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:
1. 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.
2. 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