Pay back Maxwell money, Labour peer is told (CORRECTED)

CORRECTION (PUBLISHED 20 DECEMBER 1992) APPENDED TO THIS ARTICLE

A LABOUR peer and a former Conservative Cabinet minister are among one-time employees of Robert Maxwell being pressed to hand back large payments which MPs believe were funded with pensioners' cash.

Leading members of the Social Security Select Committee believe Mr Maxwell kept his empire afloat for the last six to 12 months of his life only by raiding pension funds.

Around pounds 2m is thought to have been paid to senior individuals. One of those who received a substantial sum was Lord Donoughue, the Labour peer and former director of London and Bishopsgate International Investment Management, a company that Mr Maxwell chaired, from May 1988 to July 1991.

Lord Donoughue, who earned pounds 1.2m from three years' service with Mr Maxwell, agreed a severance payment of pounds 250,000, on 17 October 1991, when, according to one informed source, Mr Maxwell was under pressure from his bankers. Less than a month later, the tycoon disappeared overboard from his yacht.

In written evidence to the select committee, Lord Donoughue said that he had no knowledge of illegalities or breaches of rules in LBI's management and that 'stocklending was being done' without reference to him or his managing director.

Another Labour peer, Lord Williams of Elvel, and the former Tory Cabinet minister Lord Walker, now in charge of the Urban Regeneration Agency, will also be questioned about their earnings during the period.

Yesterday, David Shaw, the Conservative MP for Dover, a member of the committee, said: 'It would seem reasonable that anybody who received payments from the Maxwell empire in the six months before his death should be repaying that money.'

Frank Field, Labour MP for Birkenhead and the committee chairman, said that the big financial institutions involved in the Maxwell empire would be top of their agenda, with individuals who received large payments the next priority.

CORRECTION

IN OUR issue of last week we published an article about the raiding by Robert Maxwell of pension funds, in the course of which we made a statement which was capable of bearing the inference that Lord Williams had received 'a big pay-off'.

We have now been informed that in fact Lord Williams had already given evidence to the Select Committee that his earnings from the Maxwell companies amounted to pounds 30,000 per annum as a non-executive director. It is not suggested that he received any 'pay-off' and we regret any embarrassment which may have been caused.