Murray secret bank account row

THE 'rewards for failure' row at Murray Financial Corporation is set to intensify as it emerged today that the firm secretly transferred founder Ken Murray's proposed pay-off into a ringfenced bank account.

The £850,000 sum, more than three times Murray's salary, was paid into an escrow account at an Edinburgh branch of Lloyds TSB by Murray and his then boardroom allies in June.

None of the incoming boardroom team has access to the account, whose signatories are Murray, two former MFC directors, Anthony Fabrizzi and Russell Frith, and the former company secretary Gavin Mair.

Jonathan Rowland, the turnaround entrepreneur behind the recent change of control at MFC and a current MFC director, confirmed that the money had gone: 'We have no control over it.' Rowland, who is trying to minimise the pay-off, added: 'I think the shareholders feel cheated.'

Murray denied any wrongdoing and said the transfer to an escrow account was perfectly normal in the event of a dispute. He expected there was a mechanism for transferring partial power over the account to the current board.

Shareholders in AIM-listed MFC were not informed of the 6 June payment, which is equivalent to more than 30% of MFC's entire value and so might be considered 'material'.

It is doubly contentious because Murray stands accused of failure, having set up MFC to buy a building society, which he never achieved. Shareholders have seen their 10p shares shrink in value to 2 3/4p. Murray said he was 'bending over backwards to be co-operative'.