Lord Newby steps up pressure on Aberdeen Asset Management

Lord Newby, the Liberal Democrat Treasury spokesman, is stepping up the pressure on Aberdeen Asset Management and the Financial Ombudsman Service (FOS) to explain why investors in its Progressive Growth trust have not yet been compensated for their losses.

The peer has written to Martin Gilbert, Aberdeen's chief executive, asking why there has been no movement on Aberdeen's promise to devise an uplift to investors in the Progressive Growth trust. It was described in advertisements in 2001 as "the one-year-old that lets you sleep at night," but the fund plunged 75 per cent the following year.

Aberdeen offered an uplift to investors in the trust last year. Responding to Lord Newby's questions, Mr Gilbert said work was continuing on the uplift proposal and it was intended to come into effect in 2005. But he said he could not proceed further with the scheme until the FOS has ruled on the numerous complaints it has received from investors.

Lord Newby, however, is not convinced by Mr Gilbert's response and has now written to the FOS demanding that he clarify his position. He said: "I have been particularly concerned that Aberdeen has so far failed to put in place the uplift package for investors which they promised to do well over a year ago. Aberdeen's continuing delay in announcing the uplift package continues to cause great anxiety amongst the investors affected."

He wants to know whether it is the FOS's view that the fact it is examining cases would prevent Aberdeen announcing an uplift package. He has also asked the FOS to give an estimate of when it will have completed its work on the Aberdeen complaints. Aberdeen, however, has pointed out that the performance of the trust has much improved recently with the bounce back in the stock market. "We very much recognise the distress suffered by investors," Mr Gilbert said in his response to Lord Newby. "The uplift package is not intended as compensation. It is a goodwill gesture on our part and reflects our desire to maintain a good relationship with our customers."

Last week, Katherine Garrett-Cox, the 35-year-old star fund manager nicknamed Katherine the Great in recognition of her achievements as one of the most successful women in the investment world, quit Aberdeen to join a rival, Morley Fund Management. Mrs Garrett-Cox came to prominence at the former merchant bank Hill Samuel, where she headed the US equities desk at the age of 26.