Facia bank sues over loan deals
Israelis allege that former employees took backhanders in exchange for arranging pounds 8m lending
Sunday 03 November 1996
In a writ served last week, the Israeli bank is seeking damages from Rafael Kellner, the former head of its London branch, and John Doherty, its former head of lending.
In return for arranging loans to Facia and to Mr Hinchliffe's private companies, it alleges, the employees received illicit payments routed through offshore accounts.
Also named in the writ are Mr Doherty's wife, Carmel; Oriri Investments, a company of which both are directors; Janet Brady, the wife of UMB's former head of trade finance Paul Brady; and Malibu Management Company, a British Virgin Islands firm.
Last Monday, the bank was also granted "Mareva" injuctions against the defendants, freezing their assets pending a hearing.
"We are a responsible institution and have a duty to our shareholders and depositors to make a clean break with the old regime and to get back monies that belong to the bank," one senior UMB source said this weekend.
The move marks the latest in a series of legal actions surrounding the controversial Sheffield businessman and the Sock Shop-to-Saxone shoes group which collapsed owing pounds 70m in June. Mr Hinchliffe is already facing a Serious Fraud Office investigation and has had his UK assets frozen after action by accountants Price Waterhouse, the receivers to Facia's shoe shops.
UMB said it was also co-operating fully with the SFO and has kept the Bank of England informed throughout.
The bank started its investigation last August into the alleged improper lending to Mr Hinchliffe and other clients following the suspension of Mr Kellner and the appointment of David Halperin as its new managing director.
Since then, about 15 people have resigned or been sacked, around half the office, including all lending staff.
Mr Hinchliffe, it is understood, was introduced to UMB by Robert Leckie, a South London property trader, and Tom Megas, a financier based in the Swiss ski resort of Verbier.
In return, it is alleged, three of Mr Leckie's companies - Marvic Investments, Lion Properties and Jersey-based Boroko Investments - received at least pounds 1.3m of commissions from Facia.
Those payments were split, it is alleged, with the former employees through a secret Swiss account at Credit Suisse belonging to Malibu.
They form part of more than pounds 10m of alleged payments by Mr Hinchliffe from Facia companies, which have been under investigation by Facia's co- receivers KPMG and Grant Thornton.
UMB declined to comment on whether it was planning further legal action against Mr Leckie or others.
This weekend, Mr Hinchliffe's lawyers, Peters & Peters, refused to comment, and neither Mr Leckie nor any of the defendants responded to calls.
Mr Leckie's solicitor, George Keppe, however, insisted that the commissions were entirely legitimate and denied that any had been paid on to UMB staff.
"They were normal City commissions. All the allegations are refuted on behalf of my client Mr Leckie, and Mr Doherty," he said.
Mr Keppe's Twickenham-based law firm, Keppe Shaw, he admitted, served as the conduit of many of the Facia payments.
In addition, Facia made smaller payments directly to Jarod Partnership and Oriri, two Bishop Stortford-based firms of which Mr Doherty is a director. Mr Leckie is also involved with Oriri, though Mr Keppe declined to elaborate on the relationship.
Last week, Facia receivers were still seeking to bring their role to a close with the appointment of a liquidator. Accountancy firm Stoy Hayward is the preferred candidate of Sears, Facia's biggest creditor.
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