FIDELITY, one of the biggest fund man in the world, has said it has "no legal obligation" to investors who may have lost out in the Taylor affair.
A spokesman for Fidelity said that prior to it terminating its "master agency" agreement with the Taylor Group it had no direct relationship with the clients Taylor introduced.
Fidelity spoke to The Irish Times as the High Court confirmed Mr Patrick McSwiney as liquidator of Taylor Asset Managers. Mr McSwiney is also to investigate two offshore accounts operated by a related company, Taylor Investment Group (TIG).
A main part of the Taylor Group's business was its agency for Fidelity. The group directed investments to Fidelity, on which it received a commission.
However, a spokesman for the international group said that "any redress would be between Taylor and his clients". It is only since the agency terminated on July 19th that Fidelity has assumed responsibility for the funds. Prior to that, the money was invested in the clients' name care of Taylor, and Fidelity did not hold addresses or other details.
Under the agreement Mr Taylor had complete freedom to move all the money in and out of any of Fidelity's huge number of funds.
The company refused to comment on how much money Mr Taylor introduced, but details revealed in court suggest that the current amount is around $30 million (£19 million). It is not clear how much of that could be at risk, although the Department of Enterprise and Employment investigator has so far found £1.5 million to be at risk, only a part of which would have been with Fidelity.
All the company would say was that it would be "safe to assume" that any monies invested in its funds after the agreement with Taylor ended would be secure.
The spokesman added that investors had to come forward to identify their holdings. "We need to have instructions direct from clients now," he said.
Fidelity refused to reveal the details of the master agency agreement, but it is understood that it is the only one of its kind. Market sources say that Mr Taylor received large commissions under the agreement for investments he secured, as well as a smaller one if other brokers put funds through the Taylor group into Fidelity.
Meanwhile, the liquidator of Taylor Asset Managers, Mr Patrick McSwiney, has also been appointed as provisional liquidator of another company, Taylor Investment Group (TIG). Mr McSwiney wants detailed information regarding bank accounts operated by Taylor Investment Group in the Channel Islands and the Isle of Man, and would attempt to gain control of the accounts as soon as possible.
But given the complex nature of the regulatory environment in the Isle of Man and the Channel Islands, Mr McSwiney may have to go before the courts in both jurisdictions to complete his investigations. However, it is thought unlikely at this stage that either account contains substantial sums.
Mr McSwiney's appointment as liquidator to Taylor Asset Managers was confirmed by the High Court yesterday which granted a petition brought by the Minister for Enterprise and Employment, Mr Richard Bruton. The petition was also supported by the Society of Saint Vincent de Paul, and Taylor Asset Managers' former solicitors, Crowley Millar.
Following his confirmation as liquidator of Taylor Asset Managers, Mr McSwiney immediately sought to be appointed provisional liquidator to TIG, which controls the offshore accounts.
The President of the High Court, Mr justice Declan Costello, agreed to the appointment.
Mr McSwiney said in an affidavit that TIG maintained accounts with Anglo Irish Bank in Jersey, and the Royal Bank of Canada in the Isle of Man which appeared to be holding accounts for monies owed to Taylor Asset Management.
"For whatever reasons, the fees and commissions were paid into the bank accounts of TIG in Jersey and the Isle of Man and were sporadically drawn down from those accounts in the names of TIG by the company to meet expenditure," Mr McSwiney said.
