Eagle Trust founder convicted of pounds 12m theft from company: 'I am prepared to take whatever comes along,' says ex-boss - Ten-month trial gives SFO its second triumph in a week

Click to follow
The Independent Online
JOHN FERRIDAY, the former chief executive of Eagle Trust, was found guilty yesterday on five charges of stealing a total of pounds 12.25m and 1.7 million shares.

Ferriday's conviction was the culmination of a 10-month trial at Wolverhampton Crown Court, which itself followed a three-year investigation by the Serious Fraud Office and the West Midlands commercial fraud squad. It is the second important conviction that the much- criticised SFO has secured in a week. The case is believed to have cost many millions of pounds.

Ferriday, 48, of Sutton Coldfield, Birmingham, was remanded in custody until 19 April to allow reports to be produced prior to sentencing. Asked about the possibility of a long prison sentence before hearing the verdict, Ferriday said he had not given it much thought: 'I am prepared to take whatever comes along - if you can't take the heat, stay out of the kitchen.'

Ferriday turned to theft in an attempt to save Eagle Trust's 1987 takeover bid for Samuelson, a film and lighting equipment company. He diverted pounds 13.5m from Eagle ( pounds 11.5m covered by the charges) through a series of companies to meet his commitment to buy millions of the shares Eagle issued to pay for the deal.

This theft was an important contributor to the financial crisis that engulfed Eagle in 1989, by when it had sales of nearly pounds 180m a year. Eagle, whose interests once embraced engineering, builders' merchants and parcel delivery, suffered about pounds 85m of losses between 1988 and 1991 and would have collapsed but for the support of its banks.

Ferriday had denied the charges, claiming that he had acted for the benefit of Eagle Trust and with the knowledge of his fellow directors. His counsel, David Hood, spent long hours during the trial challenging the veracity of numerous witnesses.

According to an SFO analysis, Mr Hood's submissions took up 61 per cent of the trial, which was once expected to last three months.

Ferriday was convicted of stealing further sums totalling pounds 750,000; pounds 250,000 went towards a pounds 305,000 house for himself and his wife. He was also found guilty of helping himself to a block of shares that Eagle owned in Howden, the Glasgow engineering company.

Three other defendants were on trial with Ferriday but two months ago Judge Malcolm Ward discharged the jury from returning verdicts upon them. The judge has still to decide how to proceed with the charges against Richard Smith, 40, Ferriday's former business partner and once Eagle's managing director; Martin Baker, 37, previously Eagle's finance director; and Leslie Goodwin, 42, former boss of Connect, the parcel firm through which Ferriday routed the illicit payments.

Although the jury never heard from Ferriday himself, they gained an insight into the man from a newspaper interview he gave when the Eagle Trust scandal was at its height in September 1989.

'I had immense responsibility and absolute power,' he said. 'The normal executive functions had started to break down and the company was run more and more as an autocracy.'

When the crash threatened to scupper the share issue that Eagle used to pay for Samuelson, Ferriday resorted to 'experimental surgery'.

'I worked it out the only person at risk would be me,' he said. 'It seemed a small price to pay since I was in charge of my own destiny and the company's destiny.'

Remarkably for someone with such a tarnished reputation, Ferriday had continued to earn a living with his corporate engineering skills, working at the weekends during the trial to help companies in trouble.

He once complained: 'Everybody keeps describing (Eagle) as a public company. It's a much more special animal than that. It was a bull market phenomenon. It was a personality cult phenomenon . . . I was Eagle Trust.'