Nadir took pounds 450m from Polly Peck: Isle of Man documents show that accountants gave fugitive tycoon benefit of the doubt for a year

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The Independent Online
ASIL NADIR took up to pounds 450m from Polly Peck and paid it to another of his companies, Unipac, which made donations to the Conservative Party, confidential court documents show.

The documents, filed in the Isle of Man, also show that the fugitive tycoon was given a year's breathing space by accountants trying to reclaim assets of his former empire.

Affidavits sworn by administrators appointed to secure funds for creditors of Polly Peck show:

Nadir has never lost control of many of Polly Peck's businesses;

Information he supplied to the administrators was false;

They were prepared to wait a year before making legal moves in the hope of obtaining an out-of-court settlement;

They were obstructed in their efforts to trace Polly Peck assets in northern Cyprus.

In their affidavits, the accountants say they suspect that over the years pounds 450m of Polly Peck cash was salted away into Unipac, Polly Peck's fruit packaging company. It was Unipac that made donations totalling pounds 440,000 to the Tory party.

Sir Norman Fowler, the Conservative Party Chairman, has said the money will be returned - but only if it is proven to have been stolen.

The documents relate to the transfer of 32,000 shares in A & N Graphics, a Turkish subsidiary of Polly Peck, to Nadir, just four days before the administrators took over the running of Polly Peck in October 1990.

Nadir paid pounds 8m for the shares. But the money was immaterial: the shares gave him control of A & N, which, while it was officially described as a printing company, owned numerous fruit production and other businesses in Turkey and northern Cyprus.

The share sale was agreed at a hastily convened board meeting in Cyprus of another Polly Peck company. While Nadir was talking in public about putting together a bold rescue plan for his group, in private he was busily planning his future. Mentes Aziz, his close friend and personal adviser, voted through the sale. When Nadir fled to northern Cyprus last month, his businesses were ready and waiting for him.

Administrators, led by Michael Jordan and Richard Stone, of Cork Gully, and Christopher Morris, of Touche Ross, have made little headway in securing Polly Peck's assets since the group collapsed in October 1990. One reason appears to have been their willingness to give Nadir the benefit of the doubt, at least in the early stages of the collapse.

In an affidavit lodged in the Isle of Man, the administrators say that after obtaining interim orders against Nadir, the matter 'was left in abeyance for a year' to try to obtain an out-of-court settlement.

During that time, though, they were misled and given information 'which was false and was given for the purpose of distorting or concealing the truth'. The documents are silent on what Nadir was really doing during that period. The suspicion must be, however, that he was secretly consolidating his position through A & N Graphics in Turkey and northern Cyprus.

The disclosure that the administrators allowed Nadir a year's breathing space comes after criticism that they have not always secured the highest price for Polly Peck assets. Last October, they reportedly turned down an offer for a Polly Peck hotel that was pounds 4m higher than the bid actually accepted.

Last year, Mr Jordan and Mr Stone were each disciplined and fined pounds 1,000 by the Institute of Chartered Accountants for breaching guidelines, having taken on the Polly Peck insolvency when there was a potential conflict of interest. Coopers & Lybrand, which owns Cork Gully, had advised Polly Peck and Nadir on tax issues.

The affidavits make grim reading for Polly Peck creditors. Administrators talk of numerous Cyprus visits to trace company assets, of being frozen out of meetings, of being obstructed at every turn. One accountant, Stuart Christopher, complains of going to northern Cyprus eight times and returning empty-handed.

Mr Jordan, Mr Stone and members of the Polly Peck team were yesterday said by Coopers & Lybrand to be too busy to comment.

Nadir's brilliant coup, page 3