Charity ignored warnings about pounds 7m deal: Steve Boggan reports how the Salvation Army defied advice to avoid an investment scheme
Friday 26 February 1993
According to sources within the Salvation Army, all three lay members of the investment advisory board were voicing strong opposition to the deal from April to October last year, by which time officers secretly knew of the charity's disastrous involvement.
The Salvation Army's announcement last week that it had issued writs against the financier Stuart Ford, his company Tilen Securities, and Gamil Naguib, an associate, was the first the committee members knew of the charity's participation. Salvation Army sources have established that Mr Ford and Mr Naguib persuaded senior officers within the charity to allow them to invest millions in standby letters of credit, which can be traded at a profit. But the bank which supposedly issued the letters, the Islamic Pan American Bank, is untraceable and dollars 8.8m of dollars 10m (pounds 7.14m) entrusted to the two men has disappeared.
The group of three lay investment specialists - Dr Kevin Carter, group investments director of Providence Capital, John Padovan, former deputy chairman of Barclays de Zoete Wedd, and John Renshaw, former deputy chairman of John Laing - was first given details of Mr Ford's plans at its inaugural meeting last April and objected. It is understood Mr Renshaw and Mr Padovan wrote to the charity expressing doubts about the plausibility of the investment. Sources say Mr Padovan had run checks on Mr Ford and Tilen Securities and found that neither was registered with the Securities and Investment Board.
Dr Carter made his objections verbally and repeatedly, including during a meeting on 6 May 1992 when Mr Ford presented his plans, without documentation, in the presence of Col Grenville Burn, an officer responsible for fund-raising who has since been suspended. One or all members objected at meetings in April, May, July and October but permission is believed to have been given by Commissioner John Larssen, the UK Territorial Commander, to Col Burn and Col Ivor Rich, the business administration manager, to open an account at ASLK-CGER Bank in Antwerp with dollars 10m in charity funds.
Unknown to them, by September at the latest, the money had been moved to Banque Continentale du Luxembourg, from where all but dollars 520,000 had vanished. Even then, the advisers were objecting to the involvement of Mr Ford and Tilen Securities, but they were not told their objections were in vain.
'The first we heard that the deal was done was last week,' Dr Carter said. 'We had expressed our disapproval throughout . . . right up to October.'
A charity source said: 'Ford was promising returns of between 50 and 100 per cent per year by buying standby letters of credit at a discount before their maturity date and then holding on until they matured to gain the full return. The advisers said the scheme would not work; if making money was that simple, then we would all be millionaires.'
It is understood that about pounds 400,000 of the money has been invested in a Scottish airport project and about pounds 800,000 was used to refinance a hotel in the Kyle of Lochalsh.
- 1 The BBC has just done more to eradicate ‘terrorism’ than all our wars since 9/11
- 2 Does the path to true love really lie in these 36 questions?
- 4 Presidential optical illusion offers clues to how brain processes faces
- 5 Roald Dahl letter warning student to 'eschew beastly adjectives' rediscovered after 35 years
King Salman: Just five days in, Saudi Arabia's new king has already overseen a beheading
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Auschwitz liberation 70th anniversary: Woman sent to three Nazi death camps describes surviving gas chamber
Presidential optical illusion offers clues to how brain processes faces
Chilling drone footage captures Auschwitz ahead of 70th anniversary of liberation
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
Greece elections: Syriza and EU on collision course after election win for left-wing party
British Muslim school children suffering a backlash of abuse following Paris attacks
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
Louise Mensch says 'F**K YOU' in explosive tweets about David Cameron, Saudi Embassy and the Queen over King Abdullah tributes
£25000 - £40000 per annum: Recruitment Genius: This web-based lead generation ...
£125 - £150 per day + Negotiable: Tradewind Recruitment: A 'wonderful primary ...
£90 - £140 per day: Tradewind Recruitment: Our client is an 11-16 mixed commun...
£32000 - £36000 per annum: Recruitment Genius: A rapidly developing company in...