The criticisms come in a 255-page report on the group and its subsidiary, Atlanta Fund Managers, published yesterday by two Department of Trade and Industry inspectors, Gabriel Moss QC and John Venning of the accountants Robson Rhodes.
Mr Moss and Mr Venning advocate substantial changes in the regulation of companies and the management of pension funds. These include the replacement of a clause in the Companies Act, which is described as 'difficult to understand or apply'.
They recommend that there should be at least one independent trustee on a pension fund board and that pension fund managers should be independent of the company or trustees. These recommendations are much stronger than those of the Goode Committee, set up to review pension regulation in the wake of the Maxwell scandal.
The DTI has sat on the report, which was completed in March 1991, to allow the Serious Fraud Office to proscecute a number of the main protagonists in the scandal, in which pounds 1.12m was illegally lent to Bestwood's chairman, Tony Cole.
The SFO obtained convictions against three people: Mr Cole, who received a suspended sentence and was disqualified from being a director for 10 years; William Collins, former senior partner of the stockbrokers Guy Puckle; and Peter Southgate, an accountant from Colchester. The SFO said yesterday the case was closed. The DTI said it would not be taking any action against anybody criticised in the report.
These include Terry Ramsden, the former City whiz-kid who walked free from court in November after pleading guilty to a pounds 90m fraud, and John Scholes, former corporate financier at the merchant bank Morgan Grenfell, who was described in the report as having 'behaved badly'.
BDO is criticised in its auditing of Bestwood and of unit trusts managed by Atlanta Fund Managers. Isobel Sharp, BDO technical partner, said she thought the criticisms minor. Lloyds is blamed for failing to identify investments by the unit trusts in private companies, which were ultra vires. The bank said it no longer operated a trusteeship department for unit trusts.
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