Woodford and former Woodford Investment Management chief executive Craig Newman took the payment just weeks before the Woodford Equity Income Fund was suspended, leaving 300,000 investors with their cash trapped.

The accounts for Woodford Investment Management, published on Friday, showed the firm lost £6.2m during the year, having reported a profit of £16m for the previous year.

The dividend was paid out in April and May 2019 and classed in the accounts as an ‘interim dividend’, with there being no final dividend paid for the year.

Dividends were paid to Woodford Capital, in which Woodford owned 65% of shares, and Newman the remaining 35%, resulting in a £975,000 and £525,000 split respectively.

Sources close to Woodford told The Telegraph the dividend was paid at a time when “there was no visibility” the fund was going to be suspended.

The Woodford Equity Income fund was suspended in June 2019 following an increase in redemption requests which couldn’t be readily met. In October 2019, the fund’s administrator Link Fund Solutions confirmed the £3bn fund would be wound-up with cash returned to investors as soon as possible.

The fund managed about £10bn in assets at its peak. It is now in the process of being wound down and its assets are being sold off. Investors have got back £2.5bn so far.

In spite of the many investors still trapped in the Equity Income fund, Woodford has announced plans to return to fund management, although regulators have raised questions about his return.