DTI probe into Norton looks at Rudd links (CORRECTED)

Click to follow
The Independent Online
CORRECTION (PUBLISHED 3 SEPTEMBER 1993) APPENDED TO THIS ARTICLE

THE DEPARTMENT of Trade and Industry inquiry into the Norton motorcycle company is believed to be investigating links with Tony Rudd, a controversial financier who has been under intense DTI scrutiny before.

The Independent has learned that the inquiry appears to stretch far wider than first thought, including to property deals with links abroad.

Norton, once the pride of British motorcycling, is close to agreeing a refinancing package that could see the relisting of its shares, suspended last year at 18p.

The DTI says its investigation, begun in January 1991, is at an advanced stage. Its inspectors are now in possession of documents detailing a complex set of deals traced to the family interests of Mr Rudd.

Mr Rudd's daughter, Amanda, is married to Philippe Le Roux, former Norton chief executive and one of the central figures under investigation. It would be the third time the Rudd family has been connected with DTI inquiries.

In 1988 Mr Rudd and Gerald Kelly, partners in the stockbroking firm Rowe Rudd which ceased trading in 1981, were described as 'totally unfit to be directors of a company' in a DTI report on the Greenbank investment trust. But they escaped disqualification because the relevant laws were only passed in 1983 and could not apply retrospectively.

In 1986 the DTI petitioned for the winding up of Buckingham Corporate Securities, based at offices occupied by Mr Rudd and an investment company called Lawnstone, run by Mr Le Roux and Amanda Rudd.

The DTI is expected to have investigated what part Lawnstone played in the acquisition of Norton. In 1987 Lawnstone was involved in a complex transaction in which properties owned by a firm called Multi Construction were swapped with Manganese Bronze for Norton.

Multi Construction's ownership can be traced back to a South African company called Murray and Roberts. Lawnstone held Multi Construction shares as a nominee.

DTI inspectors are almost certain to have in their possession letters written over four years between Mr Le Roux and Mr Rudd. These concern ways to raise funds for Norton and future strategy of the company. Mr Rudd was not a director of Norton.

DTI investigators were already looking at Norton's takeover in November 1990 of FUS, the German fasteners maker, for pounds 8.2m. This raised eyebrows because the vendor was linked to a Channel Islands trust formed to benefit the children of James Tildesley, Norton's non-executive chairman and main shareholder. The takeover was partly funded by a troubled pounds 6.5m rights issue. TC Coombs, Norton's underwriters, had difficulty coming up with its share of the money. Mr Le Roux and Mr Tildesley quit Norton soon after.

It seems that the inspectors are also looking at Norton's reverse takeover of the property group Minty in 1989, which brought it to the market. Norton share dealings in Crown, a communications firm, and Eidos, a computer group, have also been put under the spotlight.

The investigation is being carried out under section 432(2) of the Companies Act 1985, which is used when there are suggestions of defrauding creditors or unfair treatment of shareholders.

Michael Heseltine, President of the Board of Trade, will decide if the report should be published.

CORRECTION

On 11 August 1992, the Independent reported that DTI inspectors were looking at links between Norton Group Plc and the financier Tony Rudd and his family and their associated company, Lawnstone Limited. The inspectors have since published their report and it is clear that its main focus was on acquisitions made by Norton, and property deals. Neither Lawnstone, nor Tony nor Amber Rudd were concerned with those deals. The inspectors did not ask to interview Mr Rudd or Amber Rudd.

We regret any wrong impression given by our article and apologise for any embarrassment to Tony Rudd or his family or the directors of Lawnstone.

(Photograph omitted)

Comments