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The BBC's Greg Wood
"Hundreds of millions were missing"
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The BBC's Jeff Randell
"I cannot understand why it has taken five years to publish"
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Investigative journalist and biographer, Tom Bower
"This report is self-limiting"
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Friday, 30 March, 2001, 10:41 GMT 11:41 UK
Maxwell son blamed in DTI probe
Robert Maxwelll was proprietor of the Daily Mirror
Kevin Maxwell, son of the late business tycoon Robert Maxwell, bore "heavy responsibility" for the collapse of the Maxwell empire, an official report has found.

The report from the Department of Trade and Industry (DTI) inspectors says that the "primary responsibility" for the collapse of the Maxwell business empire lies with its founder Robert Maxwell.

Many of the City of London's most high-profile institutions are also criticised, including city investment bank Goldman Sachs and Coopers & Lybrand, now part of PriceWaterhouse Coopers (PWC).

Kevin Maxwell's conduct was inexcusable

DTI report

The report looks at the stock market flotation of the Mirror Group, owners of the Mirror newspaper, in 1991 and the events that enabled Maxwell to buy shares in his own company and to rob the pension funds of more than 400m.

The report, which took nine years, cost 8.5m to complete.

Further action

The DTI is considering whether further action is justified - amid speculation that Kevin and Ian Maxwell may be barred from being company directors.

Mirror Group stock market prospectus was "materially inaccurate and misleading

DTI report
"Action has already been taken by regulatory authorities in respect of many events by the inspectors but all relevant and professional bodies need to consider whether any further action is justified," it said.

The report finds that Goldman Sachs bears a "substantial responsibility" for allowing Robert Maxwell to manipulate the stock market.

Following the release of the report, Goldman Sachs said:"We, and doubtless many other firms in the city and elsewhere, were intentionally and successfully deceived. We deeply regret this and, with the benefit of hindsight and with the information available to us, would have acted differently."

The investment bank was found innocent of any wrongdoing in the criminal inquiry that followed Maxwell's death.

Kevin's role 'inexcusable'

The report highlights the "substantial assistance" Kevin Maxwell gave to his father.

It adds that he was brought up to believe that it was normal to use pension fund money to buy shares in other companies under Maxwell's control.

What he said to bankers and regulators "lacked frankness", it added.

"In our view, in light of this knowledge, Kevin Maxwell's conduct was inexcusable," it said.

Kevin Maxwell was previously acquitted on charges brought by the Serious Fraud Office and the report is unlikely to result in any further prosecutions.


It is not the first time Mr Maxwell was criticised by DTI inspectors.

In the early 1970s they had judged that Robert Maxwell was "unfit" to run a public company.

This alone, should have been enough to alert some of the City institutions as to the dangers of working with him, Friday's report said.

This latest DTI report criticises merchant bank Samuel Montagu - now part of HSBC - for failing to consider prior DTI reports, even though there was nothing to alert the bank to seek out such evidence.

Crucially, the information that the banks provided for potential shareholders ahead of the Mirror Group flotation in the prospectus was "materially inaccurate and misleading".


Trade and Industry Secretary Stephen Byers has announced a review of the relevant sections of the Companies Act.

He said:"It is vital we learn from the affairs of the Mirror Group Newspapers affair. We must be eternally vigilant in order to ensure that our system of corporate governance is open and transparent and is not abused."

However, the unlikelihood of further prosecutions may prompt criticism by those who say the City should be brought to task for its role in the pension funds theft.

The report makes several recommendations to ensure such a theft could not happen again.

It advises severe sanctions on companies that do not report fraud and detailed guidance for the auditing of business "empires".

Its conclusion is that:"The most important lesson from all the events is that high ethical and professional standards must always be put before commercial advantage."

Since the collapse of the Maxwell empire in late 1991, pensions law has been tightened up. But some of those who led the campaign of the Maxwell pensioners argue that it could still happen again.

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21 Feb 01 | Business
DTI deplores Maxwell leak
02 Feb 99 | The Company File
Record fine for Maxwell accountants
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