Kevin Maxwell tells of father's bullying

The Maxwell Trial; Day 78

JOHN WILLCOCK

Financial Correspondent

Kevin Maxwell took to the witness stand for the first time yesterday to defend himself against charges of misusing pension funds, and described his father, Robert Maxwell, as a "bully" who used "verbal brutality".

After 19 weeks hearing the prosecution case, an Old Bailey jury heard Kevin Maxwell's counsel, Alun Jones QC, outline how he would defend himself. Kevin's brother Ian, who also faces charges of conspiracy to defraud the Maxwell pension funds, listened as Kevin described their father: "I was in awe of him as a child, I was very frightened."

He said his father "was somebody who dominated any business that he was involved in and that domination was partly physical. He was a big man, he had enormous charisma and a commanding presence in a room. Given his weight and bulk he could dominate and did dominate every meeting that he attended.''

Kevin said his father was "somebody who inspired great loyalty and he was a real leader in that sense, a charismatic leader. He wasn't motivated by money, he was motivated by power, the ability to influence events, the ability to make a difference, to change things, not only in this country but abroad".

He would bully his subordinates, he said. "The domination was in part physical, part charismatic, and also he dominated by virtue of his success. The more successful he got the more people were willing to accept his judgement. He was capable of being extremely charming to people, he was capable of being winning but he was also capable of verbal brutality in meetings, public dressing-downs not only of his children but also his senior managers."

Kevin described how his father would hold daily meetings with senior managers at Mirror Group Newspapers. "If any of those managers had the misfortune to be reporting an event that displeased him, the guy would have a strip torn off him and the humiliation would be in public in front of his peers."

People were willing to work for Robert Maxwell despite his bullying nature because of the other, charming side of his character, said Kevin. "There aren't that many top jobs in Fleet Street. How many editors of national newspapers are there? If you are in positions of interest and power in an exciting environment, you put up with a lot."

His father even forced senior directors to open mail in the mail room at Pergamon Press and would harangue them if they dealt with it wrongly. "It was his way of imposing control and putting the fear of God into people," Kevin said.

While Robert Maxwell did not consider himself above the law, the tycoon constantly attempted to "stretch the law as far as it would go".

Kevin and Ian Maxwell, together with Larry Trachtenberg, a former Maxwell financial adviser, deny conspiracy to defraud the trustees and beneficiaries of the pension funds by misusing pounds 22m shares in an Israeli company, Teva, by pledging them as security for a loan, in a vain attempt to prop up the ailing Maxwell empire after Robert Maxwell's death in November 1991. Kevin Maxwell alone denies a similar charge of conspiring with his father to misuse pounds 100m shares in the Israeli company Scitex to pay private Maxwell company debts.

Mr Jones told the jury that the defence would argue that Kevin believed both sets of shares had been legally transferred from the pension funds to the private side of the business empire, Robert Maxwell Group (RMG), before being used for these subsequent deals.

When Mr Jones asked Kevin who he believed the Scitex shares belonged to in July and August of 1991, just months before his father's death, he replied: "I believed they had been transferred to the ownership of RMG. I was told that by my father. I saw an amended version of a contract and I believed those shares to have been transferred."

As for the ownership of the shares in Teva, he said: "Again I believed the ownership of Teva shares had been transferred from Bishopsgate [which administered the pension funds] to RMG. Again I was told by my father that ownership had been transferred."

Mr Jones also revealed that the defence would be calling evidence "as to how Robert Maxwell met his death". He told the jury that after his father's death, Kevin believed the banks would continue to support him and that an injection of pounds 400m into the group would be forthcoming from an investor.

Kevin's case was that he had believed that while the Maxwell empire was suffering "liquidity problems" throughout 1991 it was still "saveable" because it had a number of very valuable businesses and would enjoy the continued support of its banks. The defence argues that it was the banks that caused the eventual collapse of the group by withdrawing support.

Mr Jones said he was reluctant, because of the widespread press interest, to identify at this stage the witnesses who would be called, but they included Kevin's wife, Pandora.

The case continues today.