A FURIOUS row has broken out between Invista Real Estate Investment Management and its majority shareholder Lloyds Banking Group after the fund manager claimed the bank was refusing to make payments.
Invista announced yesterday that it was suing the bank for failing to pay a £545,600 instalment it allegedly owes after cancelling a major contract with the group last year.
Executive chairman Douglas Ferrans said: “It is unfortunate that we have to take this action but we have a duty to protect minority shareholders’ interests and to not let them be bullied by larger shareholders.”
Ferrans added that “incurring unnecessary legal fees” in recouping monies contractually owed to Invista “is clearly not in the taxpayers’ interests”.
Invista had been managing assets of £2.4bn on behalf of HBOS since it demerged from the bank in 2006 and listed on the Alternative Investment Market.
But last year, the fund manager announced it was being wound down after Lloyds – which took over HBOS’s majority stake in Invista when it acquired the bank – exercised an early get out-clause and terminated all of these contracts.
Invista said the loss of Lloyds as a client amounted to nearly half of its total assets under management, which in October last year amounted to £5.4bn, being wiped out.
Last month, Invista completed the hand-over of the HBOS funds, which were awarded instead to Lloyds-owned Scottish Widows Investment Partners.
The group has since been disposing of its assets in order to return as much capital as it can to its shareholders, which include the Wellcome Trust, which owns 25 per cent.
Last month, it handed the running of the £134.4m Invista Foundation Property Trust to Schroders.
Invista, which has been growing impatient with Lloyds, said yesterday it has launched legal action against five Lloyds parties, including Halifax and HBOS Investment Fund Managers.
Lloyds responded saying it “would robustly defend” itself against the claim, declining to comment further.