Harland fails to repay pension fund
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Your support makes all the difference.HARLAND SIMON, the troubled control systems group, is believed to have failed to repay the pounds 500,000 its small pension scheme invested in Perfect Information, the on-line news-cutting service part-owned by Harland's former chairman, Roy Ashman.
A failure to make the payment would breach Harland's public commitment to reimburse the pension fund, which accompanied its results in July.
Harland has been struggling with its own financial problems, which worsened last month when Barclays Bank refused to release the pounds 8.1m proceeds from the sale of its Vickerys subsidiary.
Perfect Information has been the source of much of the controversy that has surrounded Harland this year. The accounting treatment Harland adopted for Perfect enabled the group last year to report profits up to pounds 2m higher than they would otherwise have been.
The last declared actuarial valuation of Harland's pension scheme showed assets of only pounds 3m, though David Mahony, Harland's chairman, has said it had nearer pounds 6m by the time of its investment in Perfect in August 1991. The investment was still an unusually large one for a small pension fund to make in a related private company - particularly a high-risk start-up.
Harland made a pounds 5.1m provision against its investment in and future losses from Perfect. It seems unlikely that the pension fund would be able to recover its money if it had to sell the investment to someone other than Harland. This would make it more difficult for the scheme to meet its liabilities.
No one from Harland was available to discuss the pension scheme and the position of its members last week. Sir Ian Morrow, who recently joined Harland as chairman of an executive committee, pointed out that he had not become a director and was not able to discuss the company's past deals.
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