Kevin Maxwell faces second fraud trial

Kevin Maxwell's legal battle to clear his name is set to drag on for another 18 months or longer after the Serious Fraud Office yesterday sensationally declared it was prosecuting him on further charges of fraud, despite his acquittal on similar charges a week ago.

Mr Maxwell accused the Government of interference in seeking another trial, which prompted a denial from the Attorney General, who has ultimate responsibility for the SFO.

His counsel said this would mean another trial starting in February 1997, and lasting even longer than the eight-month trial which ended last week at a cost of pounds 24m to the taxpayer.

Alun Jones QC bitterly attacked the decision as "nothing less than an outrage". It would mean Mr Maxwell had been under the strain of having to defend himself for five- and-a-half years.

The decision sparked disbelief from observers who had assumed the SFO would abandon any further action at yesterday's hearing. The SFO was heavily criticised over its handling of the first trial, in which Kevin and Ian Maxwell and a former Maxwell aide, Larry Trachtenberg, were all acquitted of conspiracy to defraud Maxwell pension funds.

Following yesterday's decision, Kevin, Mr Trachtenberg and the former treasurer Albert Fuller face charges of conspiracy to defraud. The charges relate to shares in Berlitz held by the Maxwell business empire, which it is alleged were pledged to a number of different banks as collateral for loans. As a result the banks lost more than pounds 100m, it is alleged.

The former Mirror Group finance director, Michael Stoney, is also to face trial, on two charges of false accounting. All charges against Kevin's elder brother, Ian, were dropped.

The SFO claimed yesterday in a heated hearing that a second trial could start this October and that it would be shorter than the first.

Kevin, visibly shaken by the SFO's unexpected decision, told reporters after the Old Bailey hearing of his "immense disappointment".

"I believe that I am the victim of a political decision taken by politicians in the run-up to a general election. I don't believe the interests of justice will be served by a second trial. I take a lot of courage from the jury's verdict," he said.

"I came out of court protesting my innocence and will fight these new challenges with the same vigour, determination and absolute confidence that I will be proven innocent, if these charges ever come to court."

The Attorney General then issued a statement: "The law officers completely refute the suggestion by Kevin Maxwell that the decision of the Serious Fraud Office to proceed with certain outstanding charges on the indictment was the result of political influence.

"The decision was taken by the director of the SFO after taking advice from leading and junior counsel in the case.

"As the SFO made clear in its announcement this morning, the law officers were also consulted. This is normal in cases of great public importance, in view of their statutory responsibility for the work of the SFO. They supported the director's decision."

Kevin's defence counsel successfully applied for a further hearing to decide whether a second trial would be an "abuse of process", or should be allowed to go ahead.

Yesterday's controversial decision by the SFO was taken just half-an-hour before the hearing, according to the SFO's counsel, Richard Lissack.

Mr Jones told the court that the continued prosecution was oppressive and that the defence would be seeking to have it dropped on the grounds of abuse of process.

The SFO also decided not to go ahead against the former Maxwell accountant, Robert Bunn, who was dropped from the original trial after developing heart problems, because of his continuing ill-health, Mr Lissack said.

The Department of Trade and Industry inspectors' report on the flotation of the Mirror Group, in April 1991, may also be delayed by another trial.

Lord Justice Phillips said he had written to the DTI, who replied that they were ready to start sending out parts of the Mirror Group report for comment to people named in it. This would have to wait until after the abuse hearing, he said.

Drama in court, page 4