Palmer prepared to step down

JOE PALMER, the beleaguered chairman of the Personal Investment Authority, yesterday said he would be prepared to stand down if he seriously felt that the new regulator would be better off without him.

Mr Palmer also admitted that he saw and discussed a key Legal & General memorandum only a few weeks before he denied any knowledge of it to the Treasury select committee.

Mr Palmer has apologised for 'inadvertently misleading' MPs in his evidence to the committee last week. The former chief executive of Legal & General was asked about the 1990 memo, which details widespread breaches of investor protection rules at the insurer.

The admission about his inaccurate evidence this week provoked a furious attack on his competence and suitability by Brian Sedgemore, a Labour member of the Treasury committee.

Yesterday, Mr Palmer said he had seen the Legal & General memo at around the time it was the subject of a Commons Early Day Motion, which was in mid-March. He said he had spoken about it to David Prosser, his successor as chief executive at L&G.

Yet in his appearance before the Treasury committee last week, Mr Palmer said he had not seen it and had not asked Legal & General about it. The following day, he wrote an apology, saying he was wrong.

Mr Palmer accepted that it was hard to understand how he could have forgotten about the memo so shortly after discussing it with Mr Prosser. 'I did not recognise it when it was put in front of me without notice,' he said. 'I'm afraid I made a mistake. I was under a lot of pressure.'

Mr Palmer said he had considered his position: 'If I seriously felt that I was more use to the PIA standing down than staying, then I would certainly come to that decision.'

He said he had not discussed his position with Andrew Large, chairman of the Securities and Investments Board, the senior financial regulator.

'I do not think that the things that have happened disqualify me,' Mr Palmer said. 'I have achieved quite a lot since I became chairman. We are making good progress.'

Mr Palmer's suitability has been continually questioned since February when Legal & General was fined pounds 180,000 for failings that began when he was in charge. Independent financial advisers at a conference in Telford, Shropshire, where Mr Palmer spoke yesterday, called for his resignation.

Colette Bowe, the PIA's chief executive, said Mr Palmer enjoyed the confidence of the regulator's board.