The Society of Turnaround Professionals (STP) said the changes introduced under the pensions bill would scare off company doctors who step in as directors.
It said that two parts of the bill – sections 35 and 39 – had been so loosely drafted that they created a climate of confusion and fear of ‘large, uncertain and unprecedented liabilities’ that could ensnare the innocent along with the guilty.
John Harris, chief executive of the STP, said: ‘It’s a bit like telling a heart surgeon to keep on doing his operations, but if he gets one wrong, the family could have a negligence claim on his personal assets.’
The Department for Work and Pensions insisted that the changes – known as the ‘moral hazard’ clauses – would stop companies or directors from trying to dump their liabilities on the government’s pension protection fund.
A spokesman insisted legitimate turnaround professionals had nothing to fear because cases would be decided at a senior level by the new pensions regulator.
But Harris said: ‘We don’t want this scrapped but clarified. To actually say “look chaps, just trust the regulator” is not good enough. Until you’ve got some case law you wouldn’t take the chance.’
The STP is just the latest addition to a growing alliance against the reforms, including the National Association of Pension Funds (NAPF) and the British Venture Capital Association (BVCA).
At least one venture capitalist is already understood to have pulled out of funding a company due to the changes, while a leading turnaround specialist said the same ‘chilling effect’ would affect company doctors.
- Email Brian_Moher@vnu.co.uk.
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