Darwin's law?
FRAMLINGTON is the unit trust com- pany which looked after the savings of 100,000 people and a year and a half ago was sold over their heads. Now events are justifying the former chairman, Philip Dar- win, who called on the Department of Trade and Industry for an inquiry into the takeover by Throgmorton Trust before letting it through — which would have held the line and allowed the unitholders' in- terest to .be considered by an impartial observer. His fears are borne out because the team to whose management Framling- ton's savers had entrusted some £1.5 bil- lion of their money has been broken up. Mr Darwin's successor, Bill Stuttaford, who thought it his duty to the savers to stay on as chairman, has given notice to resign. Anthony Milford has left the board, Pat- rick Evershed has been pushed out, Tim Miller left immediately after the takeover. None of them welcomed Throgmorton's bid, though the Framlington board had in the end no choice but to recommend it to the company's shareholders. The savers were not consulted, or, until all was over, informed. Investors in Framlington unit trusts could if they chose take their money out, but would suffer tax penalties and other costs. Holders of pension arrange- ments whose value was linked to the price of Framlington units found themselves locked in. At such moments they might reasonably have looked to our elaborate apparatus of investor protection and asked who was supposed to be watching their interests. The answer (as City and Sub- urban pointed out at the time) was: no- body. The trustees of the Framlington trusts, Lloyds Bank trustee department, had nothing to say and no plans to inter- vene. Lautro, the regulatory organisation for unit trusts, was not concerned — it would only have been interested in the
misdemeanours of salesmen. The Secur- ities and Investments Board, the Invest- ment Management Regulatory Organisa- tion, the Office of Fair Trading and the Department of Trade and Industry all stayed mum. The irony is that the DTI has now ordered an inquiry which concerns Robert Seabrook, who was Throgmorton's chief executive until he resigned last month, pleading ill health. This inquiry is not into Throgmorton but into the unre- lated mater of Mr Seabrook's share deal- ings in Acatos 8z Hutcheson, of which he is a director.
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