Invesco to pay Drayton pounds 6.5m
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Your support makes all the difference.INVESCO MIM, the fund manager where Lord Stevens of Ludgate recently relinquished executive responsibilities, is to pay Drayton Consolidated pounds 6.5m in recognition of malpractices in its management of the investment trust.
The controversy over Drayton, whose share price slid from 563p in January 1990 to 179p yesterday, contributed to Lord Stevens' departure.
Invesco MIM invested too much of Drayton in a single unquoted investment, Alma Holdings, the Dundee sweet maker. By the time Alma called in the receivers last February, Drayton had committed pounds 43m to the company.
Invesco MIM has also agreed to pay pounds 9.2m for investments in City Merchants Bank and East European Development Fund, which Drayton values at pounds 6.2m. The fund manager is also issuing a pounds 4m interest-free loan note to buy part of Drayton's large holding in Oak Industries, a US company.
Together with the sale of Drayton's readily realisable investments these moves will allow Drayton to repay its shareholders about 84p a share at the end of the year. The remaining illiquid investments will form a new investment trust, Second Consolidated, which is to be managed by Foreign & Colonial Ventures.
The assets to be transferred to Second Consolidated are valued at 158p a share, or pounds 54m in total.
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