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Asil Nadir finally comes to trial – 22 years after Polly Peck collapsed

The 70-year-old stands accused of stealing almost £150m from the Mayfair-based group he transformed from a sleepy East End rag trade business

The trial of Asil Nadir, one of the most prominent businessmen in 1980s Britain, finally began on Monday – 22 years after the company collapsed into administration owing £550m.

Nadir, 70, who built the sprawling, stock market-listed Polly Peck conglomerate, stands accused of stealing almost £150m from the Mayfair-based group he allegedly ran “in an autocratic manner”, according to the prosecution.

Proceeds from years of alleged thievery are said to have gone on buying shares for himself, paying off personal tax bills and other debts linked to himself or associates.

While the Serious Fraud Office alleges a wide pattern of repeated thefts, Nadir faces 13 counts relating to transfers of £34m. He has pleaded not guilty to all of them.

Philip Shears QC, counsel for the SFO, opened the prosecution case by explaining to the jury at the Old Bailey the reason for the great delay in the case coming to trial. “Why are you trying matters so long ago? The answer is simple. He [Nadir] was due to stand trial in late 1993 but in May of 1993 he fled the country to Northern Cyprus, thus leaving the jurisdiction, only to return in August 2010.”

Shears went on to paint a picture of Polly Peck’s chairman and chief executive as “the dominant force in [the company] … refusing to tolerate rival sources of power in the management or to accept constraints upon his freedom of action.” The Polly Peck boss, who oversaw the group from its headquarters on Mayfair’s Berkeley Square, enjoyed a 75% salary increase in 1990, to £350,000, as well as the use of a private plane and five company cars – among them a Bentley Continental, Bentley Turbo and Ferrari Testarossa.

He was a hero among City investors for rapidly transforming a sleepy East End rag trade firm into a multinational conglomerate with interests in food, electronics, textiles and leisure. Its best-known brand was the Del Monte fruit group, and among its directors was Sir Michael Sandberg.

Shears told the court: “He was a man who wielded very considerable power over [Polly Peck] operations and management and that of its subsidiaries, particularly in Northern Cyprus. We say he abused that power and helped himself to tens of millions of pounds of Polly Peck’s money.”

At the heart of the prosecution case is a series of transfers to Turkish and Northern Cypriot subsidiaries of Polly Peck, which Shears said were disguised in order to mask the fact they were for the benefit of Nadir or his associates.

Operations in these two territories, especially those of Polly Peck’s carton packaging firm Unipac, came to be the main profit generators within the group. However, they were also divisions over which Nadir allegedly had the most control. Unipac was run by Nadir’s brother-in-law and was not audited by Polly Peck’s accountants, Stoy Hayward.

Polly Peck directors and accountants began to urge Nadir to share some of the responsibilities for controlling group funds with other senior executives, but the court was told he resisted their efforts repeatedly. In particular he allegedly fought attempts to require the signature of a second director to authorise money transfers.

“It was most unusual for there to be a single signatory system operating without limit within a major public limited company,” Shears told the jury. Nadir allegedly told the board if they imposed a dual signatory system he would not be responsible for the profitability of the Cypriot and Turkish operations.

Figures sent from Turkey and Northern Cyprus to Stoy Hayward appeared to showed that as well as generating large profits for the group, cash balances in these companies purportedly reached £305m by the end of June 1990.

Four months later, however, Polly Peck crashed into administration after it had only been able to get a small fraction of these large cash reserves back to the UK. When administrators went to Northern Cyprus they effectively found no cash at all, “just a black hole”, the jury was told. “We say there is a perfectly good explanation for that – it had gone,” said Shears. “Asil Nadir had stolen it.”

The prosecution claimed Nadir had been able to keep secretly channelling Polly Peck funds to his private overseas interests with the help of a small band of helpers. These included Elisabeth Forsyth, who managed Nadir’s private and family affairs from a separate office in Berkeley Square, and two senior Polly Peck employees within the finance department – chief accountant John Turner and assistant treasurer Ersin Tatar.

Turner is said to have written misleading information on paying-in slips and in ledger entries. He is also alleged to have told a colleague how Nadir would ask him to collect bags full of cash, often totalling £100,000, from London banks and bring it back to the Polly Peck boss’s office. Nadir had allegedly told him not to tell his boss about these episodes.

Tatar is said to have told a colleague who had found discrepancies to, in Shears’ words, “keep his mouth shut”.

The trial continues. © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds