£130m battle of the City superwomen

by NEIL SEARS, Daily Mail

During her three-decade climb to be the most successful woman in British finance, Carol Galley has earned the nickname 'the ice maiden'.

Always calm under pressure, she earns up to £10million a year managing huge investments in stock markets worldwide.

She has also built up a personal fortune of £100million which she hopes to enjoy on retirement in December.

But yesterday the 'ice maiden' had to do her best to remain cool when she appeared in the witness box in a sweltering court.

She has been accused of negligence in handling of the £1billion pension fund built up by 110,000 employees of soap powder giant Unilever. Unilever says investments she oversaw were unwise.

To add drama to the case, Miss Galley's main accuser is another City superwoman - Unilever pensions chief Wendy Mayall - and yesterday both met eyeball-to-eyeball in the London High Court.

Unilever is claiming £130million in damages from Miss Galley's employers, Merrill Lynch Investment Managers, alleging she gave too much freedom to her protege Alistair Lennard, who was just 27 when he took charge of the massive pension fund account.

Miss Galley told the court her investment group Mercury Asset Management, as it was known before it was bought by Merrill Lynch, had high standards.

She said: 'Mercury had chosen to believe that good investment over time required flair, creativity, judgment and good people who were not afraid to take risks when it was appropriate.

'In order to sustain that you had to train people and then allow them freedom and discretion.

'However sad and sorry I am to be standing here talking about a period of very disappointing performance, I can look back with huge pride on what my colleagues at Mercury achieved over very many years.

'They delivered not only good results to Unilever for nine years, but it built Mercury from a tiny firm in 1979 to market leader throughout the 80s and 90s.'

Cross-examining Miss Galley, Unilever's QC Jonathan Sumption suggested her handling of the Unilever pension fund had ensured that it did not receive adequate returns on its huge investments.

In particular she had allowed Mr Lennard to take charge of £600million of the Unilever fund when he was just 27 and he had taken increasing risks.

She had never informed Unilever about the fact that greater risks were being taken, he claimed.

Miss Galley insisted Mr Lennard was qualified to handle such vast sums, and said an uncontrollable stock market was to blame for the Unilever investment plan falling 10 per cent short of the targets set. She denied that Mr Lennard, who left Merrill Lynch a year ago and is now 35, lacked the experience for such a big account.

'In fund management age and experience do not always go hand-in-hand with good performance,' she said. 'In fact, as people get older they get too conservative. Often, good fund managers operate at their best between 27 and 35.'

Miss Galley has accused Mrs Mayall of being behind a crude attempt by Unilever to blackmail Merrill Lynch. In a statement she told of a meeting in January 1998 with Unilever finance director Hans Eggerstedt to discuss the fund's poor performance.

She said: 'I was told that either we paid compensation to the Unilever Superannuation Fund or Unilever and the USF would take steps to sack us as publicly as possible, and to ensure that the damaging publicity associated with losing such an important client would reflect not only on Mercury as a house but also on me personally. This seemed to be no more than a crude attempt at blackmail.'

The ploy could be traced back to Miss Mayall, she said. 'Mr Eggerstedt said on several occasions he had not looked at the detail but was merely repeating Wendy Mayall's arguments.'

Mrs Mayall stayed in court for the first hour of Miss Galley's evidence yesterday - her eyes fixed on her throughout. Miss Galley had watched just as closely during the four-and-a-half days Mrs Mayall was in the witness box.

The case continues.

No comments have so far been submitted. Why not be the first to send us your thoughts, or debate this issue live on our message boards.

We are no longer accepting comments on this article.

Who is this week's top commenter? Find out now