Bonnyman called for Magnet trial

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The Independent Online
A LEADING venture capitalist, Gordon Bonnyman, is set to appear as a key witness in a forthcoming trial over the disastrous management buyout of Magnet, the kitchen group, writes David Hellier.

He is expected to give evidence against Arthur Andersen, the firm of accountants who were his co-advisers on the deal.

Mr Bonnyman, who led the buyout in 1989 when he was at Bankers Trust, is now the managing director of Charterhouse Development Capital, part of Charterhouse Bank. He is being called by the banks involved in the pounds 629m buyout, which include Bankers Trust, Standard Chartered, Hill Samuel, Lloyds and Bank of Scotland, to give evidence about the report on Magnet prepared by the accountancy firm for the banks ahead of the buyout.

The case is coming to court because GE Capital Corporation, which provided around pounds 70m of the finance for the deal, is suing the banks and their advisers for allegedly misleading it into making its investment in Magnet. The banks in turn are suing Arthur Andersen.

Arthur Andersen has made it clear it will defend the charges. Chris Nunn, a partner in risk management at the company, said: 'It's a classic case of lenders trying to use accountants as guarantors rather than accepting responsibility for their decisions.'

Magnet, minus most of its debts, which the banks have mainly written off, is now part of the Berisford group.