Trustees of all the main pension funds that were ransacked by Robert Maxwell were questioned yesterday by the Commons Social Security Committee on the progress made towards recovering money for the pensioners.
The trustees deplored the fact that pounds 75m worth of cover from two insurance policies, one a trustees' indemnity and the other a general policy covering all the officers of Maxwell's companies against theft, were under dispute. Neither the first policy, written by a syndicate of UK insurers, nor the second, headed by a US company, American Insurance Underwriters (AIU), were being paid. The trustees said the insurance companies' argument was that since the frauds committed were not referred to in the insurance documents when the policies were renewed, the policies were void.
David Shaw, a Conservative MP, said: 'The insurance companies have behaved rather like other financial institutions (in the Maxwell affair), in that they made very little inquiries about the policies. Even the most elementary checks were not made.'
The trustees said they were bitterly disappointed that the companies were not paying up because of 'an absurd technicality.' They added that AIU has asked the US courts to establish that the policies are void.
It also emerged that more than 3,000 Maxwell pensioners out of a total of 32,000 have still not been traced by the four main groups of trustees, 18 months after the death of Maxwell. Jeremy Corbyn, a Labour MP, said he found this 'astonishing'. Richard Thomas, a director of Law Debenture Trust Corporation which is trustee of the Maxwell Communication plan, said tracking pensioners was complicated, since some had been employed by one Maxwell company, paid by another and given a pension by a third.