Norman Riddell, Invesco's chief executive in the UK and Europe, said that the root cause of a two-year investigation into the company by Imro, the fund management regulatory body, had been 'a failure to take cognisance of the Financial Services Act (introduced in 1986) and the changing role of the regulators'.
This failure had not been the fault of any one individual, he stressed. In future the mistakes that led to Imro's 55 charges and its huge fine would be avoided because the company had completely overhauled its management.
Mr Riddell, who joined Invesco in March, stopped short of talking specifically about the previous management, but when asked why Invesco had failed to come to grips with the Act, he said: 'I guess you'll have to ask the management in charge at the time. I think the new management will make a big difference.'
Mr Riddell's comments followed a scathing condemnation of previous group practices on Thursday by Charles Brady, who took over from Lord Stevens in April. Mr Brady said: 'What was acceptable in the City 10 years ago is no longer acceptable now. Invesco did not adapt quickly enough.'
Lord Stevens, he said, 'was the epitome of a style in vogue in the City 25 years ago, but like many in the City he didn't change as fast as he should have done. I think he might agree with that.'
Mr Riddell appeared to contradict Mr Brady on the need for more personnel changes at Invesco. The chairman said on Thursday that all the main management changes made necessary by the Imro investigation had now been made. But yesterday Mr Riddell said that further appointments would be made 'in a range of positions'.
Mr Riddell was reluctant to pinpoint the company officials behind some of Invesco MIM's most embarrassing breaches of City regulations. He refused to say who had been in charge of compliance during the years in which the actions leading to the Imro charges took place.
He also declined to name the trustees who had been responsible for a unit trust pricing error in 1987, which subsequently led to Invesco making a pounds 500,000 repayment to clients.
Mr Riddell also refused to confirm which company's share certificates Invesco had parted with without instructions, as detailed in another of the Imro charges.
On Thursday John Morgan, the chief executive of Imro, said one of Invesco's main problems had been 'a lack of openness'. Imro also levied costs of pounds 1.59m against Invesco. Yesterday Mr Riddell said a large part of the overall costs of the affair represented potential business lost due to bad publicity.
None the less, he presented his new top management team, including Alan Wren, managing director of retail, as determined to press on and build the business. But he admitted that the company faced one large remaining problem in the shape of the outstanding litigation from the Mirror Group pension scheme trustees, who are suing Invesco for pounds 11.3m.
The case is due to go to court in January 1994. Sources within Imro and the Securities and Investment Board - the overall City regulatory body - suggested this week that Invesco could solve the problem quickly and without recourse to expensive court action by making a payment into Sir John Cuckney's Maxwell pension trust.
The Cuckney fund was established so that City institutions involved in the Robert Maxwell saga could make payments to his pensioners without implying any admission of guilt. This is particularly important because of the huge amount of litigation outstanding over the case.
Mr Riddell said yesterday that no one had yet been in touch with Invesco suggesting that such a payment be made. A spokesman for the Cuckney fund's Maxwell pensions unit said that it would be happy to act as mediator between the trustees of the pension fund and Invesco.
Reassuring investors, page 20
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