Split roles of investment trust chief

A LEADING light in a trade association that criticised the 21 firms in the split capital investment trust debacle is himself director of a fund that made money out of it.

Hamish Buchan, 59, is deputy chairman of the Association of Investment Trust Companies. It has helped the Financial Services Authority investigate the split capital crisis in which thousands of investors lost more than £600 million.

Buchan, a former City analyst, is also a trustee of the AITC Foundation, set up to help investors who are suffering as a result of their losses in splits.

But he is a director of seven investment trusts as well, including one that made £100,000 from a short term punt on shares in Aberdeen Asset Management, the biggest firm involved in splits.

Collective Assets, based in Edinburgh-is a fund of funds, which means it holds shares in other trusts. Ironically the splits under investigation were all fund of funds.

Collective's latest annual report reveals that just before October 2002 - at the height of the splits crisis - it bought 500,000 shares in Aberdeen Asset Management for £226,000. Just one month later, Collective sold the shares, making a profit of £100,000.

Buchan said: 'I am not the fund manager at Collective and I don't make the investment decisions. My role as a director is to make sure the rules are not being broken and that corporate governance issues are being observed.'

Buchan added that he was aware of the investment in Aberdeen only after the event.