The fund manager, Eoin Costello, has told friends that he was forced to leave Legal & General after going ahead with publication of an article which, among other things, warned investors against buying shares in companies run by men with dickie bows, gold ID bracelets, toupees or suntans.
He claims he told a number of L&G directors of his intention to publish the article, and believed he had their permission. After they changed their minds, Mr Costello decided to go ahead anyway.
L&G dismissed suggestions that the case had parallels with the Terry Smith affair. Mr Smith was recently suspended as head of research at UBS Phillips & Drew after publishing a controversial book, Accounting for Growth, on techniques companies use to boost their profits artificially. At least one company mentioned in the book, Grand Metropolitan, used its banking relationship with Union Bank of Switzerland, owner of Phillips & Drew, to try to halt publication.
L&G insisted Mr Costello had not been fired for writing the article as such. It is understood that his seniors believed it to be 'too over the top' to carry the L&G name, and withdrew authorisation. Most of the companies cited in the article are bust, but at least two, the advertising groups Saatchi & Saatchi and WPP, are still quoted. It is unlikely that either would have complained to L&G.
UBS Phillips & Drew last week wrote to institutional clients to explain its position on Terry Smith. Rudi Mueller, the chairman, said UBS objected to how the book was produced because it departed from the firm's procedures for maintaining its reputation for high-quality research. 'Allegations that Mr Smith has been suspended due to pressure from major companies are both ill-founded and objectionable,' he said.Reuse content