Robert Maxwell and his son Kevin deliberately used shares they knew belonged to the pension fund to support the selfish interests of the private Maxwell companies, a jury was told yesterday.
On the first day of the prosecution's closing speech, Alan Suckling QC, told the Old Bailey that pledging and selling the shares "was not in the pensioners' interests. It was a sheer gamble, was it not, a gamble with other peoples' assets".
By July 1991, father and son knew the Robert Maxwell Group was in desperate financial straits, so they used pounds 100m of shares in the Israeli company Scitex, which they knew belonged to the pension fund, to stave off the crisis.
Mr Suckling said they knew they were putting the pension fund at risk by pledging the shares against bank loans and selling them to pay private company debts. They knew they were acting dishonestly and as the crisis deepened Kevin lied to and misled banks to secure more time and support.
When father and son decided to use the Scitex shares, it was not in the interest of the pension fund, he said. "The truth is they didn't care. They were only interested in saving the Maxwell empire. You have heard of some of the earnings they earned but of course that is not the whole story, is it? The Maxwell empire gave power and created wealth and it cannot have been a desire to lose that. It was to save all that, was it not, that pension fund shares were used in this way. The motive was that they had to."
Kevin Maxwell, his brother Ian, and Larry Trachtenberg, a former Maxwell financial adviser, deny conspiracy to defraud by misusing pounds 22m worth of shares in Teva, another Israeli company. Kevin alone denies a similar charge of conspiring with his father in relation to the Scitex shares, and it was this charge that Mr Suckling concentrated on yesterday.
He reminded the jury that Kevin, during his evidence, had admitted lying to banks. He also said that no doubt Imro, the City investment regulator, and Coopers & Lybrand could have been more vigilant, but none of the professionals knew the whole picture of group debts.
The trial continues today.