Lloyds knew nothing of money owed to pension fund

The Maxwell Trial; Day 28
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The Independent Online
Lloyds Bank would have pulled the plug on aid to the debt-plagued Maxwell empire if it had known the pension fund was involved, an Old Bailey fraud trial heard yesterday.

Brian Brown, from the bank's media corporate division, said that the bank had no idea the pension fund had money owed to it until after Robert Maxwell's mysterious death on 5 November, 1991.

"If we had known, it would have raised the question about how that money became owing and whether other money was owing and what the debt position of the group was," he said.

"We would have felt somewhat misled."

At one stage, when involvement with Robert Maxwell was regarded by some banks as "nice work if you can get it", Lloyds' loans and other facilities to the tycoon's empire totalled pounds 490m, the jury heard on day 28 of the trial. It was later reduced to a little under half that sum.

Mr Brown told the jury that great pressure was exerted on Robert Maxwell and his son, Kevin, to cut their bank debts.

He said that in July 1991, he personally warned Kevin that failure to meet agreed terms over an outstanding loan of pounds 105m and another new loan of pounds 90m would be "catastrophic" for the Maxwell group.

By 4 November 1991, the bank had come to the conclusion that failure to pay a "daylight" loan of pounds 5m, lent weeks before, indicated that "there was no money in the group to repay it", Mr Brown said.

The jurors also heard of two events on the day that Robert Maxwell fell to his death in the sea off the Canary Islands. The events showed how tight for cash the tycoon's empire had become.

That very day the bank's Holborn, central London, branch was handed a cheque for pounds 4m. It was not honoured because it was written on an account which had no funds in it.

Also that day, another Maxwell group account had gone into the red for nearly pounds 5m.

In the dock are Kevin Maxwell, his brother Ian, and two former Maxwell aides, Larry Trachtenberg and Robert Bunn. All deny conspiracy to defraud. Kevin alone denies conspiracy with his father to defraud the pension fund by misuse of pounds 100m worth of investments.

The trial was adjourned to Monday.