SKIN FLINT'S CITY DIARY .
hat latterday chain letter, the holding com- pany, changes its name to conglomerate and now in turn to investment trust or even banker. Without a theme, like Sir Winston Churchill's favourite pudding, they stumble on suffering from a self-inflicted financial marasmus through capitalising charges, under investing, and overpaying dividends tand taxes). The new crutch they have come upon is the spawning of unit trust manage- ment companies, ostensibly to produce income. for tite parent but, more hard- headedly, to provide deployable funds for buying what they call strategic holdings in takeover prospects eyed by the predatory parent. Amazingly enough, it is within the law for a unit trust to support its parent at critical times, during a bid, or for balance sheet dressing at the end of the financial year, by buying its parent's shares. Unit trusts are also handy for 'stuffing' new shares used by the parent. or holding com- pany. Old city hands might have used the familiar euphemism 'placing' instead of 'stuffing'. In the United States unit trusts, or mutuals, as they call them there, controlled by a conglomerate or industrial parent com- pany have long been frowned on and called captive trusts.
Previous page
