Capita concludes
full and final settlement with FCA regarding
Connaught Income
Series 1 Fund
Capita plc (“Capita”) announces today that it has agreed a full
and final settlement with the Financial Conduct Authority (FCA)
regarding the Connaught Income Series 1 Fund (“The Fund”). Capita
Financial Managers Limited ("CFM") was the Operator of the Fund
until September 2009, when it was
replaced by an unrelated company as Operator, following which CFM
had no further involvement with the Fund. The Fund went into
liquidation in 2012 and its liquidator brought a claim against both
former Operators, which for its part, Capita settled in 2016 for a
sum of £18.5m.
The FCA has been undertaking a formal review of the activities
of both Operators and has announced today that it has concluded
that CFM did not meet all of its regulatory requirements in the
period April 2008 to September 2009. To ensure that investors receive
appropriate redress and to bring this matter to a close enabling
the smooth disposal of CFM, CFM and Capita have agreed a full and
final settlement with the FCA. In reaching this settlement, the
full cooperation which CFM has given to the FCA during the course
of its investigation has been acknowledged.
CFM has agreed to up to a further £66 million being made
available for the benefit of the Fund’s investors, with Capita
agreeing to fund this amount. The FCA considers that this payment
will be sufficient to return the amount originally invested, taking
into account any interest, distributions and other payments that
have already been received, with the intention of placing investors
as closely as possible back into the position they would have been
in if they had never invested in the Fund. Capita is expecting to
make redress payments to the Fund’s investors via the FCA and their
agents during the first quarter of 2018.
This settlement allows for the available funds to be directed
towards the Fund’s Investors. Given the circumstances, the FCA do
not consider that it would be appropriate to require CFM to pay a
financial penalty.
As the FCA had previously indicated to Capita that it was minded
to seek a financial penalty against CFM, Capita had made provision
for the full potential amount of the financial penalty and
associated legal costs (£37m). Based on the information available
at that time it was not however possible to determine what the
ultimate outcome of the FCA investigation would be.
Capita completed the disposal of its Asset Services businesses,
including CFM, to the Link Group on 3
November 2017.
-Ends-
Notes:
-
The FCA has stated that it is appointing an agent to carry out
the calculation and distribution of monies to investors. It is not
necessary for investors to take any further action at this time.
The FCA or its agent will contact each investor with an outstanding
claim against the Fund with more details shortly.
-
Capita is a leading UK provider of technology enabled customer
and business process services and integrated professional support
services. With 67,000 people at over 500 sites across the UK,
Europe, India and South
Africa, Capita uses its expertise, infrastructure and scale
benefits to transform its clients' services, driving down costs and
adding value. Capita is quoted on the London Stock Exchange
(CPI.L). Further information on Capita can be found at:
http://www.capita.com. LEI no. CMIGEWPLHL4M7ZV0IZ88.
This announcement contains inside information.
For further information:
Capita plc Tel: 020 7799 1525
Andrew Ripper, Head of Investor
Relations
Fiona O’Nolan, Director, Corporate Communications
IRTeam@capita.co.uk
Media enquiries:
Powerscourt Tel: 020 7250 1446
Peter Ogden and Andy Jones
capita@powerscourt-group.com