Tycoon 'treated pension surplus as his own'

The Maxwell Trial; Day 23; 'If Maxwell said jump, Coopers jumped'

JOHN WILLCOCK

Financial Correspondent

After Robert Maxwell's death it was discovered that the tycoon had been appointed "a committee of one" running his business empire as far back as November 1981, an Old Bailey jury was told yesterday.

It gave Maxwell the right to make decisions without consulting any other directors, said Peter Walsh, from the auditors Coopers & Lybrand.

Mr Walsh, giving evidence on day 23 of the trial of Kevin and Ian Maxwell, also bitterly rejected suggestions by Kevin's defence counsel that Coopers had "dropped its standards" because of Maxwell's dominating character. Coopers had audited Maxwell's businesses for 18 years before his death.

"That is an unfair and inaccurate remark," snapped Mr Walsh. However, he agreed with Alun Jones QC that the Maxwell audit was extremely important business for the accountants. "If Robert Maxwell said jump, Coopers jumped," he said. "But we do the same for other clients."

Mr Walsh said he did not discover the minute of the meeting granting sole powers to the former Mirror Group Newspapers boss until after he was found dead in the Atlantic on 5 November 1991.

The court was also given an insight into the way Maxwell regarded the huge investments of Mirror pension funds.

Mr Walsh said that as proprietor of his empire Maxwell considered he had put up most of the money for pension fund investments. So, if the investments earnt surplus funds he would ignore any attempt by the pensioners to get extra benefits. They might demand their right to that cash but Maxwell made sure he won any "battle" over who had the surplus, and it was not the pensioners.

On the other hand, Mr Walsh had never heard him say that he regarded the pension fund money as his own. Asked about Bishopsgate Investment Management - the group company which handled the pension fund - Mr Walsh said dealing with the accounts of such a company was regarded as a "high- risk audit" because the funds could be open to fraud if the company was not managed properly.

But in the many years he had dealt with Robert Maxwell he had never come across anything that was "untoward".

Asked what risks such a company faced in the event of the sudden death of the proprietor, the accountant replied that was not a matter he had considered.

Mr Jones inquired if Coopers' standards dropped because of the dominating character of the tycoon. He replied that Maxwell was one of the firm's biggest clients, paying huge sums in accountancy and audit fees, and when Maxwell telephoned the firm's top people for help he expected them to deal with the matter immediately no matter what inconvenience it caused.

Mr Walsh's evidence was recorded on video a few days ago and shown in open court yesterday. He has been very ill and the judge allowed him to be spared the ordeal of a normal court hearing.

In the dock are Kevin Maxwell, his brother, Ian, and two former Maxwell aides, Larry Trachtenberg and Robert Bunn. All deny conspiracy to defraud. Kevin alone denies conspiring with his father to defraud the pension funds by misusing pounds 100m of investments. The trial continues on Monday.