Morgan Grenfell banned from MGN pension role

MORGAN GRENFELL has been disqualified from a lucrative contract to manage part of Mirror Group Newspapers' pension scheme because of its past connections with Robert Maxwell.

The bank's asset management arm has been blacklisted by the trustees of the MGN scheme from managing part of MGN's pension scheme. The trustees have strict rules governing which firms are allowed to manage the money left in the pension scheme, which was depleted when Maxwell stole more than pounds 400m from it.

The rules ban any firms that looked after the money while Maxwell was in charge of the group or that advised Maxwell before his death.

Morgan Grenfell, which was believed to be free of Maxwell connections, won a beauty parade to manage the funds in the past service scheme, which are worth about pounds 9m. But after winning the contract, it emerged that the group had looked after part of the pension scheme at AGB, the West London-based research company owned by Maxwell's private interests.

The merchant banking side also advised Maxwell on two deals, the sale of certain magazines, exhibition and company information assets by Pergamon AGB in 1989 and the controversial purchase of the Philip Hill Investment Trust by the British Printing and Communication Corporation (later renamed Maxwell Communication Corporation) in 1986.

Morgan Grenfell agreed to withdraw its name from consideration, and the MGN past service scheme contract went to the runner-up, Newton Fund Managers, a small firm run by the investment guru Stewart Newton.

Senior executives at Morgan Grenfell, which is headed by the former Phillips & Drew fund manager Keith Pursey, are understood to be unhappy about the whole process. The firm was hired to manage the AGB funds by the management that was there before Maxwell took the group over and was fired by Maxwell in 1990, long before any problems started with the pension schemes.