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THIS DOCUMENT IN THE PROPERTY OF HER BRITANNIC MAJESTY'S GOVERNMENT
COPY NO
9
NFIDENTIAL
CABINET
LIMITED CIRCULATION ANNEX
CC(89) 38th Conclusions, Minute 5
Thursday 14 December 1989 at 10.30 am
THE SECRETARY OF STATE FOR TRADE AND INDUSTRY said that the Par Mamentary Commissioner's report on Barlow Clowes would be published in the following week, before Parliament rose. He would at the same time make a statement to the House and publish a Government response. The Parliamentary Commissioner's report was flawed
particular, it did not take account of the established ie that regulators should not generally have liability, and greatly exaggerated the effect of mistakes by the Department fade and Industry.
Trade and Industry. Nevertheless, it had to be recognised t the circumstances were special. Department's
ance was not without blemish, legislation governing regulatory system at the time the main events had taken place had been inadequate, and there would be great political pressure to help investors, some of whom had suffered great hardship We had therefore reached the view that the Government would have pay compensation.
The
the
A scheme of compensation had been agreed with the Parliamentary Commissioner, whose willingne
willingness to
to support it would be important. The Commissioner self had suggested that there should be a modest abatement in the sums paid in compensation an account of the risks inherent in nie return investment. The abatement would be fixed So nat small investors were recompensed for a higher proportion of their losses than larger investors. The compensation would be paid to the liquidators by the end of January, and to investors by the end of February. The Government would take over investors parties and intended to take legal action Clowes auditors and anybody else from whom recover part of its expenditure. It word ensure that no compensation was paid to associates of Barlow it would take care in presentation to ring fence pay compensation, to ensure that it would not beated as a precedent in other cases.
hts against third ainst the Barlow ight expect to
eyes.
Finally, decision to
Frated
Continuing, the SECRETARY OF STATE FOR TRADE AND INSTR said that the package he had described was fair and generous, excess of public expectation.
It was therefore importan It was therefore important the
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