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Asil Nadir ‘used stolen money to secretly boost Polly Peck share price’

Prosecution tells Old Bailey jury that Nadir used an array of investment vehicles to covertly buy Polly Peck shares using money allegedly stolen from the group

Much of the £150m allegedly stolen by Asil Nadir from the Polly Peck conglomerate he ran throughout the 1980s went to finance his personal stake in the company as part of a covert effort to boost the value of the group’s shares, a court heard on Tuesday.

The former Polly Peck executive chairman denies 13 counts of theft. His prosecution by the Serious Fraud Office had been due to take place in 1993, but Nadir stunned the legal and City establishment by leaving for Northern Cyprus where he has lived until his return to the UK almost two years ago.

Philip Shears QC, for the prosecution, told a jury at the Old Bailey each penny increase in the price of Polly Peck increased the value of Nadir’s properly disclosed 25% stake in the group by £950,000. However, Nadir also allegedly stood to gain from a further secret interest in Polly Peck shares, said to be bankrolled with stolen funds.

“The primary purpose of some or all of these dealings was to support the share price of Polly Peck by creating a false or misleading impression as to the market in … Polly Peck shares, and as to the demand for such shares.”

In addition to Nadir’s declared 25% stake in stock market-listed Polly Peck, Shears told the court the group’s chairman used an array of investment vehicles – many administered out of Switzerland on the instruction of Nadir’s trusted lieutenant Elizabeth Forsyth – to secretly buy further Polly Peck shares using money allegedly stolen from the group.

Shears told the jury Nadir had resisted official demands by Polly Peck in 1989 for him to reveal how his shares were registered.

The jury also heard allegations that a day after the SFO raided Nadir’s private offices in Berkeley Square, Mayfair, in September 1990 some documents relating to investment vehicles were removed from Switzerland by Nadir’s chauffeur and taken to Northern Cyprus.

Other ventures for which Nadir is said to have used stolen proceeds include an investment in shares in Parentcare, a children’s video direct mailing firm co-founded by businessman Jim Slater.

Shears also said just over £4m had been put towards exclusive properties, and £120,000 had gone towards the £1.2m purchase price of a house in Aldford Street, Mayfair, where Nadir had lived.

Shears added that it had also been used to pay £2m of the £7m purchase price of Burley on the Hill, a substantial mansion and estate which Nadir had intended to develop into a hotel, conference centre and two golf courses, and he had also paid a £1.9m deposit on Fountain House, an office block in Park Lane, central London. The purchase was never completed.

Funds also allegedly helped to buy antiques and race horse interests. One substantial payment was made in 1989 to the business of trainer Jenny Pitman.

Nadir’s family were said to have gained or had debts paid off using stolen proceeds from Polly Peck at Nadir’s behest. His ex-wife was allegedly bought a Mercedes.

The Polly Peck boss, with the help of advisers, is accused of disguising funds siphoned out of the group in part as cash deposits sitting in subsidiaries in Northern Cyprus and Turkey. After the company collapsed, owing £550m, administrators travelled to Cyprus but were unable to recover the cash, according to the prosecution.

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