The Court of Appeal has dismissed an appeal by Aberdeen Asset Management (AAM) and UBS Warburg against a High Court disclosure order made in favour of Real Estate Opportunities (REO).
AAM and UBS were appealing David Richards J’s order that they must permit REO, a property investment fund controlled by Irish investor Treasury Holdings, to inspect redacted transcripts of confidential employee interviews with the FSA.
They claimed that they were entitled to withhold the documents on the ground that disclosing the contents of the interviews could leave them vulnerable to criminal sanctions under section 348 of the Financial Services and Markets Act 2000.
Lawrence Collins LJ said: “UBS was concerned to resist inspection of material containing information about itself. I will not speculate on its reasons for doing so, but it seems to me extremely unlikely that there was ever even the remotest possibility that it might be prosecuted for disclosing such information.”
REO had made the disclosure application in its £80m claim against its former fund manager AAM and broker UBS.
In 2001, REO was formed as a split capital investment trust, with its assets held in income and property portfolios – the financial model for REO and its flotation was developed and produced by AAM and UBS, with UBS brokering the flotation.
Post-flotation, AAM agreed to manage REO’s investments, which it did by making investments in securities issued by other split capital investment companies and trusts.
£165m was subsequently wiped off REO’s income portfolio.
In the ensuing scandal that engulfed AAM and other fund managers, the FSA investigated and interviewed AAM and UBS employees.
REO believes that the transcripts will cover AAM and UBS’s knowledge of the risks associated with splits and will prove that a different flotation model should have been used and the investments were not in REO’s best interests.
Real Estate Opportunities Ltd v Aberdeen Asset Managers Jersey Ltd and others Court of Appeal (Tuckey, Arden and
Mark Howard QC, Simon Salzedo and David Scannell (instructed by CMS Cameron McKenna LLP) appeared for the first and second appellants; Iain Milligan QC and Adrian Beltrami (instructed by Mayer, Brown Rowe & Maw LLP) appeared for the third appellant; Jonathan Sumption QC, Helen Davies and Simon Birt (instructed by Lovells) appeared for the respondent.
