Aberdeen Asset Management Welcomes Splits Deal

by Robin Pilgrim, LawAndTax-News.com, London

10 January 2005

It emerged on Thursday that the firm at the centre of the split capital debacle in the UK, Aberdeen Asset Management, is facing a £7 million bill for legal and other costs, in addition to its share of the deal recently reached to compensate those affected by the 2002 collapse of several of the risky investment trusts.

The £194 million compensation plan was agreed upon late last year by the firms involved in the collapse, in conjunction with the UK's Financial Services Authority and the Jersey Financial Services Commission.

Speaking to The Herald news service last week, Aberdeen's chief executive, Martin Gilbert welcomed the conclusion of the matter, explaining that:

"It's a big relief to get it done. Hopefully we can move forward from here."

Mr Gilbert went on to announce that the fund management firm has put aside £78 million to compensate investors who lost money when the split caps collapsed, meaning that it should be able to cover the overall bill of £85 million from its existing facilities. However, he hinted that the firm may need to issue a convertible bond to cover future funding.

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