Woodford may be a witness FOR investors
DISGRACED fund manager Neil Woodford could be asked by a City law firm to stand as a witness against the supervisor company behind his failed fund.
Litigation firm Harcus Parker has amassed more than 6,000 investors to sue Link Financial Services, whi c h s h u t t e r e d Woodf o r d ’s £3.7 billion Equity Income fund in 2019. Legal proceedings could begin as soon as next month.
In an ironic twist, its plans could lead to Woodford appearing in court to help investors get their money back. Harcus Parker will argue that Link failed to check properly that the fund was able to meet withdrawal requests. Woodford made large investments in small firms, making it difficult to sell out when performance tanked.
Daniel Kerrigan, a senior associate at Harcus Parker, said the claim could run into tens of millions of pounds. The firm will also argue that Link did not properly assess the value of some of the private companies Woodford backed, which were sold off at a huge discount after the fund was closed.
Lawyers warn it is almost impossible to sue Woodford himself because of the way funds are structured, leaving Link on the hook.
The c o l l a pse o f Woodford’s fund, which had about 300,000 investors, is the biggest ever retail fund scandal. Woodford has blamed Link over the way it sold off assets in his closed fund. He has previously said he ‘wouldn’t in theory shirk from being cross-examined’.
He shocked the market last week by revealing plans to launch a new investment company, WCM Partners, to be based in Jersey and Buckinghamshire. The Financial Conduct Authority said it is still investigating the downfall of the fund.
Jersey’s financial watchdog said it was ‘ disappointed’ Woodford made the announcement before sending an official application.
MP Mel Stride, chair of the Treasury Select Committee, said it ‘may understandably be of concern to investors who previously lost out’.
Link said: ‘No legal proceedings have been served.’