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Thursday, November 27, 1997 Published at 16:21 GMT


DTI report politically motivated, says Saunders
image: [ Celebrating the Distillers deal: Ernest Saunders (right) in 1986 ]
Celebrating the Distillers deal: Ernest Saunders (right) in 1986

Ernest Saunders, the disgraced tycoon at the centre of the scandal surrounding Guinness's 1986 takeover of drinks giant Distillers, has criticised the long-awaited Department of Trade and Industry report, branding it "selective" and "politically motivated".

Mr Saunders, who was released from his jail term over the affair after being diagnosed as suffering from Alzheimer's Disease, hit back as the DTI reported on the takeover scandal.

Responding to the report, Mr Saunders insisted he remained "proud" of his record at Guinness and said his critics "over-emphasise" his role in the affair.

Mr Saunders said the rules on takeovers at the time of the Guinness scandal were unclear, and that he was being made the "convenient scapegoat" for the City culture of the time.

Rejects claims of personal gain

"As the chief executive at the time, I have to be prepared to take responsibility as much as credit for what went on in the company, but I do not accept the Inspectors' opinions as to my actual knowledge or authorisation of the financial transactions criticised," he said.

He also rejected the Inspectors' findings that he had tried to make personal gain from the takeover.

"I have always insisted that this smear is completely and utterly untrue, and my trial judge accepted I had made no personal gain."

[ image: Saunders: defends his Guinness career]
Saunders: defends his Guinness career
Mr Saunders said he had been made a scapegoat for "the culture of the market that existed in the City at the time" and added: "It is now clear that the Government of the day were determined to have a high profile 'City' prosecution."

He made it clear that he regarded his career at Guinness as having been, on balance, a huge success.

Reputation tarnished

"I helped re-build a company that was in severe difficulties, to the considerable benefit of the Guinness family and shareholders.

"The company was worth 90 million in 1981. Today it is capitalised at 10 billion."

He said that with hindsight "it is ironic that flawed City tactics, which were completey unnecessary, should have tarnished this achievement."

Meanwhile, stockbroker Anthony Parnes refused to comment until his case to overturn his conviction was decided on by the European Commission on Human Rights in Strasbourg.

His solicitor Keith Oliver, of Peters & Peters, said the case, in which Mr Parnes claims that both his trial and the DTI inspection were unfair, remained sub judice.

If Mr Parnes wins his case, the Commission will then allow it to go before the European Court of Human Rights.

But another of the key figures in the Guinness scandal said he regretted his part in the affair.

Disgraced financier Jack Lyons, who escaped prison on the grounds of poor health, said: "Not a day has passed in the past 10 years when I have not asked myself the question `Why?'

'Guilty of foolishness'

"Why did I allow myself to become involved? Why did I fail to confirm whether these actions were lawful. Why did the Guinness lawyers not tell us that they weren't?"

In an article for The Times, Mr Lyons said: "I simply do not believe that my actions were criminal ... I am, however, prepared to plead guilty to foolishness."

A spokesman for Gerald Ronson, also implicated in the report, said he would not be commenting on the DTI report, again citing his pending case before the European Commission on Human Rights in Strasbourg.

Report 'one sided'

[ image: Lord Spens: report 'fatally flawed']
Lord Spens: report 'fatally flawed'
Another of the defendants in the Guinness trial Lord Spens described the report as "fatally flawed."

Charges against Lord Spens - Patrick Spens, the third Baron of Blairsanquhar - who was at the time managing director of merchant bank Henry Ansbacher, were dismissed.

Lord Spens said: "The Guinness Report is fatally flawed by the omission of any reference to the activities of the Argyll Group supporters and their extensive selling and `short' selling of Guinness shares not owned by them, together with their alleged indemnities.

"As a result, only one side of the story has been told or seems to have been released by the DTI.

"The Guinness report is flawed by the omission of any reference to the 1988judgment of the Licensed Dealers' Tribunal, chaired by Lord Granchester QC, which established, inter alia, that no breach of the Take-Over Code nor any `false market' had been created by one example of the `Guinness' transactions of my clients complained of in the report," he said.

Lord Spens - the report only tells "one side of the story"

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