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Johannesburg - Investec Employee Benefits (IEB) has won a legal application to transfer its insurance assets to Capital Alliance (CAL) following a high court ruling on November 19 2008.
The assets in question relate to businesses acquired by IEB in 2001, when the company bought out troubled insurance business Fedsure.
"We consider the judgment fair and believe that justice has prevailed. The decision by the funds to oppose what is essentially an administrative action has proved to be misguided and costly for them. It has been extremely time-consuming for all concerned," said IEB in a statement.
"Sadly, the real losers here are the very pensioners and workers whose interests the funds claim to be protecting," says Ciaran Whelan, IEB's CEO.
According to IEB, Investec acquired the financial services business of the Fedsure Group in 2001.
A subsidiary of Fedsure, Fedlife (renamed Investec Employee Benefits), had issued policies of insurance to various pension funds. Certain of these funds raised disputes.
Investec offered to resolve these disputes by independent arbitration in 2001 at Investec's cost, but the proposal was rejected by the funds.
The funds subsequently claimed that they were not given access to the documentation that would have allowed them to proceed.
When Investec said it would be exiting the business by selling the assets to CAL and Liberty Life, a number of the funds, whose assets had been managed by IEB, rejected the proposal as there remained continued legal claims against IEB and Fedsure.
The transfer to Liberty Life was approved by the courts in 2006, but the transfer to CAL remained an issue with certain funds contesting the claim. They said that if the transfer were allowed to go ahead, there might not be enough money available to pay their claim.
The pension funds' counter-application for an asset preservation order, which would have had the effect of tying up IEB's surplus assets - valued at just under R3.5bn - was also dismissed by the courts with costs.
IEB said that the outstanding claims by the funds against it have "no merit whatsoever". The amount due to the funds is in litigation.
- Fin24.com