MPs press FSA for action on split-caps

The Treasury Select Committee castigated the City regulator for its handling of the investigation into the split-capital investment trust scandal yesterday, urging it to clean up what it described as a "stain on the City".

At a public meeting yesterday, the committee chairman, John McFall, told Callum McCarthy and John Tiner, the chairman and the chief executive of the Financial Services Authority, that he was disappointed that there had still been no progress almost three months since it last interrogated the pair.

Questioned over the potential timescale of a settlement, Mr Tiner said simply: "There is no timescale, but we are reaching a point where a decision has to be made. I'm very positive we will get a solution overall, through enforcement or a settlement."

Another committee member, David Heathcoat-Amory, said: "You haven't told us anything new. There are people in the City who have this hanging over them. Give me a timescale."

In reply, Mr McCarthy said: "Of the two processes [enforcement or settlement] one is legal, and the second is not in our control. They can agree or not - it's not within our gift."

Concluding the debate, Mr McFall said: "This is a stain on the City. We want it sorted out."

The chances of a settlement between the FSA and the 22 companies being investigated appeared to be closer this week, as a new offer of £275m has been made, just £75m short of the FSA's original demand.

Elsewhere, the FSA said yesterday it had now closed its investigation into the trading of Marks & Spencer shares at about the time of Philip Green's offer for the group. The FSA concluded the first part of its investigation earlier this summer, clearing Stuart Rose, the incumbent M&S chief executive, of insider dealing.