Son 'thought scheme to boost shares was legal'

The Maxwell Trial; Day 95
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The Independent Online
Kevin Maxwell spent more time watching Oxford United play football than he did on pension fund business, he admitted yesterday.

"Do you regard that as disgraceful?" asked Alan Suckling QC, prosecuting at the Old Bailey.

Although Mr Maxwell, then chairman of the club, denied this, he said that if he could turn the clock back there were a lot of things he would have done differently. "There is a lot I regret about my conduct."

In his 13th day in the witness box, he admitted that he spent about 30 minutes a week on Bishopsgate Investment Management (BIM) business, involved in the administration of pension funds.

Quizzed by Mr Suckling as to whether he had ever studied Imro's rules on pension funds he admitted: "I am afraid I did not ... I relied on others." He delegated the implementation of the rules to BIM.

Mr Maxwell and Mr Suckling frequently clashed during the hearing, first of all when the prosecutor questioned him about the meaning of trust in relation to the pension funds.

Mr Maxwell said he did not know the legal meaning of the word trust but he agreed that he knew the funds were being held for the benefit of the pensioners and for no one else's, and that he had a duty to act as a BIM director with that in mind.

Dealing with a share support scheme mounted by his father to fend off what he perceived as an organised bear raid on Maxwell Communication Corporation (MCC) shares, Kevin Maxwell said he had been told the scheme was legal.

It involved channelling money from MCC through the Robert Maxwell Group to offshore funds to buy back MCC shares in the hope of pushing up the price.

Up to pounds 150m had been spent on share support and the other directors had not been told about it although his father had told him he had taken advice and it was legal. When Mr Suckling suggested the reason that the tycoon had not told his directors was that he would not dare, his son replied: "I don't think my father was afraid of anyone or anything ... he just didn't think he needed to explain."

Kevin Maxwell said he too had sought advice about the scheme but admitted he had not revealed the full details of it to the lawyer he consulted.

Mr Suckling asked: "Did you have something to hide?" Mr Maxwell said: "No, on the contrary, you don't go to a lawyer to seek advice on what you are worried about if you are hiding something." Pressed on whether he gave his lawyer all the details, he said: "Mr Suckling, I haven't come here to pull the wool over your eyes or anyone else's eyes. I take very seriously the process of giving evidence and I am not lying to you."

He told the court that in his view his father's decision to use private money to support MCC in its difficulties was "ultimately lethal". He had argued against it but his father was unmoved.

He denied the suggestion that the group was in "desperate straits" in 1991. Although there were liquidity problems and it was "going through choppy water" the group's assets were worth billions. Before the crash his father's holdings were worth more than pounds 1bn.

Brothers Kevin and Ian Maxwell and Larry Trachtenberg deny conspiracy to defraud the pension funds by misusing shares. The case was adjourned until today.

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