Gallini directors re-emerge

TWO OF the founding directors of Securitised Endowment Contracts, a company planning to come to the stock market after only two years' trading, were also directors of Gallini Group, the men's clothing firm blamed for the 1990 collapse of Honorbilt, a small quoted company, writes Paul Durman.

The pathfinder prospectus for SEC, which deals in second-hand life insurance policies, does not mention Honorbilt, whose board Bernard Klug joined after the Third Market company took over the loss-making Gallini in September 1988. Jeffrey Pinnick, SEC's finance director, continued to serve as a consultant to Gallini for a few months after its acquisition.

Gallini rapidly ran up heavy losses and was found to be of no value, according to Honorbilt's 1989 accounts, which were qualified by its auditors. As financial difficulties overwhelmed Honorbilt in July 1990, the company sued for millions of pounds in damages from Shelley Pinnick, the reporting accountants on the Gallini purchase. Mr Pinnick was a partner of Shelley Pinnick until 1982.

Mr Pinnick said yesterday that the legal action was pursued by Honorbilt's receivers but had been vigorously defended by Shelley Simmons Pinnick, as the firm became.

SEC hopes to raise pounds 3m to pay off its debts of about pounds 1.4m. It reported a pre-tax profit of pounds 745,000 in the year to 30 September.