Bank loans 'repaid with further borrowings'

The Maxwell Trial: Day 27
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The Independent Online
Brian Brown of Lloyds Bank told an Old Bailey jury yesterday how Robert Maxwell repaid millions of pounds' worth of bank loans by borrowing from other banks.

"The money went round the houses," Mr Brown, an executive in Lloyds' corporate lending division, said.

He said Lloyds was part of a group of banks which provided the Maxwell group with a "jumbo" loan facility of pounds 3bn. One of the loans, for pounds 105m, was reduced by pounds 20m in September 1991 and wiped out altogether in the following month.

But the jury was told that pounds 80m of the repayment was from a new loan and pounds 5m was from an overdraft facility.

Earlier, the jury had cause to smile at the embarrassment of one of Robert Maxwell's executives when he sat in the tycoon's chair by mistake.

Robert Maxwell - who has been described in court as "at times a domineering bully" - had been delayed for a board meeting in July 1991, just four months before his mysterious death.

When he did march into the room Michael Stoney, one of his finance experts, had the misfortune to be sitting in his chair. This was immediately spotted by Maxwell. Mr Stoney hurried to another place and then left the room, Stephen Wootten an auditor with Coopers & Lybrand, recalled. The court did not hear how Mr Maxwell reacted, but the jury was told that the executive very quickly moved to another chair and soon walked out of the meeting.

Mr Wootten also told the jury that information on a huge loan from the pension fund to a privately owned Maxwell company was withheld from him at a meeting held in July 1991, four months before the tycoon's death.

The purpose of the meeting, attended by Robert Maxwell and his legal and accountancy advisers, was to sign the accounts for Robert Maxwell Group (RMG) for the year to 31 December 1990, to discuss the solvency of the company and decide if it was right for it to be declared a going concern.

Mr Wootten said that he did not know at the time that the pension fund company, Bishopsgate Investment Management, had lent about pounds 85m to RMG. He was also not told that RMG owed another pounds 200m to Maxwell Communications Corporation. He did not discover that this information had been witheld until after Maxwell's death.

He also did not know that 19 days before RMG had bought Scitex shares for about pounds 100m from the pension fund company. He was told about this transaction about a month later, but he did not consider it had any significance at the time. It was not until after Maxwell's death on 5 November 1991, that he became concerned about it.

Robert Maxwell's sons Kevin and Ian, along with finance director Robert Bunn and financial advisor Larry Trachtenberg, deny conspiracy to defraud by misusing pounds 22m worth of shares in the Israeli company Teva belonging to the pension fund to try to prop up the Maxwell empire after the tycoon's death.

Kevin alone denies a similiar charge of conspiring with his father to misuse pounds 100m worth of Scitex shares to pay private Maxwell company debts.