MTM's founder jailed for two years for fraud

Richard Lines, the founder and former chairman of MTM, which was once the UK's second-largest fine chemicals company, was jailed for two years yesterday for fraud which wiped pounds 250m off the company's share price in 1992.

Lines, 60, was also disqualified from acting as a company director for five years. Thomas Baxter, 45, the former finance director, was jailed for six months and disqualified from acting as a company director for two years.

Jailing Lines, Judge Grigson said at the Old Bailey: "Ambition motivated him, not greed, but he persistently and deliberately proved to be dishonest." The judge told Baxter he had failed in his duty.

Lines, of Great Ayton, Cleveland, set up MTM in 1984 after 11 years at ICI and before that a 15-year career in the Royal Navy. Through MTM he made millions and in 1991 he took home pounds 3m after selling shares in the company with which he bought a pounds 1.8m farm in north Yorkshire. He was also awarded an OBE.

The company commissioned a book to tell the story of its rapid growth for which Sir John Harvey-Jones, the former head of ICI, wrote the foreword.

MTM was floated on the Stock Exchange in 1986 after which it made a series of global acquisitions to become, by 1991, the second-largest fine chemicals company in the UK.

The two men were convicted in December on charges brought by the Serious Fraud Office and North Yorkshire Police fraud squad.

Lines was convicted of two offences of conspiring to account falsely and one offence of making misleading, false or deceptive statements. Baxter was convicted of one count of conspiracy to account falsely and another of making misleading, false or deceptive statements. He was acquitted on a further account of conspiring to account falsely.

The SFO's investigation began after the collapse of MTM's share price in March 1992 from 226p to as low as 25p. Baxter and Lines lied to analysts and investors about the the true state of the company's financial health just days before it issued a profits warning.

The prosecution also argued that Lines took advantage of the previously buoyant share price to fund the acquisition of Hardwicke Chemicals in 1990 and by selling shares after key announcements containing false information as to the profitability of the company.

"Mr Lines' elaborate schemes to falsely enhance the company's share price led to its collapse with a loss of pounds 250m. In putting his dishonest plans into effect, he also corrupted several of his employees," said Stephen Myers, the SFO lawyer in charge of the case.

"Not only did institutions and pension funds lose money but so did small investors who could ill afford the loss," said Mr Myers.

ebookA unique anthology of reporting and analysis of a crucial period of history
Luis Suarez looks towards the crowd during the 2-1 victory over England
Life and Style
Cheesecake frozen yoghurt by Constance and Mathilde Lorenzi
food + drinkThink outside the cool box for this summer’s frozen treats
John Barrowman kisses his male “bride” at a mock Gretna Green during the Commonwealth Games opening ceremony
peopleBarrowman's opening ceremony message to Commonwealth countries where he would be sent to prison for being gay
Sir Bradley Wiggins removes his silver medal after the podium ceremony for the men’s 4,000m team pursuit in Glasgow yesterday
Commonwealth games Disappointment for Sir Bradley in team pursuit final as England are forced to settle for silver
Alistair Brownlee (right) celebrates with his gold medal after winning the men’s triathlon alongside brother Jonny (left), who got silver
England's Jodie Stimpson won the women’s triathlon in the morning
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

Trade Desk Specialist (Linux, Windows, FIX, Finance, Networks)

£60000 per annum: Harrington Starr: Trade Desk Specialist (Linux, Windows, FIX...

Associate CXL Consultant

£40000 - £60000 per annum + BONUS + BENEFITS: Harrington Starr: CXL, Triple Po...

Project Manager - ETRM/CTRM

£70000 - £90000 per annum + Job Satisfaction: Harrington Starr: Project Manage...

C#.NET Developer

£300 - £350 per day: Harrington Starr: C#.NET Developer C#, WPF,BLL,MVVM, SOA...

Day In a Page

Backhanders, bribery and abuses of power have soared in China as economy surges

Bribery and abuses of power soar in China

The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

Highland terriers steal the show at opening ceremony

Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
German art world rocked as artists use renowned fat sculpture to distil schnapps

Brewing the fat from artwork angers widow of sculptor

Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

BBC takes viewers back down memory lane

The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

Nicolas Cage shines in low-budget drama Joe

Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

Make your own ice lollies and frozen yoghurt

Think outside the cool box for this summer's tempting frozen treats
Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

Fiesta is UK's most popular car of all-time

Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride
10 best reed diffusers

Heaven scent: 10 best reed diffusers

Keep your rooms smelling summery and fresh with one of these subtle but distinctive home fragrances that’ll last you months
Commonwealth Games 2014: Female boxers set to compete for first time

Female boxers set to compete at Commonwealth Games for first time

There’s no favourites and with no headguards anything could happen
Five things we’ve learned so far about Manchester United under Louis van Gaal

Five things we’ve learned so far about United under Van Gaal

It’s impossible to avoid the impression that the Dutch manager is playing to the gallery a little
Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

Screwing your way to the top?

Good for Lana Del Rey for helping kill that myth, says Grace Dent
Will the young Britons fighting in Syria be allowed to return home and resume their lives?

Will Britons fighting in Syria be able to resume their lives?

Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

Beyoncé poses as Rosie the Riveter

The wartime poster girl became the ultimate American symbol of female empowerment
The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

The quest to find the perfect pair of earphones

Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

Meet the US Army's shooting star

Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform