Socialist Worker

City firms joined in Maxwell's swindling

Issue No. 1742

Workers' pensions ripped off

City firms joined in Maxwell's swindling

THE OFFICIAL report into Robert Maxwell's massive fraud shows that almost every top City firm was involved in covering up for his theft. The "respectable" bankers and financiers watched as Maxwell plundered �450 million of pension funds to prop up his Mirror media empire. Their directors grab millionaire salaries and are fawned on by government. This report reveals they are indistinguishable from the most brazen Mafia clan. The guilty companies include:

  • Goldman Sachs, the super-profitable investment bankers.It helped Maxwell manipulate share prices and, says the report, bear "substantial responsibility" for letting Robert Maxwell get away with his manoeuvres. A Goldman partner acted for Maxwell frontmen to buy shares which raised prices. This partner then told the inquiry he did not know Maxwell was the real buyer. The inquiry did not believe him. Goldman Sachs made �23 million profit from its Maxwell dealings. It was eventually fined �160,000 for breaches of rules.
  • Samuel Montagu & Co, the bank that masterminded the initial stock market launch of Maxwell's MGN corporation. The report says it included "inaccurate and misleading" details in the share prospectus. Samuel Montagu & Co is now part of the giant HSBC bank.
  • Coopers & Lybrand Deloitte accountants "failed to report abuses" to pension fund trustees. They also caved in to pressure from Maxwell at key points.
  • Labour peer Lord Donaghue, a Maxwell director, ought to have been able to find out what was going on. But he never asked the obvious questions.
  • City firms Lehman Brothers, Nikko, Capel Cure Myers, Morgan Grenfell and NatWest Investment Management were all found guilty of breaches of rules concerning dealings with Maxwell pension funds.

As early as 1971 a Department of Trade and Industry report came to a damning conclusion. It said that "Robert Maxwell is not in our opinion a person who can be relied on to exercise proper stewardship of a public company." He had rigged shares, lied about company performance and overstated profits. None of this mattered to the City. They saw the chance to get their hands on more loot and allowed Maxwell to repeat all his crooked deals on a greater scale.

When it all came tumbling down it was not the bankers who lost out. It was the workers for Maxwell's firms who saw their pension funds ripped away.


"Maxwell was only able to accomplish his fraud because so many advisers and bankers turned a blind eye to what he was up to."

  • KEN HUDGELL, Association of Mirror Pensioners

"Anyone reading the Maxwell report could be forgiven for thinking the City is a nest of vipers ready to collude with any crook, facilitate any fraud, and pillage any pension fund."

  • FRANK KANE, Observer business editor

New Labour's own scandal

IN THE same week that the Maxwell report showed how private firms raid pension funds, New Labour's new system of driving everyone towards private pensions came into operation. "Stakeholder pensions", government-approved private pensions, were to go on sale on Friday this week. The government's strategy is to let the basic state pension wither in value and make everyone look after themselves.

A 25 year old would have to put away �233 a month for 40 years into a stakeholder pension to achieve an income at 65 equivalent to �15,000 a year. A 40 year old would have to spend �451 a month to get the same result. But stakeholder pensions represent a fantastic tax gain for the rich. A highly paid boss with a wife who does not work can now put �3,600 a year into a stakeholder pension in his wife's name and benefit from tax relief on the contributions.


Racism fuels new attacks

THE TORIES last week withdrew a planned election broadcast attacking asylum seekers after even Tory MPs felt they couldn't get away with such overt racism. Tory home secretary Ann Widdecombe said that they "had no intention of deploying such a broadcast" on Friday of last week.

Yet only days before she had repeated that Britain was a "soft touch for bogus asylum seekers". John Townend MP also exposed the Tories' true racist face last week. He claimed, "Our Anglo Saxon society has been seriously undermined by the massive immigration, particularly Commonwealth immigration, that has taken place since the war.

"Illegal immigrants have got a new ploy. They call themselves asylum seekers. In my view the only way to deal with the problem is to send them back quickly." Comments like this were condemned by the Council of Europe's Commission against Racism and Intolerance this week.

It criticised Britain's right wing media for "consistent inflammatory attacks on asylum seekers coming into the United Kingdom". The commission's report said articles in the media and politicians' promotion of anti-refugee laws "have played a fundamental role" in fostering racism against immigrants.

This climate is encouraging attacks on black and Asian people. A Bengali father of two was stabbed to death in Bow, east London, last Sunday. Witnesses say 34 year old Shiblu Rahman was attacked by a gang of white youths. A 15 year old student, Harifur Rahman, had a broken bottle smashed over his head in Bermondsey, south London, on Friday of last week. He and his brother were attacked by a 20-strong gang as they walked home from a wedding.

And Kurdish asylum seeker Ary Ahmed was attacked in Liverpool last week as he returned to his refugee hostel. Three white men stabbed him in the head.


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News
Sat 7 Apr 2001, 00:00 BST
Issue No. 1742
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