The inspectors discovered that Lord Moyne, a man who in May paid nearly pounds 20m to buy control of Trustor, was involved in a company whose accounts were seriously inadequate, which falsely presented itself as a charity, and which owes pounds 451,000 to the London Borough of Camden, and other sums to Reed International, the publishing company, and the London branch of BankAustria.
On Friday Swedish police probing Trustor arrested Peter Mattsson, a business associate of Lord Moyne, and Thomas Jisander in connection with the disappearance of money from Trustor accounts. Neither was employed by Trustor.
Until recently Lord Moyne and Mattsson were directors of UK company Mattsson Guinness Securities. The company failed to file accounts and an annual return last year and was struck off the companies register in July this year.
Some years ago Mattsson was a shareholder and later a client of Effex International in Norway. Later on, the firm crashed with big currency losses and Birger Oestraat, Mattsson's former partner in Effex, was jailed for fraud. Mattsson himself gave evidence in the case.
The DTI investigation was into the affairs of Access to Justice Ltd, whose directors included 67-year-old Lord Moyne, formerly Jonathan Guinness of the brewing dynasty, and Sir William Shelton, a prominent former Conservative MP who once served as parliamentary private secretary to Lady Thatcher.
Access had two main operations. It rented out office suites in an office block in Central London leased from Reed - a business that would have brought in around pounds 640,000 a year if the suites were all fully let. Its tenants included Mr Shelton and Lindsay Smallbone, a 52-year-old New Zealander who is a close business associate of Lord Moyne.
Smallbone, who this year ran an expensive polo team at Soto Grande in Spain and who lives
in a house in Chelsea, was put in as chief executive of Trustor by Lord Moyne.
Access's other major operation was giving free legal advice to convicted criminals and others seeking "the correction and redress" of alleged miscarriages of justice. Other directors included Sir Charles Blois, a landowner who says he put pounds 250,000 into the venture for a mixture of charitable and commercial motives, and Michael Wynne-Parker, whose financial services firm was closed down by regulator Fimbra in June 1990. His firm was fined pounds 10,000 after admitting to 12 of 16 charges of misconduct. Fimbra's disciplinary committee upheld the other four charges against it anyway.
According to Sir Charles, several former inmates of Ford Open Prison and a struck-off solicitor were involved with Access. The DTI discovered that David Mahady, a convicted fraudster and disqualified director, illegally played a part in running Access.
The inspectors were so alarmed by the state of affairs at Access that Margaret Beckett, the Secretary of State for Trade and Industry, obtained court approval to shut the company down "in the public interest" in September.
A few weeks later it emerged in Stockholm that the police were investigating the alleged disappearance of pounds 48m from Trustor. The money moved from the Swedish company's bank account to UK accounts. According to Bo Skarinder, state prosecutor, some pounds 36m of the money may now be traceable in different accounts in London.
Access is now insolvent and in the hands of the Official Receiver, who will have to report on the conduct of Lord Moyne and his directors. The company successfully applied to Camden Council for rate relief as a charity. Blois says the 80 per cent rate reduction was worth pounds 150,000 a year to Access.
A Camden spokeswoman says the council received a tip-off about Access. "We started an investigation and found it was not a charity, so we retrospectively removed the rate relief we gave them from 1995 to 1997."
When Access took over the office it was paid a pounds 126,000 "reverse premium" as an inducement to take a lease, confirms a Reed spokeswoman. "We are owed money for unpaid rent," she said.
In its petition to wind up Access the DTI, said a spokesman, informed the court that "directors and companies in which they have an interest have received unjustified financial benefits from Access to its detriment".
The DTI description of the business activities of Lord Moyne and colleagues contrasts with the apparent change in his fortunes when he found the money to buy Trustor. In its petition the DTI describes how Lord Moyne and Mr Wynne-Parker received pounds 5,000 on resigning as directors in February 1996 but "did not repay the money when they rejoined the board the very next month". The DTI investigators discovered that at company meetings held in January and February this year the directors decided to pay themselves pounds 1,500 a month each backdated to October 1996.
In allegations against the company the DTI told the court that "expenses were charged to Access's Gold Card and not recorded in the accounts" and "directors have loans from Access on which they do not pay interest".
Access, said the DTI, paid money to a PR firm Introcom, whose directors included Lord Moyne, Blois and Wynne-Parker, which purportedly helped raise donations to Access. Introcom took out more from Access than it raised.Reuse content