Firms cry poor in split capital row

COMPENSATION for 50,000 investors who lost money on split capital investment trusts appeared further away last week after it emerged that four firms had declined to contribute any funds.

It is believed that BC Asset Management and broker BFS claim that they do not have the money, while Teather & Greenwood and Royal London Mutual have refused - saying they did nothing wrong.

Other firms are unwilling to contribute funds if they will be used to compensate the four firms' clients. One said: 'Why should I bump up my contribution to cover their shortfall, when it doesn't benefit my clients?'

BC's claim has been weakened, however, after it emerged that managing director David Bruce last week made a profit of £25m when BC Property Income & Growth, in which he is a major shareholder, sold split capital shares bought for rock bottom prices.

One banker said: 'It is a disgrace that BC claims it cannot pay when Bruce has personally made such a huge amount of money. I would expect that the FSA will not allow him to get away with it.'