Jordan expects control of pounds 150m PPI assets

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The Independent Online
MICHAEL JORDAN, the joint administrator of Polly Peck International, is confident of a breakthrough in the battle to regain control of over pounds 150m-worth of PPI assets in northern Cyprus, despite his having been detained temporarily by police in Istanbul last week following bribery allegations.

The administrators - Mr Jordan, his partner at Coopers & Lybrand, Richard Stone, and Christopher Morris of Touche Ross - are expecting a hearing at the Nicosia district court a week tomorrow to lift the injunction stopping them taking control of three hotels, a packaging company and a fruit grower owned by PPI.

The removal of the injunction, which was gained after an application by Asil Nadir, would allow the assets to be sold. Mr Jordan would not be precise about how much they could raise, but other sources suggested a value of pounds 150m.

The hearing will come just before a creditors' meeting at which the administrators are expected to increase their estimate of the probable dividend for PPI creditors. The provisional estimate was 10p in the pound; now they expect to be able to pay 13p.

At the meeting, creditors will probably be asked to find about pounds 5m to fund legal action against PPI's former auditors, Stoy Hayward. The action, led by Mr Morris and his lawyers, Allsop Wilkinson, is expected to claim pounds 370m in damages.

Mr Jordan suggested that the imminent hearing, and Coopers & Lybrand's success with political lobbying in northern Cyprus, lay behind the detention in Istanbul last week, which followed an allegation that Coopers had considered bribing officials.

The lawyer and the accountant were disturbed at 1:30am by a senior official from the Istanbul public prosecutor's office, forced to give up their passports and told to turn up for questioning the next morning.

After interrogation their passports were returned and they were allowed to travel back to London. The Institute of Chartered Accountants is now investigating the bribery allegations.

These centre around a memo, written in December 1991 by Stuart Smith, a corporate finance partner at Coopers & Lybrand, in which he mentioned that bribes may be a cost of a transaction under discussion. In the memo he says he thinks the transaction should proceed.

Mr Jordan said this memo was merely the transcript of a conversation with a Turkish businessman, and it should be seen in the context of a letter to the administrators from their Istanbul lawyer, Mehmet Gun, in which he says improper procedures should not be used to obtain assets. No illegal payments were in fact made.