship with another employee,” said she may have missed out on a chance to run the bank, according to the lawsuit, filed with the Ontario Superior Court of Justice and seen by Bloomberg.

Further, Ahn said the bank mischaracterized her friendship with Ken Mason, another RBC executive who was fired the same day, according to the lawsuit.

Mason also sued the bank, seeking roughly C$22 million in pay and damages.

“These claims are without merit, and we will vigorously defend against them in court,” RBC spokesperson Gillian McArdle said in a statement. “We conducted a thorough review with an investigation by outside legal counsel and the facts are very clear that there was a significant breach of our Code of Conduct based on the irrefutable evidence collected during the investigation.”

In his lawsuit, Mason argued that if he and Ahn were the same gender, their friendship wouldn’t have prompted an investigation. 

“RBC opted to make an example of [Mason] and Ahn by wrongly publicly shaming them in order to project moral righteousness, appearing to swiftly investigate and punish perceived corruption,” his lawsuit reads, according to Bloomberg. 

“RBC as a whole has been an environment for 'old-boys-club' cronyism," Mason added, according to Reuters.

In her filing, Ahn said RBC failed to provide “a fair opportunity to respond to the allegations, and the bank was, at least in part, motivated by stereotypical assumptions concerning friendships between women and men." 

Rumors and insinuations

At issue for the bank is the perception that the relationship between Ahn and Mason “led to preferential treatment” for Mason, who was promoted to vice president and head of capital and term funding last November.

An RBC employee used a confidential internal channel — known as “Speak Up” — to flag the situation to the bank in March, three sources told The Globe and Mail.

Rumors had swirled for some time about the nature of Ahn and Mason’s relationship, sources told the publication. But scrutiny intensified when the bank announced a reshuffle within the treasury division that elevated Mason above long-term peers, The Globe and Mail reported.

As CFO, Ahn had control over compensation and promotions in the treasury division, and she used her position to expand Mason’s role as senior leaders left the division — including in ways that led to pay increases, two sources said.

In her filing, Ahn said she and Mason had been friends since about 2013 — before she became CFO. RBC’s code of conduct didn’t require Ahn to disclose a workplace friendship, she asserted, adding that her “friendship with Mr. Mason was not concealed from RBC in any way.” 

In his filing, Mason took issue with the bank’s announcement of their termination, in which Mason isn’t named.

“The clear insinuation of the RBC Statement was that [Mason] and Ahn had had an extramarital affair and that [he] received career advancement and financial benefits as a result,” Mason’s filing reads. “This insinuation was false and defamatory.”

Further, Mason called Ahn’s firing a “discriminatory and unbalanced misstep by RBC [that] ended the career of a woman who was a candidate to be RBC’s first female Chief Executive Officer and caused colossal professional damage and personal and family embarrassment and privacy damage” for Mason, a “loyal long-term employee” of RBC.

Ahn, in her filing, also noted that she “was identified by RBC as a possible successor for the CEO position,” and had “maintained a spotless employment record.”

“Over 25 years of employment with RBC, Ms. Ahn proved herself as a loyal, trustworthy, and an extraordinarily talented leader, who overcame many gender-based hurdles during her employment,” her lawsuit reads. 

Incidentally, the day of Ahn’s dismissal marked the 25th anniversary of her start date at the bank, according to The Globe and Mail.

Two-hour meetings

According to Ahn’s court filing, RBC CEO Dave McKay sent a text message on the evening of April 4, asking Ahn to attend a meeting the next morning.

When she arrived, McKay was not there. But an external lawyer and a person from the bank’s employee relations group met with her. Her laptop and mobile phones were seized, according to her filing, which indicated the two-hour meeting “took the form of an interrogation.”

Mason, too, was asked to a meeting April 5 — with Graeme Hepworth, RBC’s chief risk officer, according to his filing. Similar in circumstance to Ahn’s account, when Mason arrived, Hepworth was not there, and Mason, according to his filing, was questioned for about two hours by external lawyers and a member of RBC’s employee relations group.

The lawyers “proceeded to ambush Ken with outrageous, damaging, hurtful and spurious allegations based on an anonymous complaint alleging that he had an inappropriate personal relationship” with Ahn, according to the filing. Mason, in the lawsuit, labeled the meeting “unfair, biased and procedurally flawed.”

Mason was told he would be suspended but was fired hours later, he claimed in his lawsuit. 

“A longstanding friendship and professional working relationship was mischaracterized by the anonymous accuser and by RBC,” Mason’s lawsuit reads.

Ahn, in her suit, called the move a “devastating” error on the bank’s part.

“RBC’s allegations are patently false,” Ahn said in her filing, according to The Globe and Mail, and that the way it broadcast her termination in a news release “caused her devastating, worldwide reputational harm, and impairs her ability to earn a living.”

Further, Ahn alleged RBC had already decided to replace her by the time she was questioned. The bank announced Ahn’s dismissal and Katherine Gibson’s appointment as interim CFO the same night.

McArdle, in her statement, said RBC holds employees, especially senior leaders, “to high ethical standards and a CFO’s integrity must be beyond reproach.”

As it stands, three of RBC’s nine most senior executives now are women, according to Bloomberg. When Erica Nielsen becomes head of personal banking Sept. 1, she’ll be the only female head of one of the bank’s major business lines, the wire service noted.