Standard Life faces accusations of 'scaremongering' campaign

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Standard Life, fighting to avoid being forced to demutualise by Fred Woollard, the Monaco-based carpetbagger, is facing accusations of scare-mongering over its claims that policyholders will be substantially worse off if the life insurance group sheds mutual status.

Ned Cazalet, a respected independent analyst of the life insurance industry, has written to Iain Lumsden, Standard Life's finance director, accusing him of misleading policyholders by suggesting that its tax burden will go up substantially if Mr Woollard get his way.

Mr Cazalet, a former stockbroking analyst who runs his own consultancy, locked horns with NPI ahead of its demutualisation two years ago.

He says he is outraged by some claims Standard Life has made in its defence, and says he plans to publish an attack on the company this week. He takes particular issue with Mr Lumsden's claim that conversion will result in Standard Life being hit for a tax bill that will cut its value by 12 per cent, saying this ignores the fact that Standard Life already pays tax and that there are elements apart from cashflow to be taken into account in valuing the business.

He also attacked Scott Bell, Standard Life managing director, for claiming policyholders will get much less than the £6,000 in shares Mr Woollard has claimed, saying Mr Bell has deliberately used a different scheme from the one Mr Woollard is proposing.

"The whole thing about tax is nonsense," Mr Cazalet said. "I've no problem about Standard Life making a case for remaining mutual. If you've got a case put it forward. But why are they bullshitting their policyholders?

"If demutualisation was damaging to policyholders' interests, why has the Government actuary and his counterparts abroad allowed the demutualisation of Norwich Union, NPI, Scottish Widows, Scottish Mutual, Sun Life of Canada, AMP, Old Mutual, and so on, to go ahead? What makes Standard Life different?"

Dresdner RCM, the fund manager, distanced itself from suggestions that it backs Mr Woollard. Simon White of Dresdner said yesterday that the group, an investor in second-hand endowments, plans to hear both sides before it decides.