Posted: September 21st, 2015
Verdict on the greedy – guilty, guilty, GUILTY!
City institutions and professional advisers who helped Robert Maxwell float Mirror Group Newspapers in May 1991 are all found guilty in a massive report just published after eight years of probing.
The two DTI Inspectors also criticise individual directors of MGN who were not alert to Maxwell’s misuse of company and pension fund resources – or did not share their anxieties with each other.
But the two directors blamed most for their lack of action are the two non-executive directors appointed to assure potential shareholders of the company’s probity and to see that Maxwell did not repeat the conduct that earned him such notoriety twenty years earlier. The two are Sir Robert Clark and Alan Clements.
Clark prospered even more to become chairman of MGN after Maxwell’s disappearance – and Clements became his deputy. Both have now retired from their “retirement” jobs, trotting up for the occasional (or rare) MGN board meeting and saying “yes Sir” to Capt’n Bob. Clark was 73 before he finally departed: Clements, an ex-ICI finance director, was a little younger. He was also appointed a trustee of our pension fund — and never attended a meeting until long after Maxwell had died. Yet I had warned him about our fears several times in early 1991.
The Inquiry report is the size of two telephone directories and chronicles almost every aspect of the meticulous fraud which stripped our pension funds — and the company — and wrecked and would have ruined the lives of all 12,000 Mirror pensioners and staff but for the heroic efforts of those who have stepped into the breach to patiently rebuild our fund.
The report makes fascinating reading on page after page of candid assessment. Appropriate extracts start below. The guilty cannot hide.
But first, please read the opening paragraphs of a brilliantly sardonic verdict written by Libby Purves and published in The Times on 3 April:
“It must be dreadfully upsetting to be criticised by name, in the DTI report into the Maxwell pension scandal. How embarrassing to be Sir Michael Richardson of Smith New Court, or Eric Sheinberg, Maxwell’s investment banker, or Larry Trachtenberg, or Trevor Cook, or Lord Donoughue, a director of London and Bishopsgate Investment while it was working with Maxwell on his share shufflings. How awkward to have been in a law firm like Linklaters and Paines or Clifford Chance; a Mirror Group executive director or non-exec, or anywhere near Goldman Sachs or Coopers & Lybrand Deloitte in the late 1980s.
Nor can anybody be proud of running Imro, the City regulatory body, at the time of the crime. It smugly gave the thieving monster a clean bill of health for his pension schemes only weeks before he went overboard. He took with him the security and health of thousands of workers who never met him; yet the colleagues and dupes who sycophantically smoothed his path have led charmed lives. No, I cannot much pity the hammering hearts behind the shirt-fronts last week, or grieve that Saturday mornings in Surrey rose-gardens were clouded by the DTI’s damning remarks.
It was awkward for politicians, too, formerly cosy with the great crook: Helen Liddell was once described as Maxwell’s “eyes and ears in Scotland”. Tony Blair put her into the Treasury without a qualm, and now she is Secretary of State for Scotland. I need hardly remind you about Maxwell’s closeness to Geoffrey Robinson and Gordon Brown, nor all those who sat on the Mirror board and never noticed a thing. Considering Maxwell’s record and his roaring, bullying, obscurantist, baroque management style, it might be surprising that any of these fine people fancied sharing a Big Mac with him, let alone a boardroom table. But what the hell, he was rich and powerful, so they did.
As for Kevin Maxwell, criticised with some intensity in the report over the theft of pension funds and keeping trustees in the dark, and his brother Ian, who “signed many documents without considering their implications”, their disgrace is more habitual and public. It is infuriating to see them prosperous, but perhaps they can be slightly excused as being psychologically damaged by their monstrous father, and thus mentally incapable of defying him. The rest of the suits, from normal homes, do not have that excuse. They were just idle, cowardly, credulous, or greedy. Or all of the above.
So phew! They will be pleased that the DTI report is out, and will shortly be forgotten in the general mayhem of an election and a cattle plague. Anyway, it’s all right now, isn’t it? The City institutions apologize, so does Kevin; all has been exposed and justice done, so the City can step onward with a light and virtuous heart, secure in the glow of public trust . . .
And of luminous flying pigs. The whole thing stinks, and will go on stinking because there is no will to clear it up decisively. No government has confronted the basic questions of morality and justice for the individual. After a hard-fought campaign restitution was made, but it is by no means full restitution. Some retired on less than they deserved. Hundreds of others, ten years on, are caught in a weird limbo: uncertain of their future and treated with uncommunicative disdain by well-paid financial advisers and trustees in the bewildering network of closed funds and sell-on which was left after the smash.”
The article is very worth reading in full. If you do not see the paper you can savour every worst onhttp://www.thetimes.co.uk
NOBODY EVER QUESTIONED RM
The DTI Inspectors describe in page after page of nauseating detail how Robert Maxwell (referred to as RM throughout) wrecked our pension fund and almost brought down MGN because he was allowed to. Adviser and directors who should and could have raised anxieties or challenged actions never did. CLD Coopers & Lybrand, Deloitte) were the auditors at the centre of everything. The inspectors quote an internal note from a senior partner, written in June 1991, when the robbery was in full flow. It said: “The first requirement is to continue to be at the beck and call of RM, his sons and staff, appear when wanted and provide whatever is required.”
The partner had been responsible for audits for many years. The actions – sorry, the inactions – of other professionals paid to reassure the world – like Samuel Montague, Clifford Chance, Linklaters & Paines, Smith New Court and several banks among them, all carry blame for allowing the 1991 flotation of MGN to proceed when it was, and continued to be, run irresponsibly. Maxwell ran the company via 8.30 am management meetings: the board never took control. But what about the directors, the other pillars of public companies, particularly those non-executive directors like Sir Robert Clark and Alan Clements, paid handsomely simply to ensure Maxwell did not repeat his 1971 abuses? Here are some verdicts by the DTI men: “They did not make it clear to Maxwell that he could not conduct board meetings in the way he had. They should have stood up to him…” “The Audit Committee (including Clark and Clements) never met because the non-executive directors forget about the commitment that had been made in the prospectus…” “…As they had not found out about MGN’s system of financial controls at the time of flotation they should have made enquiries thereafter and discussed the position with Mr Guest on their own initiative …”
“Once Clark and Clements had been informed of [improper] payments in and out of MGN they should have investigated what had happened or immediately raised it with Maxwell…”
MORE INSTALMENTS, MORE NAMES TO COME