Invesco man left old job under cloud

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The Independent Online
THE EXECUTIVE put in charge of the stock-lending business of Invesco MIM, the fund manager that lent more than pounds 22m of pension scheme shares to companies owned by Robert Maxwell without authorisation from the funds' trustees, had been dismissed from a previous job for dealing irregularities and was sued in a civil action for fraudulent misrepresentation.

Invesco MIM, headed until recently by the press baron Lord Stevens, has been fined pounds 750,000 by the Investment Managers' Regulatory Organisation, with pounds 1.6m in costs, for 22 breaches of City regulations including some relating to the Maxwell stock lending. It is also facing legal action by trustees of the Mirror Group Newspapers' pension fund, who are claiming nearly pounds 90m from Invesco and four other City firms. The case is due to come to court next year.

However, it is understood there are moves to ask Sir John Cuckney, the head of the Government-sponsored Maxwell Pension Unit, to see if an out- of-court settlement can be found.

Invesco hired Timothy Daily, 30, in April 1990 and placed him in charge of the stock-lending business. Mr Daily was intimately involved in the stock- lending transactions with Maxwell's fund management groups, London & Bishopsgate International and Bishopsgate Investment Management, which started in October 1990, 13 months before Maxwell died.

However, less than three years before joining Invesco he had been fired from Bailey Shatkin, a Eurobond trader owned by LIT Holdings, after Bailey had discovered trading irregularities.

Bailey then sued him, alleging breach of contract, breach of fiduciary duty, fraudulent misrepresentation and deceit. The case was settled out of court, with Mr Daily paying Bailey pounds 75,000.

Despite the sacking being widely reported, Invesco says it was unaware of his background. 'Invesco MIM did not know about this when it hired Mr Daily,' said a spokesman. 'The executives who hired Mr Daily have now left the firm and we cannot explain how they could have missed it. Mr Daily himself left the firm a year ago.'

Mr Daily, who now runs his own business, gave evidence in court last December that he had learned as early as October 1990 that the shares Invesco had lent to the Maxwell companies were being used as security for loans to other Maxwell companies - loans which ultimately were not repaid. But despite discussions with other senior executives at Invesco, this stock lending was not reported to Imro.

Mr Daily said he learned this information after discussion with Mark Haas, a senior executive at stockbroker Lehman Brothers, at a stock-lending conference in Naples, Florida. Mr Haas has disputed this claim.

However, the testimony of Mr Daily and that of Ratan Engineer, the former finance director, indicates that Invesco had severe reservations about the stock-lending programme as early as October 1990.