The Sunday Times featured our UKSA letter to the FCA yesterday.
Just days before the deadline for 1.2 million policy members of the mutual insurer to vote on the controversial deal, concerns were raised with Charles Randell, chairman of the Financial Conduct Authority.
The UK Shareholders’ Association wrote to Randell to query a description of the “with-profits” fund that, in effect, owns the insurer and is backed by policyholders as being “ring-fenced”.
The lobby group fears that the fund could be used to prop up the business if the Bain-owned business ran into financial difficulty.
Our letter coincided with a letter in similar vein sent by solicitors Leigh Day on behalf of some LV members, urging the FCA to withdraw its non-objection to the acquisition by Bain Capital and postpone the vote until it addresses a series of issues. The Mail reports:
They [the members] claim the process has been defined by a ‘material lack of procedural fairness’ and accuse bosses of providing ‘incomplete and/or contradictory information’ about the £530million takeover by Bain Capital. …’This is a deeply unsatisfactory situation which the FCA has allowed to take place and is unfair to the members of LV,’ the letter states.
The Leigh Day letter outlines a number of concerns, including the question whether the with-profits fund is really ‘ringfenced’.