Top City firm in 'bribes' blunder: Turks question Polly Peck administrator after memo is leaked
A leaked document in the possession of the Independent refers to the prospect of paying 'bribes' in connection with the sale of Polly Peck assets. The confidential document is an internal memorandum written by a partner at the London headquarters of Coopers & Lybrand, the UK's largest accountancy firm.
The document, which a spokesman for Coopers confirmed last night was genuine, urges that the deal - 'bribes' apparently included - should go ahead. The spokesman said the reference to 'bribes' was 'a very loose use of language in an internal memo,' adding that the three Coopers' partners who are administrators of Polly Peck had 'never made illegal payments' during their investigation.
However, the document is bound to cause serious embarrassment. Insolvency fees account for about pounds 74m of Coopers' total annual fee income of pounds 553m.
It is understood that a copy of the document was passed to the Istanbul public prosecutor, who interviewed Michael Jordan, a Coopers' senior partner and one of the administrators, and David Kidd, his legal adviser. The two were in Turkey pursuing legal action for recovery of assets.
Their passports were confiscated on Wednesday night and they were interviewed by the prosecutor yesterday. It is not clear whether they were formally detained. They were not arrested and following the three-hour interview were given their passports back. The two cut short their trip to Turkey and were said to be on their way back to the UK last night.
Coopers said last night that the document had been passed to the Turkish authorities by Nadir, who is charged with theft and false accounting involving more than pounds 30m and is living in Turkish northern Cyprus. That was confirmed by Nadir but it was not clear how he came by it.
The document, a four-page memo dated 16 December 1991, is signed by a Coopers partner, Stuart Smith. It outlines a discussion between a former director of one of Nadir's companies, AN Graphics, members of Coopers and legal advisers including Mr Kidd. The discussion centred on hopes of recovering a valuable printing press that belonged to a former Nadir company but was being held by Istanbul customs. The memo indicates that a third party called DER had offered to buy the equipment for 1.2m German marks ( pounds 500,000) but DM300,000 would have to be deducted from that for various costs incurred in releasing it from customs.
Among those costs Mr Smith identifies: 'Other customs/handling costs and bribes'. It is not stated how much of the DM300,000 is for bribes or to whom they are to be paid.
Mr Jordan, 62, is one of the most flamboyant - and controversial - of insolvency practitioners. Although he keeps a London flat, his main home is a farm in Buckinghamshire. There, he keeps a Bentley Turbo, although he travels to work in a chauffeur-driven company Volvo. 'My predecessor used to turn up at the factory gates in a Rolls-Royce and smoking a cigar. I never thought that was quite right.'
In the 1960s he joined the then doyen of receivers, Sir Kenneth Cork, at Cork Gully and when Sir Kenneth retired Mr Jordan became head of the firm and led it into the arms of Coopers & Lybrand. He kept its name separate until recently.
The leak of the 'bribes' memo is bound to have widespread ramifications. Last year, he and his fellow administrator Richard Stone were each fined pounds 1,000 and reprimanded by the Institute of Chartered Accountants for accepting the Polly Peck appointment when their firm had a potential conflict of interest through advising the company or Nadir in the previous three years.
Mr Stone, head of corporate finance at Coopers, is one of the candidates for the firm's senior partnership, which is to be announced later this month.
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