A group of MPs will continue to push for an investigation into the collapse of Arch cru despite the Prime Minister’s refusal to launch an independent inquiry, according to the group’s co-chair Tom Greatrex .
In November, All-party parliamentary group on Arch cru co-chair and Labour MP Tom Greatrex (pictured) asked David Cameron whether he would back an inquiry. Cameron admitted constituents of his had been affected and agreed to look “very carefully” at Greatrex’s request. He has since written to Greatrex saying the Government has yet to be persuaded an inquiry is appropriate.
Speaking to Money Marketing, Greatrex says Cameron’s constituents will be as disappointed as anyone and that the All Party Parliamentary Group will continue to press for the investigation and a better compensation for investors.
He says: “The PM made clear he had constituents affected by this, they will be as disappointed anyone else that the hopeful words seem to have been dashed. We keep hearing of new cases and getting more evidence something went seriously wrong so just because we had a disappointing holding answer we will not give up.”
Cameron’s letter confirms that under the Financial Services and Markets Act the Government does have the power to force an independent inquiry when it appears there has been a regulatory failure, adding that the case for that has yet to be made. The FSA is currently running its own investigation into what happened, targeting advisers who recommended the products to clients.
It says: “It was the FSA, as part of its routine ARROW inspection of Capital Financial Managers, that identified the issues with Arch cru, after which it moved swiftly, resulting in the suspension of the funds.”
Greatrex says that based on the information the group has now it is impossible to exactly pin the blame on any of the parties involved, but he says he does not rule out regulatory failure.
He says: “In crude terms Capita Financial Managers had a job to do in assuring investors of the risks, the FSA had a job to do in regulating Capita Financial Managers. Somewhere along that chain something went very badly wrong, suggesting there is a failure among those organisations, if there had not been we would not be here.
“The APPG will keep on at this until we are in a position where the Government realises this inquiry has to happen and feels it can order it. We must find out what went wrong and make sure it does not happen again.”