UK - Surrey County Council has put possible action against Merrill Lynch on hold because not all the scheme trustees turned up for their regular quarterly meeting.
The council is one of a number of schemes considering action against Merrill Lynch Investment Managers (MLIM) in the wake of the fund manager’s out-of-court settlement with Unilever. The deal is thought to have cost MLIM around £70m.
But, possible action by Surrey has been delayed because not all trustees – including chairman of trustees and council leader Nick Skellett – attended last Friday’s quarterly meeting, the first since the Unilever wrangle was resolved.
Those who did attend decided not to discuss a matter of such importance until all were available. This means any potential action may not be discussed even at the next meeting in three months’ time.
A spokeswoman from Surrey County Council pointed out that trustees have got 18 months to take any legal action and are at present “keeping their options open as they continue to consider their position”.
ProTrust executive director Norman Braithwaite said that it is a decision that all trustees would want to contribute to because of its magnitude. He added: “If Surrey has independent trustees, this would probably help the decision-making process.
“The independents, because they are completely independent from the exercise, would be able to make a more rational judgement. It is a situation where an independent would be of good value, particularly on the investment side.”
He also said that although independent trustees tend to turn up to meetings more than company trustees, those from councils have a good record at attending.
Other companies investigating possible legal action against MLIM include:
• J. Sainsbury which is understood to be seeking an out of court settlement.
• AstraZeneca which is expected to come to a decision after trustees meet next month.
• Carclo which is still reviewing its options.
By Paul Sanderson
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