As a result, almost half of a surprise pounds 81m foreign exchange dealing profit in the 1991 accounts of MCC now appears to have been fraudulent, and more could come to light as investigations progress. The foreign exchange profits were the largest part of group profit before tax of pounds 145.5m.
Forged MCC records claimed the profits were made in dealings through an investment bank - understood to be Goldman Sachs in New York - but in fact the transactions did not take place and no record of them appeared in the bank's books. Goldman confirmed that its name had been used withouts its knowledge in the MCC documents.
The administrator, Price Waterhouse, is checking through deals going back to April 1989 to see if there were other similar transactions on the foreign exchanges.
David Lee, in charge of investigation work on MCC at Price Waterhouse, said in London that 'certain transactions which apparently generated significant foreign exchange profits approaching pounds 40m may well never have taken place. Our suspicions were aroused from looking at photocopy documents substantiating these transactions which had certain unusual characteristics'.
The documents were four memoranda addressed to the late Robert Maxwell which displayed uneven typefaces and looked as if certain parts of the text had been substituted for other text. So far nobody has been able to shed light on what happened.
Mr Lee added that 'as a result of a lack of confidence in the financial records, investigations are continuing'. It is believed that a number of further dealing records do not match documents held by other parties.
The accountants are sifting through more than 200 crates of files at a number of MCC offices and reviewing more than 100 bank accounts through which a total of more than pounds 18bn in transactions passed from December 1989 onwards.
According to the court document, the administrators found three forward rate transactions 'purportedly entered into' by MCC in November and December 1990 and a further closing spot transaction on 28 March 1991. It says: 'The financial institution allegedly involved has stated that it has no record of these four transactions and accordingly it appears the transaction may never have taken place.'
MCC records appeared to show that the proceeds were paid to it through a Maxwell private company on 4 April 1991. The payment existed but appears to have been a partial repayment of an inter-company debt.
The court filings say that the administrators are considering legal action against MCC's auditors, Coopers & Lybrand, as a result of the foreign exchange and other transactions that they have investigated. They have requested access to Coopers' MCC files.
Coopers said it knew of no reason from the information reported to it to suppose the accounts did not give a true and fair view, and added that it was normal for auditors to be asked for records.
The administrators believe that this and other claims, including an attempt to recover shares in Berlitz and moves to recover money from five banks including Barclays in preference actions, could lead to total recoveries of up to dollars 300m after tax.
After administration costs of pounds 43.2m, but excluding the dollars 300m of possible further claims, the administrators expect to recover between dollars 781m and dollars 1.364bn. This would give a range of payments to creditors between 22 and 43 per cent of what they are owed, but successful litigation would raise this range to 31 to 52 per cent.
Administration costs include pounds 24.6m to Price Waterhouse and pounds 7.8m to the solicitors Norton Rose.