Unilever kept in dark for two years

CAROL Galley, the former head of Mercury Asset Management, admitted in the High Court today that she failed for two years to tell Unilever she was no longer managing its £1bn pension fund.

Questioned by Unilever counsel Jonathan Sumption QC, Galley said she had handed management of the fund to colleague Alistair Lennard in an 'evolutionary fashion' in 1994. 'Perhaps I should have told them ( Unilever) but I considered myself at that time to be fully responsible to them for Alistair's actions,' she said.

Asked by Sumption why she waited so long, Galley replied: 'Standing here today answering these questions, I wished I had told them...it was probably not what I would do today but at the time that was my judgment. I feel it makes it look as though we were not straightforward.'

Unilever is suing Mercury, now owned by Merrill Lynch, for £130m in relation to the performance of the company's pension fund in 1997 and 1998.

Answering questions about Mercury's attitude to investment risk, Galley said the group had a tradition of fund managers backing their judgment. 'It was based on training talented people and getting them to live and breathe the stock and live and breathe the economies they were investing in,' she said.