Resort Hotels chief jailed for eight years
Wednesday 02 April 1997
The conviction is an important success for the Serious Fraud Office (SFO), which fought the case, coming after years of high-profile failures like the Maxwell case.
It is also likely to have repercussions for Coopers & Lybrand, the reporting accountants on Resort's rights issue in 1992. The trial judge, Mr Justice Zucker, said during his summing up at Middlesex Guildhall Crown Court that there was evidence of negligence by Coopers.
Feld, 45, was convicted of three offences of making false statements in financial documents and nine offences of using forged documents. Four other fraud offences were ordered to remain on file. He was also disqualified from acting as a company director for 10 years.
The verdict brings to an end Feld's luxury life style, which included two properties in East Sussex, one in Knightsbridge, and a fourth in the south of France. He also had a yacht moored at Beaulieu-sur-Mer, France during his rapid rise to prominence in the 1980s.
The case was investigated by the SFO with the assistance of a team from the Sussex Police Fraud Squad. The probe centred on the false picture that Feld presented of Resort's financial position in 1992 when he launched the pounds 20m rights issue.
Feld had quickly built the hotel chain up to over 50 properties, largely through rights issues, which cumulatively attracted over pounds 50m from shareholders. He used forged documents to mislead Coopers and merchant bankers Barclays de Zoete Wedd as to the company's expected profits and its level of debt.
The issue was a success but one year later Resort's shares were suspended. Receivers from Ernst & Young were sent in on 1 June 1994, when the company's debts stood at pounds 140m.
Feld was arrested and in December 1994 he was charged with 16 fraud offences. His trial started last November.
Mr Anthony Evans QC, for the prosecution, described Feld as a "hungry" borrower. He told the jury: "Robert Feld was the driving force behind the business.... He was Resort Hotels." Documents were forged by Feld or on his instructions, and shareholders were induced to part with pounds 20.6m.
Feld's story started in Brighton, where his parents were hoteliers. He started working for them in 1972 after dropping out of university and became a partner in the family business four years later.
In 1983 he formed Norfolk Resort Hotel, and bought the family partnership and Preston Continental Hotel (Brighton), a company formed by Feld and his sister in 1980. He raised money from the Business Expansion Scheme (BES).
Feld gained greater access to finance by gaining admission to the Unlisted Securities Market, the precursor to AIM, in 1988, and a full listing later in the 1980s. By that time Feld had changed the company's name to Resort Hotels, and was concentrating on three-star hotels and the business and conference trade.
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