Guinness four win right to appeal

Serious Fraud Office accused of withholding key evidence

The four defendants in the first of the two Guinness trials were yesterday given leave to appeal against their convictions for theft and false accounting after allegations that the Serious Fraud Office withheld evidence.

The referral to the Court of Appeal, announced by David Maclean, a Minister of State at the Home Office, is another embarrassment for the SFO; its future is under review after accusations of incompetence and mismanagement.

The convicted men allege that, during their trial in 1990, the office withheld evidence that would have helped to establish their innocence.

The former Guinness chief Ernest Saunders, 58, the entrepreneur Gerald Ronson, 55, and Tony Parnes, 48, a stockbroker, all served jail terms for their part in the affair. A fourth man, the financier Jack Lyons, 78, was spared a 30-month jail sentence because of ill health, but was stripped of his knighthood in March 1991. The four were fined more than £8m.

They were found guilty of illegally supporting Guinness's share price during the company's £2.7bn takeover for Distillers, the whisky group, in 1986. Mr Parnes was accused of recruiting Mr Ronson and others to buy shares in Guinness which, in turn, indemnified them for any loss should the price fall.

The decision to allow the appeal comes two months after the European Commission of Human Rights ruled Mr Saunders was denied a fair trial because methods used to secure evidence from him were "oppressive" and he was "in effect compelled to incriminate himself" during the seven-month trial.

George Devlin, Mr Saunders' lawyer, said last night: "He has always contended that his trial was unfair and this will give the Court of Appeal the opportunity to determine whether or not the original trial was unfair."

The Independent disclosed last month that Scotland Yard had opened an internal investigation into allegations that police working with the SFO on the Guinness trial altered documents and withheld evidence.

The defendants first applied to the then Home Secretary, Kenneth Clarke, two years ago for the right to appeal against conviction. They intensified the campaign in early 1993 soon after Thomas Ward, a key figure in the Guinness affair, was acquitted on £5.2m theft charges.

Keith Oliver, solicitor for Mr Parnes, said yesterday: "We applied on the grounds of material non-disclosure by the SFO of documentation in relation to key issues. The documentation related to stock market and practice at the time, which was subsequentlydisclosed by the SFO during the second trial."

The basis of the appeal is that the SFO sat on evidence of at least six other cases of indemnified share support operations used at the same time as Guinness's takeover bid. It is alleged that the SFO did not disclose to the defence that a special tribunal, which examined the Guinness share transactions, ruled there was no "false market". The tribunal sat in 1988 - before the first trial started. Shortly before that trial lawyers for Mr Parnes received written confirmation from the SFO that all unused material concerning the case had been disclosed.

But the SFO only revealed the tribunal conclusions in 1991 during the second Guinness trial. That collapsed after Roger Seelig, a former corporate finance director at Morgan Grenfell merchant bank, became ill while handling his own defence. The other defendant was Lord Spens. Yesterday he said that he believed the first trial convictions were wrong.

The SFO said that it would strongly defend the case when it goes to the Court of Appeal.