DMG faces fine
Sunday 01 December 1996
This weekend, however, it launched a bitter attack on leaks from City watchdog the Investment Management Regulatory Organisation (Imro) which suggested compensation to investors might reach more than pounds 200m.
"The incident is a serious one. We recognise that. We do expect it to be a record fine," one senior DMG source said this weekend.
"But the implication [of the leak] is that we are trying to duck our responsibilities. The pounds 200m is inaccurate and pure speculation. The basis for compen- sation has yet to be agreed."
DMG fired Mr Young in September after its German parent Deutsche Bank pumped in pounds 180m to cover a "black hole" from speculative investments in breach of internal and City rules.
Since then, it has also acted speedily to clear out five other top executives, including fund management chief Keith Percy, and immediately pledged compensation to up to 90,000 investors who put in pounds 1.4bn.
It is also continuing its investigations into Mr Young's activities in offshore tax havens while talking with Imro. Losses on the speculative stocks transferred in September are expected to be less than pounds 180m, however.
The three top-performing European funds affected - Europa, European Growth and European Capital Growth - are now languishing near the bottom of their sector, industry figures showed last week.
However, all European unit trusts have performed poorly since September. DMG will argue that the compensation yardstick should take this into account and not just a comparison against the star performing UK funds.
Imro chief executive Phillip Thorpe was unavailable for comment yesterday. City sources, however, speculated that the leak might be due to Imro pique over Deutsche Bank's decision to transfer management responsibility for its unit trusts to Frankfurt last week.
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