Trinity's directors believe the loans were inappropriate and were not made on normal commercial terms. The loans contributed to Trinity's loss of pounds 80m in 1991. Price Waterhouse, Trinity's provisional liquidator, is considering legal action against some of the insurer's former directors.
From January 1990, Trinity made pounds 7m of loans to Panfida, the Australian group that used to own the Martin chain of newsagents. In February 1990, Mr Murdoch's News International agreed to inject pounds 40m into Panfida and Martin. This investment meant News International had a near-30 per cent stake in Panfida when it went bust a year ago.
Trinity was controlled by Grant Fowler, who is married to Mr Murdoch's niece. Trinity had financial dealings with the Murdoch family's companies. Mr Fowler is believed to be in the US.
Policyholders next month will be asked to approve a scheme of arrangement by Price Waterhouse. Creditors will be offered an initial payout of 10 per cent, with the prospect of an eventual 60-70 per cent. Private policyholders are covered by the Policyholders Protection Board.Reuse content