Chairman Vanni Treves says he had held “theoretical” disc-ussions but they are at an early stage and no buyer will touch the business until it has concluded its 3.75bn legal action against auditors Ernst & Young and 15 former directors. A spokesman for Resolution Life, which last year spent over 1bn acquiring closed funds from Royal & Sun All-iance and Swiss Life, confirms that the firm, run by Clive Cowdery, is monitoring the situation and will be interested once Equitable is “cleaned up”. Entrepreneur Hugh Osmond, whose Sun Capital Partners acquired HHG’s closed life businesses earlier this year, is also believed to be expressing interest. Treves says selling the with-profits business is one of three options for Equitable’s long-term future identified by an internal strategic review. The other options are to unitise the fund, which would make policies easier to transfer, or to continue the business as it is. Speaking about the court hearing, Treves says it not driven by any malice and Equitable would be ignoring its “fiduciary responsibility” to policyholders if it had not taken the action. He says he would still welcome a “substantial” settlement offer, adding that the firm’s legal costs were 8.4m last year. Treves says: “The action to pursue Ernst & Young and the directors has the overwhelming support of the society and its members and any money received will go into the with-profits fund.” Several policyholders at the AGM attacked chief executive Charles Thomson’s 1m pay package this year as ‘obscene”. The total compri- ses basic pay, benefits and bonuses but remuneration committee chairwoman Jean Wood said the package is below the median for the sector. Thomson said with-profits annuitants will see a 3.5 per cent bonus award for 2004 but warned that the value of the policies can be expected to continue falling each year.