Select Committee on Treasury Minutes of Evidence

Examination of Witnesses(Questions 400-419)



  400. But the question I am asking is quite a simple question, Mr Currie. Did you market some of your splits as low risk?

  (Mr Currie) We marketed[7]—

  401. Exactly, which you said you did not do before.

  (Mr Currie) We marketed the share plan in which all participating shares of closed end funds managed by Aberdeen are there. We have never hidden that. That is not undisclosed.[8]

  402. Mr Fishwick, did you jump or were you pushed? And it is lovely to see you!

  (Mr Fishwick) I am delighted to be here actually, to be honest with you. Did I jump or was I pushed? It became quite clear to me that it was not benefiting Aberdeen Asset Management being there any longer with the constant press scrutiny, looking for a scapegoat to be driven out. Actually I went to Martin and said to him, "This is not in our shareholders' interest, it is not in my colleagues' interest and it is not in mine or my family's interest. Let's come to some kind of compromise agreement to part ways". Martin tried to persuade me to stay and I said, "Look, at the end of the day I just do not think it is right for the company or my family. The press will hound us until they get a result, rather like they hound ministers", and I said, "We might as well give them what they want. I want to get on with my life. I am very happy to stay and help out"—

  403. So you resigned?

  (Mr Fishwick) It was a compromise agreement between us both, yes.

  404. So if you resigned, why did you get £350,000?

  (Mr Gilbert) No, Chris did not resign. He approached us. I tried to persuade him to stay and he said, "Look, it's really the best thing for the company if I go", and the Board agreed with that assessment and reached

  405. So he resigned?

  (Mr Gilbert) No, he did not resign.

  406. So he was pushed?

  (Mr Fishwick) A bit of both.
  (Mr Gilbert) He resigned and he was pushed, a mutual agreement.

  407. Okay. You went with £350,000, but you also went with £1.4 million, did you not, because if you stayed on until 30 September, you would get that extra £1.4 million, so why did you not go at the 30 August and put that £1 million back into Aberdeen and help the people who have lost their money?

  (Mr Fishwick) Why did I not go on the 30 August?

  408. And save the £1.4 million.

  (Mr Fishwick) It is no different from why I did not go at Christmas last year. It makes no difference. At the end of the day when you have got TV cameras flying over your house, and I did not seek public office, and cameras sticking through your doors, eventually it just became unbearable.

  409. Well, do you think the catastrophic performance of the funds you managed justified your level of pay?

  (Mr Fishwick) Well, my level of pay, as you are aware, is not set by myself. It is set by the independent directors of our company who meet every year. They decide what my remuneration is and they then put it to all our shareholders who vote on it every year, and I abide by that decision of what is paid. I would love to be able to pay myself, but unfortunately that is not the way it is.

  410. So we ought to be having one of your directors here to give us a glowing report on Chris Fishwick which said, "Look, we think he is worth several million pounds over two years"? We will maybe do that.

  (Mr Fishwick) I think they would do. They awarded me my remuneration and they voted in favour of it. In fact I checked this out the other day because I thought you would ask me that question and the vote in favour of our remuneration last year was 95.6 per cent in favour.

  411. This is better than Saddam Hussein!

  (Mr Fishwick) Well, some did vote against.

Mr Plaskitt

  412. Just as a quick supplementary to Mr Fishwick on whether it was push or resign, do we take it that you are getting out of the split capital business?

  (Mr Fishwick) I am getting out of the City, quite frankly, but I am prepared to work and answer questions for yourselves and the FSA for the next 18 months or as long as it is necessary. I am at the beck and call of Aberdeen to answer any questions, but yes, I am having a career direction change.

  413. Are you still on the Board of Treasury Holdings?

  (Mr Fishwick) Yes, I am on the Board of Treasury Holdings.

  414. Is it correct that Treasury Holdings is bidding to take control of Real Estate Opportunities?

  (Mr Fishwick) No, it is not correct. They are not bidding to take control of Real Estate Opportunities, no.

  415. Is it trying to get any stake in it at all?

  (Mr Fishwick) No. Treasury Holdings has a stake in the company,[9] as it has had from launch, which it is not allowed to add to under listing rules and what has actually happened is that the press have misinterpreted the story and not checked the facts. Each time the company buys in its own shares, its percentage of the company goes up because that is what is left. It is simple mathematics. It is just scaremongering. If Treasury Holdings was intending to bid for REO, it is a public company, it would have to announce it, and it has made no intentions to do so. It has always been an investor in the company from the very beginning, eight years in total.

  416. Has Treasury Holdings got any interest in split capital trusts?

  (Mr Fishwick) As a company, only its holding in REO. It has no other investments in split capital trusts.

  417. So it is true to say that through your involvement in Treasury Holdings, you will still be involved in the split capital business?

  (Mr Fishwick) Yes, I am a non-executive director of Treasury Holdings, not a shareholder, so in effect quasi, yes.

  418. Like a quasi-guarantee?

  (Mr Fishwick) No.

  419. Incidentally, what does "quasi-guarantee" mean?

  (Mr Fishwick) To me or to you?

7   Note by Witness: AITC Directors Handbook Chapter 13 Section 8-1, "A typical split will have two or three classes of share'.with the share classes ranking highest being the lowest risk, as they will be fairly well assured of receiving the pre-determined return. Those at the bottom of the list will be high risk, as they only receive what is left when the highest ranking classes of share have been satisfied". Back

8   Note by Witness: The characteristics of individual zeros available through the Aberdeen Investment Trust Share Plan are disclosed in the Plan literature, including Risk Factors in the Key feature documentation as well as quarterly fact sheets. All marketing material is approved by Compliance department and in accordance with Section 57 of the Financial Services Act 1986. Performance information and key statistics included in the documentation are updated quarterly. Plan members receive annual and interim reports of their investments as well as six monthly valuation statements. Back

9   Note by Witness: Treasury Holdings already has a substantial stake in the company. Back

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Prepared 29 January 2003