I don't trust Investec: fund chief

A SENIOR City fund manager has said he does not trust Investec Henderson Crosthwaite - only days before its South African parent bank is due to start its campaign for a listing on the London Stock Exchange.

Andrew Brough, head of UK mid and small-cap equities at Schroder Investment Management with £2.5bn in funds, said: 'I have always had grave suspicions on the quality of Investec's deals, research notes and corporate deals.'

Brough was giving evidence at an employment tribunal examining the case of Louise Barton, an analyst who is suing the bank for sexual discrimination.

Brough, whose team is responsible for the largest pot of small-cap equities in Britain, told the tribunal: 'I now do not deal with Investec nearly as much as I did when Louise was there because I do not trust the corporate side - they have no independence. Most stockbroking firms have a weakness in either their corporate, research or sales sides, but I consider that Investec now has a weakness in all three.' Schroders said Brough's unwillingness to deal with Investec did not reflect company policy.

Parent Investec, which is listed on the Johannesburg Stock Exchange, wants to get a dual listing in London. It was thought to be seeking to raise £100m by issuing 10m new shares but it said today: 'The decision to raise capital will depend on market conditions.' The prospectus will be published early next week.

Brough's comments add to the adverse publicity the bank and its advisers, Schroder Salomon Smith Barney and Goldman Sachs, are facing in trying to sell Investec to investors.

IG Index sacked the firm as its broker and financial adviser on Thursday and the firm is facing a potential multi-million pound payout if Barton wins her case.

Investec has consistently sought to play down the Barton tribunal during the pre-marketing stage of the listing despite a wealth of embarrassing statements made by clients on behalf of the former employee. William Mott of Credit Suisse Asset Management said: 'Since Louise left Investec, I now do not use Investec.' Investec said today: 'We believed we treated Louise fairly.'