MGN directors were told of missing 100m pounds

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The Independent Online
SIX directors of Mirror Group Newspapers - including Sir Robert Clark, now the chairman, and Vic Horwood, chief executive - were formally told that around pounds 100m was missing from the Maxwell pension schemes two weeks before the decision was taken to suspend MGN's shares.

Trevor Cook, manager of the Mirror Group Pension Scheme, told a meeting of MGN's board on 18 November last year that there were serious problems.

Prior to the meeting, which is not mentioned in the account of events contained in MGN's report and accounts, Mr Cook had told some of the directors of his worries and asked for a meeting to be convened.

It took place less than two weeks after Robert Maxwell's death but two weeks before the directors told the rest of MGN's board and the group's shares were suspended at 125p. The shares stood at 117p on 18 November.

The Stock Exchange has said MGN directors should have alerted shareholders to their worries over missing money earlier. The revelation that MGN directors knew so early about problems with the pension funds will add to pressure for the resignations of those at the meeting.

It was chaired by Ian Maxwell, Robert's son, and was attended by Sir Robert, Mr Horwood, Ernest Burrington, who last month stood down as MGN's chairman, Lawrence Guest, who resigned as the group's finance director, and Alan Clements, the former ICI finance director who was a non-executive director. Other directors say they did not learn of its contents until later.

Ian Maxwell remained chairman and his brother Kevin remained on the board until 2 December, when they announced their resignations.

At the 18 November meeting Mr Cook said that pounds 103m due to the Maxwell pension schemes was missing. The money had come from the sale of shares in Scitex, an Israeli printing company, in October. It has now emerged it was used to pay Maxwell private company debts.

MGN's report and accounts reveal that at that time the group's directors also had worries about money missing from MGN. Mr Guest had raised concerns about money being transferred from MGN to Maxwell private companies in September. This had been communicated to MGN's merchant bankers, Samuel Montagu, who had approached Maxwell and later Mr Clements.

On 29 October Mr Clements and Sir Robert raised the issue of pounds 28.8m that was missing with Maxwell. The accounts then say: 'Robert Maxwell's death intervened. Those directors continued to press Ian Maxwell, Kevin Maxwell and Michael Stoney (managing director, finance, of MGN) for an explanation and the return of the funds until the supsension of the company's shares from listing in December 1991, when it became apparent the funds were irrecoverable.'