Clowes, who ran the Barlow Clowes investment outfit, is serving 10 years for his crimes. The Government paid about 18,000 mainly elderly investors pounds 150m of taxpayers' money in compensation after his firm collapsed. Liquidators to the offshore business found only pounds 1.9m in gilts where there should have been pounds 115m. Clowes is appealing against 10 convictions for theft but not against eight fraud convictions he received for lying to investors.
His counsel, Geoffrey Vos QC, said Barlow Clowes' contract was such that the money investors placed with the firm became Barlow Clowes' money, to do with as it wished. Investors' only right was to the return of their capital on demand and their monthly income payments.
Mr Vos said: 'He could not have stolen money from the investors because that money did not, in law, belong to the investors.' The charges 'were laid as stealing from investors. They could have been laid in another way, but they were not'.
Mr Vos said the firm was not acting as a trustee but as something akin to a bank. This was apparent from the internal contradiction of Barlow Clowes' brochures - they promised investors the return of their capital through an investment in gilts, whose capital value inevitably fluctuated.
In an exchange with the three appeal judges, headed by Lord Justice Watkins, Mr Vos agreed that Barlow Clowes' claims to provide a high return by investing in gilts were untrue. He argued the kernel of the contract was the investor's right to return of his money. Mr Vos said the appeal judges did not need to consider Clowes' lies about the nature of the scheme when considering the theft charges.
Clowes is also contesting the trial judge's ruling on the clause that he claimed entitled him to invest money wherever he chose. Mr Justice Phillips said the clause did not give him such wide powers and investors' money should have gone into gilts.
He is also challenging the judge's refusal to let him call evidence from the Government's solicitors that suggested he did not have to restrict investments to gilts.
Mr Anthony Hacking QC, also representing Clowes, said if the appeal against the theft convictions failed he would seek leave to appeal against the length of the sentence.
The hearing, which will cost tens of thousands of pounds or more, is expected to end today. Peter Naylor, Clowes' second-in-command, is also appealing against his conviction for stealing pounds 19,000.
Mr Justice Phillips said of Clowes: 'I do not believe any judge in this country has ever been called upon to pass sentence on a worse case of fraud than yours.'Reuse content