Botnar spent pounds 90,000 on Tory Savoy lunches: Trade ministers attempted to mediate with Nissan to save dealership business. Tim Kelsey and Michael Harrison report

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The Independent Online
THE LUNCHES were and still are a sumptuous affair. The Cities of London and Westminster Conservative Association meets annually at the Savoy Hotel. It is a forum for party fundraising and a platform for keynote political speeches.

Lord Parkinson, the former Conservative Party chairman, remembers that he spoke as guest of honour at least twice in the late Eighties. But he said yesterday that he did not know that Octav Botnar, the secretive Rumanian-born entrepreneur, was sponsoring his lunch.

Former business associates have confirmed that Botnar, now a fugitive from British justice living in Switzerland, sponsored four Savoy lunches to the tune of pounds 23,000 each. The Conservative Association has confirmed this, but drew a distinction between sponsoring the event and paying for the lunch. In either case, Botnar gave about pounds 90,000 to the Tories.

The last of these lunches, at which the late Lord Ridley was guest speaker, took place in early July 1991 - several weeks after the Inland Revenue raided the offices of his company, Nissan UK, Britain's largest distributor of foreign-made cars. A source close to Nissan UK said: 'Tory officials were quite happy about the lunch going ahead as the records would show it was sponsored by Automotive Financial Group Holdings (a sister company also controlled by Botnar) not Nissan UK.' A spokesman for the Conservative Association said he could not remember when Botnar's sponsorship had finished, but said it could have been 1991.

The sponsorship was in addition to the pounds 150,000 he gave as donations through the Channel Islands in the early Eighties. Lord Parkinson said yesterday that he did not meet Botnar during those years and as party chairman did not know at the time of any donations.

Lord Parkinson was not the only senior Tory to address the Savoy lunches. Others included the late Lord Ridley and Peter Brooke, now Secretary of State for National Heritage. But it does not include Lord Tebbit, who, like Lord Parkinson, had come to know Botnar while Secretary of State for Trade and Industry. It was during their terms of office that Botnar persuaded Nissan to build a factory in Britain and the two ministers played active roles in talks.

In early 1991 Botnar faced his worst commercial crisis when Nissan terminated his dealership contract. Botnar turned to these former political allies. Lord Parkinson confirmed yesterday that both he and Lord Tebbit had tried to intercede to ensure the survival of Botnar's company and end the dispute with Nissan. Lord Tebbit confirmed that he wrote two letters - one to Botnar and the other to Nissan - offering to mediate. He said this had nothing to do with Botnar's donations to Tory funds and that he 'can't remember if I was aware of those or not'. He said neither Nissan nor Botnar felt he could be of any help, adding that the letters were prompted by his concern at the commercial impact, not by a request from Botnar.

Lord Parkinson said: 'I was horrified to hear that his business was to close. I'm not sure if he approached me or I approached him. What Botnar did for Nissan was a fantastic success story.' He said he could not remember if he wrote to Nissan on Botnar's behalf. 'By the time I spoke with him, it was done with. Legal action was inevitable.' He said his interest in Botnar's survival had not the 'slightest party context'.

Like Asil Nadir, Botnar was able to make contacts that extended a long way up the Tory party. Botnar met Margaret Thatcher on several occasions. His relationship went back to the Seventies when he was fighting for a less protectionist attitude to car imports.

One adviser remembered that some of his tactics for gaining influence were clumsy, to say the least. On one occasion, he openly suggested that he should find a 'gift' for a senior diplomat and former government minister, then based in Tokyo. The adviser quickly told him that 'this would create entirely the wrong impression'. Like Nadir, Botnar found donations a more appropriate means of acquiring influence. Unlike Nadir, he did not do so for a knighthood.

The Parkinsons also came to know Botnar as a charitable giver. Lord Parkinson was asked by the Great Ormond Street children's hospital, in London, to see if Botnar would contribute. He gave pounds 8m in 1990. Botnar set up a charitable foundation in memory of his daughter Camelia who died in a road accident

in 1975. He has donated more than pounds 80m to it since the mid-Seventies.

But the business that had made him one of the country's richest men failed in December 1990, when after a long and public row, Nissan terminated his exclusive contract to distribute their cars in the United Kingdom.

The business was worth about pounds 1bn annually. He won a pounds 7m compensation award from the High Court against Nissan afterwards.

In spite of living in Switzerland, Botnar has retained formal control of AFG, the company that replaced Nissan UK. The ultimate holding company of Automotive Financial Group Holdings is G F International Finance and Investments, which is incorporated in the Bahamas. This company is in turn controlled by a charitable trust set up in 1974 by Botnar.

(Photograph omitted)

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