Kevin confronted over foreign exchange deal

The Maxwell Trial Day 54

JOHN WILLCOCK

Financial Correspondent

Kevin Maxwell was so worried about money problems four months before his father's death that he turned down an invitation to go on a fishing holiday in Norway, an Old Bailey fraud jury heard yesterday.

His decision followed a confrontation with Peter Kluge, a vice president of the Bank of Nova Scotia. Mr Kluge had himself just come back from holiday at the end of July 1991 to be told by colleagues that the Maxwell group had, for the fourth time in a very short period, failed to honour a foreign exchange transaction.

The vice president's immediate decision was to speak to Kevin Maxwell and tell him that the matter had been referred to lawyers. Asked what Kevin's response was to the threat, he replied: "He sounded surprised. He said something like he had never been threatened with legal action before."

He added that Kevin promised to co-operate fully with the bank and indicated that the money to pay the outstanding foreign exchange transaction would be forthcoming quickly. It was about this time that Kevin cancelled the fishing trip invitation, which had been made earlier by the Bank of Nova Scotia. Mr Kluge said that Kevin felt that "it was not a good time to be fishing".

Mr Kluge said he became increasingly concerned about the Maxwell group's position after the failed foreign exchange transactions.

Another of Mr Kluge's colleagues, George Marlatte, a vice president, was also asked about the failed transactions. He said that Kevin apologised to him and pointed out that the transactions had been entered into "in good faith". He said Kevin told him there had been a "snafu in the system". He added that "snafu" was Kevin's word not his.

Kevin explained that the delay was caused by action taken by the Mellon Bank, which had lent money to the Maxwell group.

On 16 July 1991, Mellon had suddenly cancelled its "swing line" facility with the Maxwells and pulled off a "classic sweep offset".

The jury was told this meant that Mellon collected every penny in all the accounts it had with the Maxwell group that were in credit.

The result was to leave the Maxwell group unable to meet the foreign exchange transactions on the due dates.

Kevin has pleaded not guilty to conspiring with his father, Robert Maxwell, to defraud the pension fund by misuse of pounds 100m worth of its investment in Scitex shares. He and his brother, Ian, and a former Maxwell aide, Larry Trachtenberg, all plead not guilty to conspiracy to defraud in respect of misuse of Teva shares, which were also owned by the group's pension funds.

The hearing was adjourned to today.

Start your day with The Independent, sign up for daily news emails
News
The two faces revealed by the ultraviolet light
newsScholars left shaken after shining ultraviolet light on 500-year-old Welsh manuscript
News
Rosamund Pike played Bond girld Miranda Frost, who died in Die Another Day (PA)
news
Arts and Entertainment
books
News
newsHow do you get your party leader to embrace a message and then stick to it? With people like this
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Marketing Manager - B2B, Corporate - City, London

£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, glo...

Neil Pavier: Commercial Analyst

£50,000 - £55,000: Neil Pavier: Are you a professionally qualified commercial ...

Loren Hughes: Financial Accountant

£45,000 - £55,000: Loren Hughes: Are you looking for a new opportunity that wi...

Sheridan Maine: Finance Analyst

Circa £45,000-£50,000 + benefits: Sheridan Maine: Are you a newly qualified ac...

Day In a Page

General Election 2015: The masterminds behind the scenes

The masterminds behind the election

How do you get your party leader to embrace a message and then stick to it? By employing these people
Machine Gun America: The amusement park where teenagers go to shoot a huge range of automatic weapons

Machine Gun America

The amusement park where teenagers go to shoot a huge range of automatic weapons
The ethics of pet food: Why are we are so selective in how we show animals our love?

The ethics of pet food

Why are we are so selective in how we show animals our love?
How Tansy Davies turned 9/11 into her opera 'Between Worlds'

How a composer turned 9/11 into her opera 'Between Worlds'

Tansy Davies makes her operatic debut with a work about the attack on the Twin Towers. Despite the topic, she says it is a life-affirming piece
11 best bedside tables

11 best bedside tables

It could be the first thing you see in the morning, so make it work for you. We find night stands, tables and cabinets to wake up to
Italy vs England player ratings: Did Andros Townsend's goal see him beat Harry Kane and Wayne Rooney to top marks?

Italy vs England player ratings

Did Townsend's goal see him beat Kane and Rooney to top marks?
Danny Higginbotham: An underdog's tale of making the most of it

An underdog's tale of making the most of it

Danny Higginbotham on being let go by Manchester United, annoying Gordon Strachan, utilising his talents to the full at Stoke and plunging into the world of analysis
Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police

Steve Bunce: Inside Boxing

Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police
No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat