Capita prepares shareholders for Arch cru hit
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Capita has prepared its shareholders for the possibility that the firm will have to pay costs as a result of the Arch cru suspended funds debacle.
In a stock exchange statement today, Capita says that is continuing to work with the FSA, Arch, the depositaries to the funds as well as with and other interested parties to resolve the suspension of the funds and to provide shareholders with further information regarding the current value of the funds and their future prospects.
The funds were suspended in March this year following high redemptions at a time where the underlying assets were illiquid.
Capita says: “In our half year statement, we referred to the work we are undertaking to resolve the suspension of two Oeic investment funds for which CFM is the authorised corporate director.
“These two funds were affected by high redemptions at a time of unprecedented market illiquidity post the collapse of Lehman Brothers.
“In conjunction with the delegated investment manager, Arch Financial Products, and with the agreement of the depositaries, CFM suspended dealing in the two funds on 13 March 2009.”
It adds: “There is the possibility of investors having suffered detriment and we are also considering with the FSA and other parties what action may need to be taken to remedy any such detriment.
“Any material costs incurred by Capita in resolving this matter will be disclosed separately from the Group’s underlying profit in our accounts for the year ended 31 December 2009.”
Capita says that while most of its business is performing well and not exposed to sectors that are particularly vulnerable to the economic downturn, Capita Financial Managers, a business which administers nearly 600 funds, is continuing to suffer as a result of increased costs of IT and of the increasing burden of regulatory compliance.
Capita says it is still looking at acquisitions of small to medium sized firms in its target markets, following the ten acquisitions it has already made this year.
It has also secured 15 major outsourcing contracts this year worth a total of £1bn.
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Readers' comments (11)
Dathan Steele | 18 Nov 2009 8:02 pm
Interesting, looks like Capita ends up being the fall guy in this french farce.... let's face it, no-one comes out of this smelling of roses.
From Maguire and co, Derks and the Arch boys, Capita, BNY, FSA everyone got caught with their pants around their ankles.
I happen to know that a fair few decent IFAs and some fund managers voiced their concerns about liquidity, valuation etc to our lords and masters at the North Colonnade, but were ignored......well, until the horse had well and truly bolted...as per usual.
I also find it peculiar that a cataclysmic event like this, which could undermine collective investments in the investing public's eye has NO COMMENTS at all voiced on here. An idiot like Fisher talking about commission and there are 40 odd comments..... maybe this fact alone tell you all you need to know about the state of the industry?
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Anonymous | 19 Nov 2009 10:47 am
Just so you are aware we voiced concerns after two Due Dilligence meetings with both other local IFA contacts and also a number of fund groups as it was plain to see this was a "car crash " waiting to happen
as per usual allot of people seemed oblivious to the issues.Perhaps a "class action" from the investors will wake a few people up to the need for proper and disciplined Due dilligence
instead of just accepting the ramblings of a deluded indivdual and promises of riches for all
(as well as bottles of fine claret on each sale)
poor result will affect all but some may be mortally wounded.
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Anonymous | 27 Nov 2009 7:51 pm
I am an Arch CRU shareholder - my IFA explained in March 2009 that the fund was frozen because of potential collapse of other Capita holdings - not Arch CRU. The quality of warnings, risks and progress information has all been non-existent or incomprehensible. It smacks of a smokescreen to the financially uninitiated. My insistence on frequent reports before the freeze fell on stoney ground. I will certainly join a group action from the outset and recommend Mr Richard Snowden QC, Erskine Chambers, Lincoln's Inn.
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Anonymous | 8 Dec 2009 1:47 pm
I too am fed up with Capita blah blah --the latest "statement"runs to 16 pages and,materially,says nothing new except the Funds were seemingly 40% overvalued and it may now take 3-5 years to get some of our money back --as a Pensioner I hope I live long enough !
How can a simple Finance/Guaranteed return Fund Marketed and endorsed by Capita and the FSA as Low Risk go so bad ?
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Lee Thompson | 12 Dec 2009 2:51 pm
Like a lot of other investors, I'm concerned that there is no organised group to represent those affected. The IFA's have begun to organise under one collective legal banner, no doubt looking to minimise their future losses.
At the moment we are only individuals & are certain to be the forgotten victims if that continues, we must have a voice or we will be swept under the carpet.
I'm looking for help to try & set up a group, to demand answers & hopefully some redress.
lee.thompson@yahoo.co.uk
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ian cook | 7 Jan 2010 12:42 pm
Having parted from my financial advisor before the Arch Cru shares were suspended and not having enough faith to employ another I too would be interested in any group action that is being organised.
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Anonymous | 29 Jan 2010 2:56 pm
I am a 71 year old widow and I invested in the Arch Cru nearl 2 years ago. I have been very frustrated by the lack of correspondence prior to and after the suspension. With massive funds losing so much in a small space of time and total lack of responsibility or action from my IFA I have filed a complaint with the financial ombardsman.
They have acknowledged and I now await further details and action.
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Anonymous | 2 Mar 2010 11:09 pm
My £7,000 ISA of hard earned money invested in the Arch Cru fund nearly 2 years ago was today valued at £161.00. Justice needed? I think so! Maybe Chris Addenbrooke may like to give up his bonuses over the next few years and contribute towards those who have lost everything?
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Anonymous | 6 Mar 2010 6:15 pm
On the advice of my IFA, I invested in the region of £9k into the Arch Cru fund as I was advised that it was a pretty safe bet, blah, blah, blah...
11 Months on from the ISA being suspended and not being able to access my money, and with minimal communication..blah, blah,blah.. I have this week received another 10 - odd pages of meaningless waffle from Capita ultimately saying that I can look forward to an imminent payment of £208.04.
Imagine my feelings about this.
What I fail to understand is, that if the fund is worth 40% less than its value when I invested, then why cant I have 60% of my money back and call it a day ? - under the circumstances this, although not ideal, would be preferable than waiting on sporadic payments of relatively paltry amounts over the next 5 years..?
Whilst I understand that investments can go up as well as down, I had no idea that that my money could legally be withheld while the investment managers decided their best course of action "in the interests of investors"...
My IFA failed to mention that this could happen in his advice, and had he done so, then I probably wouldnt have invested - who would ?
Has anyone actually claimed against their IFA in this situation, successfully or otherwise ?
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Anonymous | 13 Mar 2010 4:05 pm
For the1st time in our lives, my husband and I were blessed with "unearned income" - as in an inheritance from my Mother. Both OAP's, we thought that we would "carefully" invest it in "low risk" investments to increase our only income of DWP pensions!!! With the advice of our IFA of 25 yrs, took out investment with Arch Cru - the rest is history!! What we were sold was certainly not what CRU invested in afterwards - with so many risks involved - and in such a short time the money disappeared! What can we do?? £40,000 invested and only a payment of £409 received back - with the promise of a further £536 awaited - with anticipation! Who can we turn to for help and advice? These dealings were certainly NOT those advertised in their original brochure containing the application forms!!!
Has anyone in the same position found anyone to advise/help them?
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