View from City Road: Pointless pursuit of Polly assets

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The Independent Online
It is about time Polly Peck's creditors put an end to the expensive farce that is the administration of the collapsed conglomerate and the seemingly interminable civil pursuit of the bankrupt Asil Nadir and his associates. Continuing to pursue the issue is undoutedly good business for at least three sets of accountants - Coopers & Lybrand and Touche Ross, the joint administrators of Polly Peck, and Robson Rhodes, Nadir's trustee in bankruptcy, as well as assorted lawyers, airlines, hotels and the like.

Yet the law of diminishing returns began to operate in this area some time ago. Even supposing the administrators could have got their hands on the few tangible assets left in northern Cyprus and Turkey, it must seriously be doubted that they would now be worth the price of the plane ticket to look at them.

The assorted citrus groves, three hotels and print works in northern Cyprus had a book value of about dollars 40m, according to the last set of accounts. But they are probably worth a good deal less.

Even if they did have a significant value, the moment Nadir flew into Cyprus the administrators' chances of recovering them flew out. It is the same story when it comes to the personal litigation against Nadir (against whom a writ for pounds 378m is outstanding) and the pounds 73m judgment against his mother, both safely ensconced in the pariah state of northern Cyprus.

By last November the administrators had clocked up expenses of more than pounds 15m, plus pounds 10m in 'legal and professional' fees. The next figure is likely to show total costs of more than pounds 30m. That amounts to costs of more than 2p in the pound as far as the creditors are concerned. This compares with the 0p to 10p returns that the administrators admitted last November were the upper and lower range that creditors could reasonably expect to date.

Bankers have a habit of refusing to face reality. That is how they got into this mess in the first place. It is time now for them to bite the bullet.

It seems pointless to keep spending money simply to find out what they must know in their hearts anyway. Polly Peck was a South Sea bubble company. When it burst, the creditors were left clutching at the air.