The hard-hitting report will recommend that the Bank of England and the Treasury exert pressure upon banks to return nearly pounds 200m worth of investments taken from the pension funds by the late Robert Maxwell and used as collateral for loans to his private companies.
The committee intends to call the bankers holding Maxwell assets to give evidence, and to question them about their internal procedures. It has the power to force banks to disclose sensitive internal documents, and will use this in the hope of embarrassing them into giving the assets back to pensioners.
Banks which will be called to give evidence include Credit Suisse, Lehman Brothers, the US investment bank, and Banque Nationale de Paris, the French state bank. In addition, City firms with close connections to Maxwell, including Goldman Sachs, Invesco MIM and Bank of America, will be called to give evidence.
David Shaw, the MP and former merchant banker who sits on the committee, says that the banks holding assets did not check thoroughly enough about who owned the shares. 'Their fitness under the Banking Act must be called into question if they can lend against assets without proper checks against those assets,' Mr Shaw said.
Credit Suisse is not the worst offender in money terms. The Swiss banking giant holds around pounds 58m of investments, while Lehman has pounds 86m and BNP pounds 33m.
National Westminster Bank, which was found to be holding nearly pounds 30m of shares in Israeli company Teva Pharmaceutical which belonged to the pension funds, has given those assets back.
The select committee, chaired by Frank Field, the Labour MP, has taken exception to a letter from Credit Suisse to one of the accountants placed in charge of the search for missing funds, in which the bank appears to accept that the assets were taken from the pension funds but to add that it did not know the assets were stolen when it took possession of them.
Credit Suisse has strongly resisted attempts to force it to return the pensioners' assets. It is currently defending a legal action from the trustees of the Mirror Group Newspapers pension fund for return of assets which they say belong to the fund.
The committee's report also attacks the legal system for holding up the process by which the ownership of assets is determined.
The report does not go as far as Lord Goodman, the eminent lawyer, who recommended that the Government take responsibility for all the tracing of assets.
However, it says that pressure should be put on trustees, accountants and banks to allow Sir John Cuckney, the chairman of Royal Insurance who was placed in charge of raising money from the City to help pensioners, to sort out their problems rather than going to the courts.Reuse content