Fall of a tarnished grandee: Steve Boggan and Michael Prestage trace the career of Sir Edward Du Cann, the Tory haunted by debt

Click to follow
The Independent Online
LAWYERS for Sir Edward du Cann, the Conservative Party's former chairman, attempted yesterday to annul his bankruptcy, writes Michael Prestage.

At Taunton County Court, Somerset, a district judge agreed to allow an 'individual voluntary arrangement' to be put to creditors. This is a legal procedure by which an insolvency practitioner draws up a plan of action that allows an agreed percentage of the debts to be paid. Sir Edward was not present at the hearing.

He was made bankrupt by his former solicitors, the London practice of Denton, Hall, Burgin and Warrens, to whom he reputedly owes more than pounds 250,000. There are many other creditors, including the Inland Revenue.

The creditors must now meet and if 75 per cent of them decide to accept the arrangement the bankruptcy will be annulled. But if Sir Edward fails to keep up the payments, or if a creditor comes forward not in the original petition, then he can be bankrupted again.

Sir Edward's solicitor, Peter Saunders, said: 'It was always the intention of Edward du Cann that all payments would be made. The bankruptcy order was made without his knowledge and he didn't attend (the court hearing).'

He said that Sir Edward had been tied up with the Department of Trade and Industry inquiry into Homes Assured. He was deputy chairman in 1988 and the company was accused of pressuring council tenants to buy their homes and take up mortgages. It collapsed later, owing pounds 10m. Mr Saunders said the Homes Assured affair had become 'unreasonable' but he could not comment further.

BARONESS THATCHER, the former prime minister, is rumoured to have complained that Sir Edward du Cann, then chairman of the 1922 Committee of backbench MPs, enjoyed a higher profile than she did.

'Edward's office is bigger than mine,' she is reported to have told a fellow Tory.

Former chairman of the Conservative Party; the 1922 Committee; Lonrho (on a salary of pounds 410,000 a year); the Public Accounts Committee; Keyser Ullman merchant bank; former managing director of Unicorn Securities, a successful unit trust company. It seemed he had it all. So where did it go wrong?

When he was Economic Secretary to the Treasury in 1963, a young Edward du Cann complained that he was unable to live on his salary of pounds 75 a week, then a very substantial wage. In 1967, he set out his financial stall in an article for a newspaper. 'I am a great believer in borrowing money . . ,' he wrote.

'The trouble is that most people let money be their master when it should be their servant. We are extravagant, I suppose. We could go to Joe Lyons, but we prefer the Mirabelle.'

In March, Sir Edward was declared bankrupt. Yesterday, his creditors met the official receiver. The day before, his 15th century home, Cothay Manor in Wellington, Somerset, was put up for sale. Somewhere, between the precocious pontifications of a rising star in the 1960s and the humiliating events of 1993, the seeds of his downfall were sown.

Edward Dillon Lott du Cann KBE, born in 1924, began making serious money in the late 1950s when, in partnership with Peter Walker, now Lord Walker, he formed Unicorn Securities, the first new independent unit trust launched after the relaxation of financial restrictions in 1953. Within four years Unicorn had more than 150,000 investors and pounds 19m assets.

Sir Edward remained chairman until 1972, through transfers of ownership to Martins Bank and Barclays Bank. Now called Barclays Unicorn, it has assets of pounds 2.63bn and more than 200,000 investors. Unicorn led him along a path that proved more hazardous.

Because of his links with Martins, as a director, he joined the board of the merchant bank Keyser Ullmann and later, when Keyser Ullmann began banking for Lonrho, he became a Lonrho director, ostensibly as political fixer for Tiny Rowland. Mr Rowland believed his political nous would be vital in his wrestle with the Al-Fayed brothers for control of House of Fraser, but many of his contemporaries believe he over-estimated Sir Edward's influence, particularly after he left Parliament in 1987.

In 1973, having invested heavily in Keyser Ullmann, Sir Edward authorised a pounds 17m loan to Christopher Selmes, a 28- year-old entrepreneur, which was secured on a worthless guarantee. Selmes later left the country without discharging the debt, leaving the bank on its knees. Sir Edward resigned, owing the bank sums rumoured to range from pounds 500,000 to pounds 1m. The Department of Trade and Industry described him and his fellow directors as 'incompetent'.

Sir Edward never quite recovered from his Keyser Ullmann losses. Those, coupled with capital gains tax demands from the 1979 sale of Cannon Assurance shares reportedly running at pounds 300,000, broke him, despite his pounds 410,000 salary from Lonrho. He resigned that position in 1991, in the face of moves by the DTI to disqualify him from holding directorships. This seems to have been the last straw.

Any hopes he may have had of rebuilding his fortune had been dashed by the DTI action. That was initiated against him and six other directors of Homes Assured, a mortgage endowment policy company, two years after it collapsed owing pounds 10m to 1,500 creditors. He joined the board in January 1988 and resigned on 16 August 1989, just 15 days before it went into liquidation.

Even before the Homes Assured debacle, Sir Edward had developed a reputation as a spendthrift who did not pay his debts. In 1980, he was sued by a boat company that alleged he failed to pay commission on the sale of his yacht Blue Swan. In 1984, Ove Arup, the consulting engineers, sued for payment for a survey carried out on his estate. The Inland Revenue began chasing him in 1985 for non-payment of the pounds 300,000 tax on his Cannon Assurance shares. Instances of several bounced cheques were aired publicly. In one particularly embarrassing instance, the floor of the House of Commons was used by a Labour MP to highlight a cheque that had not been honoured.

In 1985 and 1986, Eagle Star began proceedings three times to repossess Cothay Manor, which Sir Edward had mortgaged to the company in 1983. Each time, the arrears were paid at the eleventh hour. Cothay Manor is now up for sale, priced at pounds 850,000.

Last year, Tremlett Hall Farm and 300 acres of his 330-acre estate were repossessed by the Leeds Permanent Building Society. Sir Edward tried and failed to buy them back. As the debts mounted, the former Tory party chairman repeatedly told creditors that he was owed money from the sale of land to an Arab. But the money never came in.

A farm manager living near Cothay Manor said Sir Edward was 'infamous in the area for not paying bills'.

John Hill, owner of Culm Valley, an agricultural buildings constructor, is owed pounds 3,000 plus interest for building work partly completed at Tremlett Hall Farm before it was repossessed. He stopped work when the first and second interim payments failed to arrive. Despite promises since, the money still has not been forthcoming.

Mr Hill, who is not listed as a creditor in the bankruptcy action, said of Sir Edward: 'He is what we call a 'slow payer' and he has run into financial problems in the past.'

Jim Miller, finance director of Finlease, a Peterborough-based finance company, is less understanding. A subsidiary of his firm is owed pounds 280,000 after entering a deal with Sir Edward in 1989 which involved buying his farm machinery and reproduction furniture at Cothay Manor then leasing them back to him. 'It was always 'Old Boy' this and 'Old Boy' that, and worthless promises to pay up next week,' Mr Miller said.

(Photograph omitted)