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Equitable quiz for former directors

The net appears to be closing in on former directors and auditors of Equitable Life, with Equitable&#39s new board taking the first steps towards legal action for redress.

Herbert Smith has been investigating events leading up to the society&#39s financial crisis on behalf of Equitable Life&#39s new board and examining the conduct of previous boards, auditors, advisers and regulators.

The lawyers are now writing to 20 former directors, including three former chief executives, to seek explanation on a number of issues of concern.

Former auditor Ernst & Young is also receiving a letter after a report by PricewaterhouseCoopers raised serious concerns.

Those involved have until January to respond to the complaints. If Equitable does not receive satisfactory explanations, it will start legal proceedings.

The recipients include former chief executive and appointed actuary Chris Headdon who is already at the centre of an FSA investigation over Equitable&#39s reinsurance deal, former chief executive Alan Nash, former chairman John Sclater, and former managing director Roy Ranson.

Other notables include former New Millennium Experience Company chief executive Jenny Page, Manchester United chairman Roland Smith and Schroders chairman Peter Sedgwick.

The FSA is not off the hook yet and could face further investigation by Equit-able&#39s lawyers but the life office is waiting for the findings of the inquiry by Lord Penrose before taking the matter further.

Herbert Smith is also approaching Equitable&#39s former legal advisers Denton Wilde Sapte, seeking explanation of particular aspects of its advice.

Policyholders are this week receiving the compromise scheme documents and voting papers, with policyholder meetings set to take place in January.

Chief executive Charles Thomson says: “If we do not receive satisfactory explanations and if it is cost-effective to do so, we will commence legal proceedings.”

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Norman Digance

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