Investigation into Nadir 'bribes' memo launched: Accountants' institute examines evidence

THE Institute of Chartered Accountants is examining evidence that partners in Britain's largest accountancy firm were prepared to pay 'bribes' in order to recover Turkish assets belonging to companies in the Polly Peck group formerly owned by the fugitive tycoon Asil Nadir.

On Thursday the Independent published details of an internal Coopers & Lybrand memorandum that refers to the payment of 'bribes' as part of a proposed deal to sell a printing press to raise money for Polly Peck creditors. The author, Stuart Smith, a partner in the department dealing with the administration of Polly Peck, recommended that the sale - despite the apparent need for 'bribes' - go ahead.

The memo was leaked to Nadir, who is charged with theft and false accounting involving about pounds 30m. He forwarded it to the Turkish authorities.

One Polly Peck administrator, Michael Jordan, who is a senior partner at Coopers, and his legal adviser, were in Turkey on business when they were detained and interviewed by police earlier this week in connection with allegations that Coopers were prepared to pay bribes. Mr Jordan returned home yesterday but declined to comment. It emerged yesterday that Turkish lawyers acting for Coopers had written to Mr Smith before he circulated his memo advising that the sale should go ahead only if it 'was completely legal'. The memo made clear that the administrators would only countenance an arrangement that would not 'cause speculations'. It is not clear why, in the light of this, Mr Smith mentioned 'bribes' in his memo. Coopers said last night that the memo was an account of a meeting, and that Mr Smith was reflecting language used during the discussion. He declined to comment.

Coopers added that the deal did not go through and that the advice of the Turkish lawyers was followed. The reference to 'bribes' in the memo was 'careless wording'. Mr Smith is said to accept that it was an 'unfortunate word to use'. A source said: 'The firm does not do bribes - the wording was stupid, yes; but not sinister.'

The professional misconduct committee of the Institute of Chartered Accountants said that it was making inquiries.