Three jailed for mining swindle

Thursday 21 May 1998 23:02

THE BANKRUPT entrepreneur Clive Smith was further shamed when he was jailed for three years yesterday for swindling investors in the pounds 60m flotation of Butte Mining.

Two other leading lights in the Montana-based mining company, John Clarke and Dr Kenneth Clews, were also imprisoned after a marathon 11 month trial - Clarke for three years and Clews for 18 months.

Once a powerful City figure, Smith was the "driving force" behind the public company founded to exploit gold, silver, and base metal ores.

He was then able to influence Butte decisions - including the sale of assets he owned to the company - after binding his co-defendants with golden handcuffs, the secret "gift" of shares. But the Old Bailey heard Smith hid his promotion of the flotation from the Stock Exchange by using a front company, Finchley Investments.

A web of offshore trusts and companies ensured the massive shareholdings in Butte owned by Smith, Clarke and Clews were never revealed to investors.

Passing sentence, Mr Justice Newman said the fraud was so serious only a jail sentence could be justified. The judge also ordered Smith and Clarke be disqualified from being company directors for five years from today. Until March this year, Smith had been under a two-year DTI ban for his running of a Scottish company, Paxton Investments.

- Agencies

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