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Wait for Knight Williams investors

Elderly investors with the retirement firm Knight Williams will have to wait until the firm appoints its own liquidator before their cases can be referred to the Investors Compensation Scheme.

Even then, they may find themselves in a queue behind other creditors, such as the Inland Revenue and the 250 staff being made redundant from KW following the weekend announcement that the company was going into voluntarily liquidation. Director Robin Knight Bruce yesterday refused to comment on when a liquidator would be appointed but as KW voluntarily declared itself in liquidation, the Investors Compensation Scheme is powerless to act until a liquidator proves that losses cannot be met.

The move follows the sale of KW's investment funds to Singer & Friedlander in April for pounds 17m, but under the terms of the deal KW remains responsible for any liabilities to investors.

The Securities and Investment Board has already received more than 400 complaints alleging that KB, as an independent financial adviser, had given bad or misleading advice.

Allegations of "churning", where investors were persuaded to move funds into KW managed funds, re-generating commission fees, have also been made.

The SIB stepped in when arbitration between KW and investors generated yet more complaints but not one investor who complained to the SIB has yet received a penny in compensation.

A spokesman for the SIB said a decision was made to investigate all complaints before compensation was awarded to the complainants in order to ensure a "fair and equitable" distribution of any money.

Investors who have already had their complaints against the company settled by arbitration will not be able to seek more compensation through the ICS as arbitration awards are legally binding.