Walker payout queried: Maxwell investigators convinced bulk of compensation did not come from MCC

THE lion's share of the pounds 500,000 pay-off received by Lord Walker of Worcester, a former Energy Secretary, when he left Maxwell Communication Corporation is believed to have come from Maxwell pension funds or Maxwell private companies.

Lord Walker has already pledged to repay the money if it can be proved that it came from Maxwell pensioners and not, as he understood, from MCC.

Investigators are convinced that the money did not come from MCC resources.

Lord Walker, who was on the board of MCC for six months from April until September 1991, was compensated for loss of office with pounds 100,000 in cash, a Mercedes Benz worth pounds 50,000 and 202,000 shares, which he sold for pounds 342,000. Lord Walker had been hired to become the new chairman, but on 11 July he was told by Robert Maxwell that he did not wish him to become chairman.

Lord Walker said the pay-off was fair considering the terms of his contract, but that he would give back the money if it could be shown that any of it came from the pounds 434m which Robert Maxwell stole from his companies' pension funds.

When contacted at his Worcester home last week, Lord Walker said: 'I don't see why I should speak to you.' .

The shares were purchased by the Maxwell Macmillan Long Term Incentive Compensation Plan, a trust based in New York and administered by two lawyers, Ellis Freedman and Geoffrey De La Pradelle, who were long-time associates of Robert Maxwell.

Basil Brookes, who was then finance director of MCC, has told the Independent on Sunday that the board did not know about the share award or purchases when Lord Walker received them last September. In addition, MCC did not provide the money to purchase the shares from Lord Walker.

'I do not believe MCC actually funded the purchase of the shares,' he said. 'I would have seen it (the transaction) if it had gone through MCC.'

Mr Brookes said that he saw and approved the transactions which gave Lord Walker his car and the pounds 100,000 in lieu of lost salary but saw no documentation about the shares. 'It was not something the board was aware of at the time.'

He said he was meticulous about authorising transactions at the time because he and some of the other non- executive directors had only recently won a battle with Robert Maxwell to regain control of the company's finances.

Sir Michael Richardson, chairman of the stockbroker Smith New Court, which handled the share transaction and on whose board Lord Walker is a non-executive director, said when contacted on holiday that he had 'no idea' where the Maxwell Macmillan Long Term Incentive Compensation Plan found the money to buy the shares. 'As far as we were concerned, it was an in-and-out transaction of the fund,' said Sir Michael.

He sent a letter to Kevin Maxwell on 2 October confirming the sale of two lots of shares from Lord Walker to the Incentive Plan. The first was for 107,142 shares at 169p each on 23 September and the second was for 94,651 shares at 168p on 26 September.

Smith New Court billed Mr Freedman at the Incentive Plan's offices in New York on 30 September.

Investigators believe it is possible that the money may have come from PH (US) Inc, a Delaware-registered company controlled by the Maxwell Charitable Foundation in Liechtenstein. Mr Freedman is a director of PH (US) Inc and is a representative of Swico Anstalt, the Swiss parent company of PH (US) Inc.

Mr De La Pradelle, who is based in Paris, is a director of Swico.

Investigators from Price Waterhouse, administrators of MCC, and Arthur Andersen, administrators of the Maxwell private companies, have both applied to the US courts for access to PH (US) Inc's books. Arthur Andersen's application has been accepted and it is awaiting a court order.

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