EMAG Chairman's letter to Vanni Treves - Chairman-elect of Equitable Life

Dear Vanni,

As agreed at our meeting on Feb 14th., I am writing to list the topics that EMAG would like to explore with you at our next meeting. This is distinct from the meeting to discuss the preliminary findings of the Independent Counsel (Nicholas Warren) as discussed between Jeremy Lever and yourself when we last met. I understand that Jeremy has already written to you with the background information about Warren's appointment and Adrian Howard-Jones of the EMAG Committee, or Jeremy, will set up this meeting with you.

The other meeting, which I will attend with two or three colleagues, can take place as soon as you have had a chance to settle in to your new role, preferably in the week of Mar. 5th. The topics we will want to discuss are:

1. Transparency/Disclosure of Information You have already promised to obtain for us some of the material we requested, viz. Thomson's analysis of the alternative options to accepting the Halifax offer, the details of the Halifax investment management contract, and the assumptions and sensitivities in the calculation of the £1.5 billion liability to meet the GAR guarantees. Thank you for all of that - it is a most refreshing change! We would like to be kept informed of the potential cost of mis-selling claims fro the years 1998, 1999 and 2000, in the light of FSA statements to the Select Committee. It would also be good to have a continuing update over time as to how the £1.5 billion is standing up to the changing circumstances.
   
   Another of my colleagues, Alex Henney, is sending you separately a framework for a 'White Paper' covering all the topics of interest to members, and we would like to discuss that with you also.
   
   
2. The Capping Negotiations EMAG is in favour of reaching a settlement which is fair to all policyholders. We believe that a settlement can only be reached on the basis of a full understanding of all the relevant information, which is why the Transparency/Disclosure discussed above, and also the Nicholas Warren conclusions, are so important. EMAG will be pleased to participate in the process of formulating a proposal, by offering constructive suggestions both as to the content of the proposal and the process to be used.
   
   EMAG includes all categories of members and is independent of IFA's or any other organisations. It is not in the position of representing any sectional interests. Our objective is to put our members in a position to make their own, well-informed, decisions about any proposal.
   
   We would like to be better informed about the position of Trustees of Group Schemes when it comes to the voting on the capping proposals. We understand they are limited to 10 votes per Group, but they will presumably represent a very large share of the value of policies.
   
   
3. Possible Litigation against Former Directors and Advisers You acknowledged at our previous meeting that, if there was evidence of breach of duty on the part of former directors, auditors or other advisers, it would be the duty of your Board to pursue the matter. We would like to share with you the evidence we have that there may have been a breach of duty, particularly in the light of the disclosures at the Treasury Select Committee hearing. We support the proposal already made by EPHAG that there should be an independent legal audit of the sequence of events that brought about the present situation of the Society
   
   
4. Composition of the Board We were pleased that you included Action Group and NAPF representatives in your specification of your proposed Board. We would like to discuss with you the process by which such candidates will be selected and also the way in which they will be presented to members for approval. We would also like to explore the process by which independent candidates can be put forward, with a fair opportunity to seek the votes of members without influence by the Board. We would like to see the AGM set up and run in a way which is fair and transparent, including the way in which proxies are sought and exercised and the way in which information from independent candidates is disseminated. We would also like to see changes in the Articles to allow members to requisition an EGM or propose resolutions at an AGM with a much smaller number of signatures than the present 50,000 or 25,000 respectively.
   
   
5. Regional Members' Meetings We strongly support your intention to hold meetings for members across the country and we would be pleased to participate in any way we can. We will certainly encourage our members to attend, e.g. by publicising the meetings on our website and in our communications to our members.