I want to repay pension victims, says Maxwell

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The Independent Online

Kevin Maxwell pledged to compensate victims of the pensions scandal uncovered by the collapse of the business empire run by his father Robert - if his own latest venture is a success.

Kevin Maxwell pledged to compensate victims of the pensions scandal uncovered by the collapse of the business empire run by his father Robert - if his own latest venture is a success.

Mr Maxwell has built up a new business, Telemonde, which sells on telecommunications capacity, and which he will shortly take to the New York-based Nasdaq hi-tech stock market.

Mr Maxwell said he felt for the Maxwell pensioners who lost money in the collapse of his father's business empire.

"The moral burden that I bear, I will bear for the rest of my life. It doesn't go away," he told the BBC Radio 4 Today programme.

"The fact that technically, my bankruptcy has been discharged, and I'm not legally responsible, in no way minimises the moral burden that I carry.

"At the present moment I'm not in any condition to make a contribution, large or small, but obviously I hope that in the future I may well be.

"Yes, I hope to be in a position to do something."

Mr Maxwell acknowledged that the collapse of his father's business empire was a "debacle and catastrophe" which had hurt thousands of people.

Robert Maxwell's business empire started collapsing immediately after his body was found floating in the Atlantic off the Canary Islands on November 5, 1991.

Within less than a month, the Serious Fraud Office was investigating the management of the Mirror Group pension fund and the company's finances. Up to £400 million was thought to have been diverted from the pension fund as unauthorised loans to Robert Maxwell's private companies.

In April 1992, payments to the 240 members of the Headington Pension Plan, which was linked to a private Robert Maxwell company, were stopped.

The following month, the trustees of the Mirror Group pension scheme began proceedings against five banks and financial institutions to try to recoup £88 million diverted by Robert Maxwell.

Three days later, as the fall-out from the scandal continued, the Government pledged £2.5 million to ease the plight of Maxwell pensioners and announced a thorough review of Britain's 400,000 occupational pension schemes.

In January 1996, Kevin Maxwell and his brother Ian were cleared of charges that they were involved in a £122 million conspiracy to defraud company pensioners after an eight-month trial. Larry Trachtenberg, a former financial adviser to Maxwell companies, was also cleared of all charges.

Kevin Maxwell said full details about his background were available to potential investors in his new venture.

"We have recently filed a full public disclosure and in that document, the fact that I was bankrupted and that my bankruptcy has been discharged, and the fact that I faced criminal charges and was acquitted is a disclosure in that document. I have nothing to hide."

He was floating his new venture in New York rather than London for sound business reasons, and not because of his reputation in Britain, he went on.

"The reason that we selected Nasdaq has everything to do with the market liquidity, the size, and the valuations that telecoms companies attract," he said.

The new venture had itself had problems, Mr Maxwell acknowledged. It was reported this week that it had defaulted on millions of dollars of due payments.

But Mr Maxwell said: "During the start-up phase we have experienced some real difficulties in terms of honouring contracts entered into with suppliers.

"The bottom line is that we did pay those suppliers some 40 million over the period, we have renegotiated to pay them an additional 80 million over the next year, and we are very very confident about our ability to honour those obligations."

He acknowledged that the pensioners' assets were misused, although he insisted his actions had not been criminal.

Asked whether he was making a firm pledge to try to compensate the Maxwell pensioners, if he should find himself in a position to do so, he said: "It is a pledge ... If I'm in a position to make a contribution, I would like to be able to. But I'm not in that position today".

Mr Maxwell's pledge to help compensate victims of the Mirror Pensions scandal came a day after it emerged that Telemonde was in danger of collapse.

The company, of which Mr Maxwell is chairman and part owner, reported it was in urgent need of bank support to pay its debts.

The group has defaulted on £54 million worth of scheduled debts payments and warned in documents filed with United States regulators that its future was in question.

The documents admitted there was "substantial doubt about the ability of the company to continue as a going concern if it fails to raise additional debt and equity financing".

The company creditors include the telecoms giant MCI Worldcom.

Telemonde has its headquarters in New York.