Tenet has set aside a total of £4.5m to cover the cost of compensating investors under the Arch cru redress scheme and its settlement with the Financial Services Compensation Scheme over recommending Keydata products.
The company has not provided a breakdown of how much of the provision relates to Arch cru and how much concerns Keydata, but says Arch cru represents the “larger part” of the money it has set aside in its annual accounts for the year to 30 September 2012.
Speaking to Money Marketing, Tenet group finance director Caroline Bradley says: “Tenet has made an exceptional provision in its annual accounts of £4.5m. While we have £24.4m of cash held on the balance sheet, for us this is a significant provision for a group of our size.”
She says the different provisions for Arch cru and Keydata reflect the group’s different approach to the investments.
Bradley says: “We gave very restricted approval to a handful of appointed representatives for Arch cru, whereas Keydata was not generally approved by us. However, a handful of ARs did conduct limited business.”
Tenet is not expecting to set aside more money in future in relation to Arch cru and Keydata, saying it believes its current provision is “sufficient”.
Tenet’s full report and accounts will be available next month after shareholders have seen them at the company’s annual general meeting at the end of June.
Plan Money director Peter Chadborn says: “It will be interesting to see how Tenet’s provision sits with the undisclosed amounts set aside by other networks.
“I would question whether more than a ‘handful’ of ARs recommended Arch cru and Keydata given that £4.5m has been set aside.”