Murray in secret bank account row

The battle over an £850,000 pay-off to the founder of Murray Financial Corporation, the failed building society takeover vehicle, escalated yesterday after it emerged the funds have already been siphoned off to a secret company bank account.

Shareholders in Murray Financial Corporation last month triumphed in ousting Ken Murray, the company's founder and former chief executive, from the board, where he had remained as a non-executive director, and vowed to do all they could to block his pay-off.

But it has now come to light that £850,000 had already been deposited into an escrow account in June, unbeknownst to shareholders. Mr Murray and two former MFC directors, Anthony Fabrizzi and Russell Frith, and the former company secretary Gavin Mair are signatories to the account, but none of the company's new board members have access to it.

Mr Murray, who earned a salary of £251,000 a year for running what is now only a cash shell, has initiated legal proceedings against the company for breach of contract.

"I was sacked as chief executive in May and it was made clear to me that my payment would be contested. That's why the escrow account was set up. The money will only be released if a court rules that I am entitled to it. If it doesn't, the money will go back to the company," Mr Murray said yesterday.

Resurge, the turnaround finance company run by Jonathon Rowland that owns 30 per cent of MFC, said it should have been told the company's money had been put in escrow. "Company funds have been put completely out of reach from the people running the business," Mr Rowland said. "We have no access to those funds. Mr Murray is not giving us any assistance."

Resurge said it would offer Mr Murray a settlement next week, but was prepared to fight the matter in court.