Royal Bank (RBS), trustee of Morgan Grenfell's Europa fund since January 1996 and its European growth fund since May 1996, was fined pounds 290,000 and ordered to pay Imro's costs of pounds 143,400.
General Accident (GA), trustee of the two funds prior to the appointment of RBS, was fined pounds 120,000 and ordered to pay costs of pounds 247,400.
Imro said GA's fine was the lighter of the two because it "proactively monitored the funds, but did not follow up explanations given [by Morgan Grenfell] on a timely basis". RBS was not proactive in its monitoring of the funds, Imro said.
Richard Whitaker, GA company secretary, said: "We are disappointed that General Accident has been judged as failing in four instances in its duty as trustee. As can be seen by the length of time it has taken Imro to deal with this, the matters are highly complex. In this context, General Accident believes that, overall, it discharged its trustee duties both diligently and competently."
RBS, whose fine related to two charges, pointed out it had been trustee for only a short time before irregularities came to light. It added that, upon discovery of the irregularities, it took "immediate action".
Peter Young was suspended from Morgan Grenfell Asset Management (MGAM) in 1996 after the discovery of alleged "serious irregularities" in three of his funds. Five MGAM executives were subsequently dismissed, and, in April last year, Imro fined MGAM pounds 2m and ordered it to pay another pounds 1m in costs. Deutsche has spent more than pounds 200m compensating investors.
Four of the five former MGAM executives - Graham Kane, Michael Wheatley, Glynn Owen and Paul Ebling - were directly above Mr Young in the command chain. The two executives nominally next up - Charles Benson and Mike Bullock - were exonerated and remain with the company. Keith Percy, then chief executive of MGAM, was the fifth director to be dismissed.
A number of the five are understood to be close to reaching, or to have already reached, settlements with Imro.
The five former executives - with the possible exception of Keith Percy because he has substantial personal wealth- are though unlikely to contest Imro's findings at tribunal due to fears they could each be landed with legal bills exceeding pounds 500,000.
Deutsche Bank, MGAM's parent has, to date, footed the legal bill for its former employees. Its support is thought unlikely to continue were they to go to a tribunal.
Outlook, page 25Reuse content