Loss of Governance was a key enabling factor in the Robert Maxwell Pensions Fraud.
However in this case Maxwell did not unlawfully remove the union elected Directors. Instead Maxwell inserted is own private investment company, Bishopsgate Investment Management Ltd, between the trustees and the assets held on trust for the members. The Directors representing the unions then had no control over how the assets being held on trust were invested.
The Directors of Bishopsgate Investment Management were Robert Maxwell and two of his sons, Kevin and Ian.
Shares held on trust were initially “loaned” to other private companies of Robert Maxwell to be used as collateral for further borrowings.
However after the 1987 global share market crash, Maxwell found himself heavy in debt and with the share prices of his public companies in free-fall.
Some £454 million was taken from the employees’ pension funds of the Mirror Newspaper Group in an attempt to prevent the collapse of Maxwell’s publishing empire.
The theft of these funds was discovered after the body of Robert Maxwell was found floating in the Atlantic Ocean.
In July 1992 England’s High Court ordered Kevin Maxwell, the youngest son of Robert Maxwell, to pay £ 400 million for his role in the removal of shares from the Maxwell pension funds. However Kevin Maxwell did not have sufficient assets to make restitution and in September 1992 he was declared bankrupt with debts of more than £ 400 million on a bankruptcy petition filed by the liquidator of Bishopsgate Investment Management Ltd.
In 1995, Kevin and Ian Maxwell, and two other former directors, went on trial for conspiracy to defraud, but were unanimously acquitted by a twelve-man jury in 1996. Neither Kevin or Ian had signed any Deeds of Variation that purported reduce the pension entitlements and the jury accepted that the intention has always been to eventually repay the £ 454 million that have been “borrowed” from the pension funds.
More information on the Robert Maxwell Pensions Fraud can be found here.
In his book “Creative Accounting” published in 1986, author Ian Griffiths titled Chapter 4 “How to pilfer the pension fund”. It has been reported that Robert Maxwell had a copy of this book in his personal library.
This tab updated on 22 March 2015