Select Committee on Standards and Privileges Seventh Report


Annex KK

Attendance note agreed by Mr Stoney and Mr Robinson and his legal advisers

following a meeting with them on 6 April 1999

Titmuss Sainer Dechert

ATTENDANCE NOTE
Date:6 April 1999
Name:Bernard O'Sullivan
File No:042672/R466005
Client:Geoffrey Robinson
Matter:Personal Affairs

Work Involved:  Bernard O'Sullivan meeting with Geoffrey Robinson and Michael Stoney at GR's flat at the Grosvenor House.

Documents:

BOS arrived at 4:50 pm, Michael Stoney arrived at 5:20 pm.

BOS took Michael Stoney through the following material: —

1.  The correspondence surrounding the proposed management charge by TransTec for Lock;

2.  Various copies of the 24 October 1990 invoice;

3.  The letter from Kevin Maxwell dated 22 February 1999;

4.  The PAGB cashbook for the NatWest account for December 1990;

5.  The NatWest statement sheet no. 348 for the PAGB account;

6.  The Hollis manuscript accounting notes surrounding the accruals and invoices;

7.  Various Hollis ledges showing support for Hollis from Pergamon Holdings in the sum of £1.3 million in aggregate.

The following is a summary of the points made by Michael Stoney.

1.    The handwriting on the bottom left hand side of the copy invoice is that of Shirley Caddock, Michael Stoney's secretary at the time.

2.    Michael Stoney obviously approved the invoice on 25 October 1990. That would have been in the light of the previous correspondence and would still be subject to approval by RM.

3.    In December 1990 when the cheque was drawn Michael Stoney was based in London and the accounts department of PAGB was in Hanger Lane. At that time Michael Stoney did not have day to day responsibility for the accounts department. The handwriting "paid by PAGB recharge H. Industries" is Michael Stoney's handwriting. This is not dated because sometimes Michael Stoney did not date his comments. Michael Stoney would not have put "paid" unless he believed that the invoice had been paid. There are a number of possible scenarios. They include: —

1.  Someone at PAGB could have told Michael Stoney that £200,000 had passed through the accounts. He would then track it down;

2.  He could have received a note or a telephone call from the Chairman's office saying that it had been paid to GR. MS said that if he had of received such message he was not likely to query it. Why should he?;

3.  Michael Stoney could have drawn the cheque.

Michael Stoney's guess is that he would not have assumed that the £200,000 going through the bank account related to the invoice. His guess is that he was told it was paid.

4.    By December 1990 Michael Stoney had not really worked with RM. Michael Stoney was essentially a KM man. Michael Stoney had originally been the finance director of Oyez when it was purchased by the Maxwells. That would have been KM's first job and they had built up a rapport from there. It was only late December 1990 early January 1991 that MS began to work with RM. It was at KM's suggestion that MS started to work with RM in respect of the Mirror float because MS had experience on public flotations. MS did not want to work with RM because in the previous year RM had tried to sack him.

5.    MS does not recall drawing a cheque for GR for £200,000. Over the last few years, when questioned on this subject, MS's recollection had been that GR was not paid the £200,000. Now that MS has seen that a payment was made and that he wrote on an invoice that the £200,000 was paid, MS believes that he must have thought at the time that GR had been paid the £200,000. MS has no recollection of what he was thinking on the subject in 1990. At the time what RM did was up to him. That was always the case and was the background to working in that organisation.

6.    Everything suggests to MS that there must have been some form of discussion with GR. Someone must have told GR that he was not getting the £200,000. MS did not do this. Somebody must have because GR had raised an invoice. MS believes it is possible that GR had a conversation with RM and at the end of the conversation it was reported to MS that RM had agreed to make the payment.

7.    In respect of the cashbook vouchers MS believes that these can be ignored because they are meaningless. It is dated December 1991 and MS believes that this is a correct date. What MS believes happened is that when AA were appointed they wanted to follow where the cash had gone rather than the inter-company journals. They scrapped all the inter-company accounts and recreated journals on a cash basis. This was done after the event. There are no details on the cashbook voucher (e.g. cheque number) and it also is a design of cashbook voucher which MS does not recognise. He believes that type of cashbook voucher was prepared AA.

