Select Committee on Treasury Minutes of Evidence

Examination of Witnesses (Questions 1 - 19)




  1. Good morning, Mr Gilbert. For the sake of the shorthand writer could you identify yourselves, please?
  (Mr Gilbert) I am Martin Gilbert, Chief Executive of Aberdeen Asset Management.

  (Mr Marshall) I am Gary Marshall, Managing Director of Aberdeen Unit Trust Managers, which is the Group's retail division.

  (Mr Currie) I am Piers Currie, Marketing Director of Investment Trusts at Aberdeen.

  2. Good morning. Could you tell me who is the Executive Director responsible for each of your funds?
  (Mr Gilbert) The structure of the company is I am the Chief Executive and Chris Fishwick is the Executive Director responsible globally for our closed end funds as we call them, or investment trusts as they call them in this country. He has overall responsibility for them. Then what happens is each individual fund or each individual company has its own investment remit, so the investment management of that part of the portfolio would be delegated to a particular fund manager within the fund management division.

  3. If he is in overall control can I ask why he is not here this morning?
  (Mr Gilbert) Two reasons. One, I was asked to come and, two—

  Mr Fallon: By whom?


  4. Our Clerk wrote to yourselves asking for witnesses to come but there was no specific request. We would have liked to have seen Mr Fishwick. Can you tell me why he is not here?
  (Mr Gilbert) He is attending a number of meetings today with some of our funds because, as you are probably aware, the markets are in a very, very bad condition at the moment and we have a number of funds that are in difficulty and he is dealing with those today. I apologise. If you had wanted him here specifically we would have rearranged things and brought him here but I thought it would be adequate to bring the two gentlemen I have brought.

  5. I must say that my colleagues are a bit disappointed that he is not here. Could you tell me on how many boards Chris Fishwick sits?
  (Mr Gilbert) He sits on ten boards. I think we should elaborate that he does not sit on a board as an independent non-executive director, he sits on the board as a non-independent director. All our boards tend to have a management representative on each board.

  6. Okay. Could I ask did he earn salary and benefits of £1.8 million in the year to September 2001?
  (Mr Gilbert) Yes, that is correct.

  7. And salary and benefits of £1.734 million in the previous year to September 2000?
  (Mr Gilbert) That is correct.

  8. Did he officially exercise stock options worth approximately £2.3 million in the year to September 2001?
  (Mr Gilbert) I think he exercised the stock options but he held on to the stock so I suspect of that £2.3 million he would have probably lost about £2 million of it.[9]

  9. Has he been promised an additional £1.4 million deferred benefit if he remains in Aberdeen's employment to 30 September 2002?
  (Mr Gilbert) I think that is correct.

  10. Is he the highest paid employee of Aberdeen Asset Management plc?
  (Mr Gilbert) Yes, he is.

  11. Therefore, can you understand, Mr Gilbert, why thousands of Aberdeen investors around the country who have lost much of their life savings feel angry when they see the director responsible receiving or being promised over £7 million in a two year period during which the trusts he was managing have collapsed almost totally in value?
  (Mr Gilbert) I do see your point.

  12. Thank you.
  (Mr Gilbert) But there are a number of other points, if you would not mind me making them. He is in charge of, as we call it, the closed end fund division of Aberdeen which ranges from Sydney right through to the US. It is one of our most successful divisions. It has contributed over the last ten years substantial profits to the group and he has been a very, very good profit generator for the group. Those particular trusts that you were speaking about for the three years before the last two were the best performing investment trusts in the UK.

  13. John Tiner of the Financial Services Authority is quoted as recently saying "If you have a director of the board of a series of trusts", and you mentioned Mr Fishwick is on ten, "it must be difficult to manage the conflict of interest that would emerge". Would you agree with that statement?
  (Mr Gilbert) I do not agree with that statement. He is not holding himself out to be independent on those boards, he is non-independent. He is the senior representative from Aberdeen management on those boards.

  14. Lastly, a quote from Mr Tiner again in May of this year when he said "Some splits borrowed heavily to invest and buy securities in each other in a contagious cocktail". Would you call it a contagious cocktail or a Molotov cocktail?
  (Mr Gilbert) Much as I hate to disagree with the regulator, which is a very dangerous thing to do, I do disagree with his comments.

  Chairman: We have the regulator later in the morning so we will certainly be asking those specific points.

Mr Plaskitt

  15. Can I ask what position Ms Shelley O'Donnell has with Aberdeen Asset Management now or recently?
  (Mr Currie) Shelley O'Donnell works with me on investment trust sales and investor relations.

  16. Is she the head of investment trust sales?
  (Mr Currie) Yes.

  17. Do you recall an article that she wrote in July 2001 in Investment Adviser where she was commenting on the likely performance of zero dividend preference shares?
  (Mr Currie) There are a lot of articles on zero dividend preference shares.

  18. Do you recall hers?
  (Mr Currie) Not specifically, but if you remind me I will try to clarify it.

  19. In it she describes the zero dividend preference shares as low risk.
  (Mr Currie) I think that is very true.

9   Ev 71. Back

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