The record rise and staggering fall of Nadir's empire

 

Asil Nadir built Polly Peck International from a small fruit trading business into one of the biggest conglomerates in Europe.

Until its collapse in 1990, Polly Peck was the stock market's fastest growing company.

An investment of £1,000 made in Polly Peck in the late 1970s would have been worth £1 million at the height of its success.

But the dream turned sour and the company collapsed owing £550 million.

Amid plummeting share prices and insider dealing allegations, Nadir fled the UK in 1993 as he was due to stand trial for theft.

He took a late-night flight by private plane to Northern Cyprus and remained there, beyond the reach of the UK authorities, until his return in 2010.

Nadir was born in Cyprus in 1941, the son of a Turkish Cypriot businessman who moved his family to Britain in the 1950s.

In the late 1970s, Nadir took control of listed shell company Polly Peck, and used his stock market status to raise the cash to set up a Northern Cyprus fruit-packing subsidiary, Sunzest, and Unipac, a cardboard box factory, via a share issue.

During the next four years, Polly Peck expanded into consumer electronics and hotel franchises as well as fruit and vegetable packing.

In 1983, the share price crashed, after hitting a high of £35, after rumours circulated that the Turkish authorities were about to withdraw vital tax concessions.

But by 1990, the share price had recovered and sent the company's value rocketing.

Some 70% of the profits recorded at Polly Peck's head office in London supposedly came from the Turkish and Cyprus operations, but few Polly Peck executives understood exactly how they continued to rise steadily.

Bank mandates allowed Nadir and his directors to make payments on the strength of a single signature, a highly unusual facility for the heads of a public company to have.

In 1989, Nadir did the deal that should have secured his status as a major international player, when he raised £577 million to buy Del Monte.

The acquisition made Polly Peck the world's third-largest fruits distributor, but caused trouble for the group's already complicated cash flow.

In summer 1990, persistent rumours about manipulation of Polly Peck's share price reached an intensity where they could not be ignored by City authorities, including the Serious Fraud Office.

As the City's investigation was getting under way, Nadir called a board meeting to propose that he bought back the 75% of Polly Peck shares he did not already own.

But five days later, he withdrew the proposal just as abruptly, and in doing so called down the wrath of the Stock Exchange upon his head.

The Stock Exchange alerted the Department of Trade and Industry as well as the SFO, and his creditor banks began to dump shares to try to redeem some of their loans, causing the share price to collapse once again.

The banks appointed auditors, who tried unsuccessfully to get the paperwork on Nadir's Turkish operations.

That goaded the banks into pressuring the board to put the company into liquidation, which is what happened in October 1990.

In 1994, Polly Peck's creditors were told they were likely to get only a fraction of the £550 million they were owed, somewhere between £15-£55 million. Shareholders got nothing.

PA

Start your day with The Independent, sign up for daily news emails
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before