8.    PAGB was based at Hanger Lane. Most of the cashbooks and cheque books will be up there. It is quite likely that there were cheque books in London as well. There were four individuals in London who might feasibly have access to a cheque book. (1) Kevin Maxwell. He had no cheque books. (2) RM. He insisted on having cheque books for every major operating company. (3) MS probably had a cheque book. (4) Alan Stevens almost certainly did not have a cheque book.

9.    Two directors of PAGB needed to sign a cheque or RM on his own.

10.  The NatWest cash book was a handmade spreadsheet. It can be seen that most of the entries were entered at PAGB in Hanger Lane and most of the cheques would have been produced on a computer run. Looking at the cashbook, it is apparent that cheque 1751 was put in at the end of the month to reconcile with the bank statement. This tells MS that it was drawn in London no Hanger Lane. If you look at the NatWest cashbook there are a series of end of month reconciliation including noting differences in cheques and also entering bank charges.

11.  Looking at the 1750 series MS believes that this was the start of a new cheque book. MS cannot think why £5200.00 was drawn to cash, if that is what the entry relates to. MS believes that normally cash was not drawn in this way. MS was wondering whether RM took the £5200.00 in cash but has no idea. MS would like to look at the nominal ledger for the £5200.00. Where did it get posted in the internal accounts?

12.  In respect of the registration fee this sounds like a London cheque. It sounds like something Alan Stevens wanted done in a hurry or perhaps RM wanted done. It clearly seems to be a London cheque book.

13.  There would seem to be two possibilities as to the signatories to the cheque. Either RM signed on his own, or MS and KM signed the cheque. MS does not remember drawing a cheque for GR for £200,000, but he might have done.

14.  All cheques should have been returned to Hanger Lane. I explained to MS that 90 out of 109 cheques for December 1990 have been located. I explained that cheque stubs had also been located, but none of the cheques of the 1750 series had been located nor had the cheque book. MS said that returns should go to Hanger Lane. It is possible that special arrangements were made for a particular series, but MS believes that it is likely that the 1750 series was returned to the Chairman's office.

15.  I explained to MS that I believed that one box of cheques and cheque stubs has been found. MS said that this seemed too few boxes. He would expect more than one box to have been found with cheques and cheque stubs.

16.  Discussion turned as to documentation. MS said that as part of his work for Andersons (he had been retained by the Administrator after November 1991) he had prepared a file of consolidated cash flows. This file shows all the major Maxwell group companies on the private side. It did not cover PAGB or MCC. It details every single inflow and outflow. It is called consolidated cash flows. There are 12 different versions. They are gestetner ring bound. It is in a recovery file not a company file. MS reviewed it when he went through the Anderson papers on behalf of GR to assist with the Downey report. Unless he missed something he did not note a £200,000 movement. However, he believes we should re-check this.

17.  If we work on the basis that GR did not have the money, MS said that he did not have the money, KM is unlikely to have had the money otherwise he would not have written the letter, that leaves RM. On the assumption that RM did have the money MS said it is unlikely that he would have paid it to himself. MS said it was unlikely that he would have transferred the money out of the Holborn complex. RM had an accountant on the private side called Robert Bunn. He was effectively Maxwell's private accountant. If money moved offshore to the Anstalts then it was Robert Bunn who was involved. Maybe we should ask questions of Robert Bunn.

18.  Discussion then turned to the documentation of Andersons. MS said that the documentation was poorly indexed. Even when an index had been prepared you could not be sure that the documents were there. Effectively this meant you had to go through every document. The places to start would be the boxes from RM's office, KM's office, Robert Bunn's office and MS's office. The Hanger Lane documents were entirely separate. The trouble with documents in RM's office is that they could be anywhere. It is quite possible they were shredded. In addition papers went all over the place including to the SFO. Therefore finding the papers is extremely difficult. Effectively anything that was held in London could be anywhere within the Anderson files.

The meeting ended at 7:20 pm.





 
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