UK - AstraZeneca has dropped plans to sue Merrill Lynch Investment Managers over poor investment performance for its pension fund.
A spokesman for the pharmaceutical giant said the decision was made following advice from both its internal and external counsel. No other details were disclosed.
However, MLIM, which made an out-of-court settlement with the Unilever Pension Fund in December 2001 over claims of poor performance, still faces possible action from the Co-operative Group’s £2bn CWS Pension Fund.
A Co-op spokesman said that while it is looking to resolve its dispute with MLIM “amicably”, it is still considering action over its “dissatisfaction” with the fund manager’s performance.
Additionally, the Surrey County Council and Carlco’s schemes are said to be considering action.
Since the time of the MLIM court case with Unilever, the fund manager has restructured its investment team and embarked upon a cost-cutting programme, which boosted its pre-tax operating margin from 6% in 2001 to 22.5% by the end of last year.
As a result, ratings agency Fitch-AMR believes that MLIM has turned the corner and has removed the company from its watch list and awarded it a double-A rating, its second highest award.
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Malcolm Mclean says getting the channels of communication right and engaging more openly is a good starting point