A "star chamber" agreement was made to keep the police out of the investigation into Guinness's 1986 multi-billion pound take-over of Distillers, the Court of Appeal was told yesterday.
On the first day of the appeals of the four men convicted in the Guinness affair, counsel for Ernest Saunders, the former chief executive of Guinness, said the "crux of this case" would be that Department of Trade and Industry inspectors in effect became "evidence gatherers" for a prosecuting team that deliberately excluded the police because they had less investigative power than the inspectors.
Jonathan Caplan QC said that documents disclosed this year - five years after the first Guinness trial - had revealed what he called a "shameless fishing expedition".
In 1986 the DTI first appointed inspectors to investigate Guinness's affairs. The appointments were essentially government-ordered and investigated concerns that "concert party" activities centring on an illegal share support scheme had assisted Guinness in the takeover of Distillers. According to Mr Caplan, the disclosed documents showed that the DTI inspectors were regarded as "more efficient" in uncovering facts than the police; and that the police, at key stages of the investigations, were "kept out" because they had fewer powers than the inspectors.
Under the law at that time, the inspectors had the power to compel those they interviewed to give answers and that failure to do so could end in imprisonment. The legal privileges of avoiding self-incrimination and the right to silence were thus denied by failing to bring in the police at an appropriate time, said Mr Caplan.
In 1990 Mr Saunders, along with the property tycoon, Gerald Ronson, and a former stockbroker, Anthony Parnes, all received jail sentences over their involvement in the share price support scheme. The fourth man, Jack Lyons, a leading consultant, received a pounds 3m fine and was stripped of his knighthood.
The appeals - estimated to last a month - are expected to be based on the appellants' claims that they were denied their rights to silence and that the Serious Fraud Office also withheld key evidence from defence counsel.
The appeal is the latest legal battle in the Guinness saga that is so far estimated to have cost the taxpayer pounds 27m.
In court yesterday before the Lord Chief Justice, Lord Taylor, Mr Justice Macpherson and Mr Justice Potter, Mr Caplan argued that as there was a criminal prosecution of people involved in the Distillers take-over, then it was wrong for the DTI inspectors and not the police to be involved.
Lord Taylor suggested that Mr Caplan was "sitting on a very narrow fence". He said that all except Mr Saunders were arguing that even when all information was finally gathered there was still no case to argue.
Mr Caplan was highly critical of meetings between the DTI inspectors and the Office of the DPP which took place between December 1986 and March 1987. "We criticised the fact that the inspectors were meeting the prosecution and discussing prosecution matters such as witnesses and evidence. These should never have taken place ... This is the business of the prosecution not the business of company inspectors."
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