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Chairman Equitable Life, Vanni Treves
Chairman Equitable Life, Vanni Treves

BBC BREAKFAST WITH FROST INTERVIEW: VANNI TREVES, CHAIRMAN EQUITABLE LIFE DECEMBER 9TH, 2001

Please note "BBC Breakfast with Frost" must be credited if any part of this transcript is used

DAVID FROST:

Now Equitable Life is of course Britain's oldest life assurer, pillar of respectability that hundreds of thousands have trusted with their pensions. But then it all started to go wrong, some policyholders were guaranteed high returns, guaranteed high returns and to cut a long story short the society suddenly found it couldn't afford them. Equitable Life were confident they could renege on their guarantees by pleading potential bankruptcy but the House of Lords said, no way Jose, the guarantees stand firm and now Equitable faces huge liabilities and the man who's been brought in with the unenviable tasks of trying to sort the whole thing out and thrash out a compromise deal is Vanni Treves and he's here with us now, good morning.

VANNI TREVES:

Good morning.

DAVID FROST:

Do you regret taking it on?

VANNI TREVES:

Not at all, I have my moments but it's a very important job, giving it our best shot.

DAVID FROST:

Now you've got, you've got the vote and all these large packets are arriving with policy holders around the country and they've got to vote, first of all for those with guarantees to get 17.5% boost, non-guaranteed 2.5% boost but they've also got to approve the other 17.5%, three votes, you've got to get 75% in all of them in order for Plan A to go ahead?

VANNI TREVES:

That's right.

DAVID FROST:

If you don't what would Plan B be?

VANNI TREVES:

There is no Plan B.

DAVID FROST:

None at all?

VANNI TREVES:

None at all, to continue as best we can and it's a very, very bad future, we have increasing instability, we have no investment freedom, bonuses are bound to be cut, we don't receive £250 million from the Halifax and crucially there'll be continuing anxiety for the 30 or 40 years the society will continue to, to live on, enormous anxiety for all our members.

DAVID FROST:

But it wouldn't have to close because of bankruptcy?

VANNI TREVES:

No we'll do everything we possibly can not to close it but it's a very, very unpleasant future.

DAVID FROST:

And this 75%, I've seen it quoted both ways, is it 75% of those who vote, not of the overall number?

VANNI TREVES:

It's 50% of those who vote by number and 75% by value in each of the two classes and therefore you have to achieve that very high hurdle in each class and if in either class we got say only 74% then the compromise wouldn't happen, it's an appalling future.

DAVID FROST:

And it's 75% of the people who vote?

VANNI TREVES:

75% of¿

DAVID FROST:

Not by value?

VANNI TREVES:

It's half the people.

DAVID FROST:

Yes if half the people don't vote that doesn't count.

VANNI TREVES:

If we only get 49 per cent voting in favour then it won't happen.

DAVID FROST:

And, and so obviously it's vital from that point of view. You said, you said on one occasion and other people have said that there might be legal action against former directors or former regulators, is that possible?

VANNI TREVES:

Absolutely and we've put that in train. I mean we have to look to the future now and the future's represented by the compromise and people have to vote, our members have to vote by January 9 if a compromise is going to happen but we are also looking at the past to see what culpability there may have been in the past and if there's culpability on the part of past directors, past advisors, even the regulators, we'll take action without fear or favour.

DAVID FROST:

And so that, that could be more money for policy holders if you, if you, if procedural, you won't sue the directors who haven't got any money, or would you?

VANNI TREVES:

No it has to be cost effective and any returns in the way of legal action would be years ahead, that's the way these things are. And, but there's absolutely nothing to stop us maintaining our claims for legal action in parallel to the compromise, it's not either or, we must get the compromise through if we possibly can and in parallel we'll continue the legal action if it's cost effective to do so.

DAVID FROST:

And in fact, if in fact there was a sharp fall in the stock market which we hope there won't be and so on, is there a danger that you would have to come up with new reduced solutions in that situation, I mean or can you, using the words that perhaps, is not the right word to use in terms of Equitable Life, I mean can you guarantee there will be no further reductions whatever happens in the stockmarket?

VANNI TREVES:

We can't do that, no more than any other company can do that, we are in the same position as any other pension fund and if there are big declines in the investment markets we'll suffer them in the same way as all our competitors. But of course we are much more vulnerable because we don't have the reserves that many other societies do.

DAVID FROST:

And what about, at the moment you can't, for instance, take on new, new members, new clients, would you hope if this goes through that that would be lifted and you could once more seek new customers?

VANNI TREVES:

At the moment we're in a box, it's a windowless box and what we've tried to do with this compromise is give our members the key to the box so that we see some sunlight and I'm a member too so I know what it feels like. Once we are out of the box if members decide to turn the key then the future's much more optimistic and options will present themselves that don't exist now.

DAVID FROST:

So it is possible that you could sign up new members?

VANNI TREVES:

All things are possible but for the moment we can't begin to contemplate until we achieve a compromise.

DAVID FROST:

But that's important signing up new members isn't it, because people wouldn't stay willingly, probably, with a, with a crippled company that couldn't, could never do more business?

VANNI TREVES:

Existing members can still put in more money and a surprising number still are and we have a significant amount of new premium income as we speak from existing members but we are closed at the moment to new members.

DAVID FROST:

And on one other topic Vanni, while you're here, on a lighter note the papers have been full this weekend with the, with the fact that you may be just about to announce a new, the new Head of Channel 4, of which of course you're chairman?

VANNI TREVES:

We've made no decision yet, we have a galaxy of talent wanting to have the job and we're moving ahead with all deliberate speed to make the best decision in the public interest.

DAVID FROST:

Will you be able to do it this week?

VANNI TREVES:

We hope so but we're far from certain and we're not going to be rushed.

DAVID FROST:

And one paper says you've got a shortlist, it's down to three, another paper says it's a shortlist down to two, how big is the shortlist at the moment?

VANNI TREVES:

Well the shortlist moves up and down depending on people's views, but it's a shortlist of two or three.

DAVID FROST:

Two or three, well we'll look forward to finding out, thank you very much for being with us on, we, we welcome you for being here, thank you very much.

VANNI TREVES:

Thank you.

END


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