Unilever witness says MAM had 'no excuse' for failure

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Wendy Mayall, the chief investment officer of Unilever's £4bn pension fund, was yesterday accused of unfairly representing the details of the group's deteriorating assets to its chief executive, Niall Fitzgerald.

Mrs Mayall delivered a report to Mr Fitzgerald and other senior Unilever executives at the end of 1997 in which she said that Mercury Asset Management, the pension fund's manager, could offer "no excuse" for its failure to meet performance targets.

Yet Mrs Mayall allegedly had received a lengthy explanation for the fund's under-performance at a meeting in November 1997 with Mercury's most senior fund manager, Carol Galley, and had made notes of her arguments at the time.

Ian Glick, Mercury's QC, asked: "Why was this re-written? To make it sound even more damaging to Mercury?"

In the most heated of Mrs Mayall's four days of cross examination in the High Court in London, she said: "There was quite a lot of things which I took as excuses and on-the-spot answers to difficult questions – 'you would say that wouldn't you'. I didn't feel I had to list all of their excuses in my note."

Mercury, which is now owned by Merrill Lynch, was sacked three months after the note was sent to senior Unilever personnel.

Unilever, a maker of household products, has brought a high-profile case against the once-lauded fund manager, seeking £130m of compensation for its failure to meet benchmark targets.

Mrs Mayall, Unilever's key witness, went on to launch a fresh attack on Ms Galley, an erstwhile close associate. Mrs Mayall, who is 43, said: "I remember her saying 'there is no excuse', 'there is no explanation'. Here was a manager fighting to keep an account."

Ms Galley will give her side of the story on Monday. She will have to account for the fact that £1bn of Unilever's assets underperformed an agreed index by 10.5 per cent between January 1997 and March 1998, at a time when its contract only allowed it to dip below the index by 3 per cent.

She will also have to explain why investment risks in the Unilever portfolio were not brought down to levels that Unilever deemed to be suitable for its requirements as a mature pension fund.