Fugitive Cypriot funded Mandela visit: 60,000 pounds contribution for ANC leader's visit was sought by senior Labour Party figure

CHARILAOS COSTA, the Greek Cypriot businessman who fled charges of fraud two years ago, paid pounds 60,000 to help to fund a UK visit by Nelson Mandela at the request of a senior Labour Party figure.

The Independent has learnt that the money contributed by Costa towards the costs of Mr Mandela's visit in 1990 was drawn from bank accounts held in north London which were also used to make donations to Labour. During the high-profile visit, Mr Mandela met many senior politicians including the Prime Minister, Margaret Thatcher, and her Foreign Secretary, Douglas Hurd. He also met Neil Kinnock, then Labour leader, and the Shadow Cabinet, in a half-hour session to which cameras were admitted.

Yesterday the Independent on Sunday revealed that Costa, who fled to Cyprus after being charged in 1991 with fraud involving pounds 3.5m, had siphoned money from his companies into private accounts. Business associates said pounds 300,000 passed through one account in 1991 and that that account was used for Labour gifts.

One Labour Party source said: 'It seems as if he used them (the accounts) to fund a host of activities associated with Labour, but not necessarily directly as donations to the party.'

Costa told business associates, including his Cyprus-based bank manager, Robinson Zymboulakis, and a senior official at a London branch of the Cyprus Popular Bank, that he had been asked by Labour to contribute to the expenses of Mr Mandela's visit.

One source privy to Costa's financial dealings said: 'You know he is a stupid man, Costa. He told me that it cost him over pounds 60,000. The Labour Party asked him to have a portion of the expenses.' He added that Costa agreed to help with the expenses at the personal request of a senior Labour figure.

The visit itself was organised under the auspices of the Anti-Apartheid Movement, and a special reception committee. Larry Whitty, general secretary of the Labour Party, said that Labour had no direct involvement in funding the visit.

After the event, Costa proudly showed a picture of himself with the ANC leader in his car to visitors at his factory in Enfield, north London.

Meanwhile, Labour yesterday promised to pay back this week money donated to the party by Costa if it proved to be stolen. Margaret Beckett, deputy leader, said sums donated by Costa were 'not in the same league' as the pounds 440,000 donated to the Tories by Asil Nadir.

She said Costa gave 'just over pounds 1,000 in 1987' and pounds 10,000 in 1990, and that there was no question at the time of there being anything dubious about it. 'If there is any substantiation of it (the Independent on Sunday report), it will go back this week,' she said on the BBC's Breakfast with Frost.

John MacGregor, the Secretary of State for Transport, said on BBC radio that the Nadir money would be refunded if it had been stolen. But in response to Labour's demand that the source of all large donations should be declared, Mr MacGregor said donors had a right to give anonymously.

The disclosure of more funding skeletons in Labour's cupboard will come as a relief in the coming week to John Major's embattled leadership.

But Lord McAlpine, the former party treasurer, added to Tory woes yesterday by suggesting no action be taken against Octav Botnar, 79, the former head of Nissan UK - now in Switzerland and wanted over the alleged fraud of pounds 97m - because of his age, which he described as 86.

Tory unease, page 2

James Fenton, page 19