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Aberdeen plans payout to head off legal action

Aberdeen Asset Management is planning to head off legal action by disgruntled investors with a payout for its split-cap zero-dividend preference share fund unitholders.

Up to 7,000 investors in the Aberdeen progressive growth unit trust lost half of their investments in less than a year in the fund that Aberdeen had described as “the one-year-old who lets you sleep at night”.

Aberdeen is refusing to discuss the terms of the rescue deal at this stage, which it describes as an uplift package rather than compensation, but it is expected to see investors get back at least their original investment. The fund firm says an announcement of the terms will be made in the next two or three weeks.

It says once the terms of the compromise agreement are finalised, it will write to investors directly and will hold meetings around the country to brief intermediaries.

In a statement to the Stock Exchange, Aberdeen said: “A number of options are being considered for the delivery of the proposal, which is that progressive growth investors will receive no less than the value of their initial investment at a specific future date.”

Investment & Trust Advisory Services director Neal Greenslade says: “The perception across the industry is that splits were marketed in a cavalier way. The question is whether this response is to pre-empt the FSA from censuring Aberdeen, which is what they should do, or is it to pre-empt a further investigation?”

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