COMPENSATION for the victims of the split-capital investment trust scandal has been delayed until some time in the new year, the company set up to handle the fund said yesterday.

Fund Distribution Limited had promised "an offer before Christmas" to the 40,000 apparently eligible applicants for compensation from the [GBP]144m fund. It was set up voluntarily by the industry after tortuous negotiations with the Financial Services Authority ended in a deal last Christmas Eve.

However, FDL said yesterday that first distribution "has been deferred to the NewYear and will not be available before the end of January 2006".

It went on: "FDL is in the final stages of validating applications and is currently carrying out quality assurance checks on nearly 40,000 applications. There are still a number of applications with queries outstanding however, and in these instances, FDL is working closely with registrars, nominees, brokers and investors to resolve them.

"FDL is allowing as long as possible for this process, but in the interests of all applicants it must draw a line under outstanding queries so that it can proceed to make first distribution offers.

"All applicants should have received at least one letter plus a reminder letter, explaining what information is still needed, before any potentially eligible application is rejected. Further reminders and rejection letters will be sent early in the NewYear."

Mike Ellis, fund commissioner, commented: "While we had planned to announce an offer before Christmas, FDL must be satisfied that it has completed all of the necessary final checks before announcing the offer. It is simply the case that this process is taking longer than expected."