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Dragging heels on Keydata

Advisers are concerned that administrator PricewaterhouseCoopers is dragging its heels on the processing of some Keydata income payments due to its tunnel vision on the sale of the business.

At the end of last week clients invested in the Keydata extra income plan 21 were still waiting for their income payments to be released days after they were due.

Income due to be released on June 5 would have typically needed five working days to be processed by Keydata before being paid around the date of June 12 but these payments had still not been released to clients.

In an update on June 18 on the status of income payments PwC said: “The processing of income on KIS products remains suspended while the administrators continue their examination of KIS’s operations and consider a sale of the business.

“The processing of income has resumed for products where KIS is purely administering the contract on behalf of a third party.”

A day earlier a PwC spokeswoman said: “We said in one of our statements last week that we were beginning to process again but there were going to be delays in income payments. We are working as hard as we can to get everything moving again but there is going to be a bit of delay and I don’t know how long it is.”

But Lowes Financial Management managing director Ian Lowes said he was told investors awaiting income payments for the Keydata extra income plan 21 were not “a priority” but a sale of the business was.

Last Tuesday PwC said it had shortlisted firms in the race for Keydata business to “a handful”.

Today it said a completed sale had been expected at the end of last week but there had been a slight lag and it was still talking to interested parties and was looking to provide a further update this week.

According to Lowes, the money has been paid by the relevant institutions and most of Keydata’s income contracts, bar the secured income bonds, do not have a question mark over them and therefore should be processed.

He says: “They have put a hold on the process but have failed to communicate this properly and left elderly people who are reliant on that income in the dark.

“On the day the administration was announced there was no indication of a suspension of income payments for KIS plans to advisers other than perhaps a day or two. What happens to treating customers fairly? Does that go out the window? Being an administrator is not just about selling the company, it is about running the company.”

Speaking today, a PwC spokeswoman says: “We have our insolvency experts concentrating on keeping the business running but we have our corporate finance team concentrating on the sale of the business so we can do both as we can pull in people from across the firm to help.

“The sale is important because that will give some real security and finality but both functions are equally as important.”

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There are 4 comments at the moment, we would love to hear your opinion too.

  1. Julian Stevens 22nd June 2009 at 5:19 pm

    Dragging heels on Keydata
    I am sympathetic to investors awaiting their income payments, but PWC have a huge task on their hands and have to balance getting pipeline business processed with getting KeyData itself, as a business, on a sound financial footing for the future. It can’t all be made to happen in the space of just a few weeks.

  2. FSA are not fit for purpose
    I invested £100000 over a month ago since then I have not heard a thing. The FSA put the investment I have into immediate jeopardy with all my rights suspended whilst they put in their Accountants. No principle of treating fairly existing policyholders or the immediate need to continue to pay people the incomes they require. Also the Statutory notice sent in by me has not been actioned. How can a Regulatory Authority be allowed to act in this way. Absolutely no consideration for existing investors.

  3. Keydata
    I have a pension fund with Keydata. As I understand the situation Keydata were put into administration by HMRC and/or the FSA because of unpaid taxes and that client’s funds are ring fenced. Prior to HMRC/FSA taking this heavy handed action with typically no consideration for the effects of doing so on investor’s income the systems were in place to pay the income so if funds are ring fenced why is it necessary to discontinue income payments at all. The systems are there to enable payments to be made and the money belongs to fundholderswho should be the prime consideration in these circumstances but, as usual, where any Government body is involved appear to be at the end of the queue whilst these bodies ensure that they get there share out first.

  4. Not a bank account
    I think Julian has explained it well. Whilst I am annoyed at the handling of the issue by the FSA and the lack of facts/information initially and continuing from all parties concerned i.e. the FSA, PWC and Keydata itself it is important to remember these are NOT No Risk bank/building society deposits, they are complicated structured investment products. I have several clients with these, but don’t have any where the % of their savings in them and the income they generate should be significantly effected by a payment delay of a month or so. I feel sorry for anon with their 100k invested as it is annoying that their £600 per month income is going to be late, however if they were advised, then the adviser would have allowed sufficient liquid capital to meet any short term delays plus emergency monies which could be leant on pending the issue being resolved. If totally reliant on the income, then this is completely the wrong product to have and why contracts like the recently removed 54Life from AEGON Scot Eq, being insurance based may have been more appropriate even if with a lower income guararantee.

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