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AMP bill for Towry Law reaches £135m

AMP has splashed out a total of £135m on integrating and keeping its Towry Law subsidiary afloat last year.

Figures revealed by leading industry analyst Ned Cazalet&#39s Life 2002 reveal that AMP has dipped into its ailing Pearl with-profits fund to the tune of another £30m to fund the integration on top of its £75m purchase costs last year and around £30m set aside for pension misselling.

AMP UK managing director Tom Fraser accepts that the company&#39s UK purchasing strategy using the Pearl fund has contributed to the life fund&#39s current capital difficulties but he claims the investment was worthwhile and that both Towry and Henderson now worth more than what AMP paid for them.

Concerns over Pearl&#39s with-profits fund led to AMP group chief executive Paul Batchelor quitting two weeks ago and chairman Stan Wallis is also due to step down over the affair while chief finance officer Marc de Cure resigned last month.

FSA chairman Sir Howard Davies broke usual protocol to talk about Pearl on Australian TV last weekend, disclosing that he had known about the capital troubles of Pearl for some time but was confident that it would work its capital position through in a satisfactory way.

In a statement issued last week, AMP&#39s new chief executive officer Andrew Mohl said: “With hindsight, we would not have invested as much capital in the UK as we have. Right now, we are committed to fixing the problems, not looking for an exit. I am currently reviewing the UKFS strategy and the speed and timing of its implementation.”

He has also said AMP has half its capital invested in the UKFS and the returns for the risk are not good enough.

Torquil Clark managing director Don Clark says: “If any business needed a £30m injection to keep it afloat I would question if it was worth buying. We all know AMP bought a pensions black hole when they bought Towry.”

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