Unilever fund chief 'ignored warnings'

Wendy Mayall, Unilever's key witness in its £130m legal dispute with Mercury Asset Management, was yesterday accused of ignoring evidence showing that the group's pension fund had gone seriously awry under Mercury's guidance.

Mrs Mayall, who is the chief investment officer of Unilever's £4bn pension fund, was quizzed about why she did not react to a report showing that the fund had performed badly more than a year before Mercury was sacked as the fund manager of £1bn of Unilever's assets.

The Flora margarine to Persil detergent group is suing Mercury, which is now owned by Merrill Lynch, after it failed to meet performance targets set up in a new contract from January 1997 and was sacked in March 1998.

Ian Glick, Mercury's QC, pointed to evidence that even before this contract was set up, Mrs Mayall was given a detailed report at a meeting with Carol Galley, Mercury's star fund manager, showing that Mercury's approach had run into problems in 1996.

Mrs Mayall, who was in the third day of giving evidence at the High Court, said she did not read the whole report. "I took it back to my office and it went on file somewhere. I wish I had had a curiosity as to what else was in the document," she said. Ms Galley was in court to hear the evidence. She is due to take the stand on Monday to defend her reputation as an investment guru.

A key plank of Unilever's argument is that Mercury did not keep it properly informed about the way it was managing the portfolio.

Mrs Mayall said in her witness statement that Ms Galley's team did not give a proper explanation for their poor performance in reports which dealt with the fund over the past nine years. Asked why she did not ask for more information, she said: "I would not have sought to argue with them [Mercury] on their views. But reverting to nine years ago is not helpful to what is happening more recently."