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BBB wants full hearing to contest capital ruling

Group suspends share trading and believes tribunal will lead to a hearing in the new year

Berkeley Berry Birch wants a full hearing into its 11m capital- adequacy deficit to overturn the FSA’s decision to cancel the permissions of its three regulated advisory businesses.

The group suspended trading in its shares last week pending clarification of its financial position and referred the FSA’s decision in April to cancel its permissions to the financial services and markets tribunal.

The tribunal ends this week and BBB believes it will proceed to a full hearing in the new year. If the regulator’s decision is upheld, the adviser business, which has 700 RIs, could lose permission from the FSA to act as an IFA.

BBB says the FSA is not satisfied with its plans to plug the capital-adequacy defi- cit, which include disposals and an equity fundraising, although the firm says plans are well advanced, with ann-ouncements due by the end of the year.

The firm says the sale of any of the businesses in their ent-irety is not in the best interests of shareholders.

Cliff Lockyer has stepped down as chairman but remains on the board as group enterprise director, with senior independent director John Joyce appointed non-executive chairman. Andrew Shortis, a corporate turn-round specialist, has been appointed group managing director.

BBB non-executive director Jonathan Hall says: “The board has taken swift action to address these issues by suspending share trading. We are hoping the tribunal will result in a full hearing sometime in the new year so we can look forward to 2006 with confidence.”

The FSA is also investigating breaches of client money rules in the group’s Berry Birch & Noble Financial Planning division, citing a lack of appropriate systems and controls in place and the speed at which these breaches were communicated to the regulator.

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