Q&A: Asil Nadir fraud trial
Why did the former Polly Peck boss flee Britain in 1993, and why is he coming back now?
Who is Asil Nadir?
Nadir was at the centre of one of Britain’s biggest financial scandals when his company Polly Peck collapsed in 1990 with debts of £1.3bn. The son of a wealthy Cypriot, Nadir came to England in the 1960s and set up an east London clothing company which grew into an international conglomerate. In the late 1970s, he took control of the ailing British textile company Polly Peck, which had been founded in 1940, and used the firm as his stock market vehicle for expansion. The company’s stock price multiplied as Nadir went on an acquisitions binge, snapping up Del Monte’s fresh fruit operations and Japan’s Sansui Electric Co. An investment of £1,000 made in the Polly Peck conglomerate in the late 1970s would have been worth £1m at the height of its success. At the time Polly Peck was the stock market’s fastest-growing company. By 1990, Nadir was 36th on the Sunday Times rich list and a generous donor to the Conservative party.
What went wrong?
The trouble started when Nadir tried and failed to take Polly Peck off the FTSE 100 and back into private ownership. Initially Nadir proposed buying back the 75% of the shares he did not own. Days later he announced he would not go through with the deal. His withdrawal precipitated a mass sell-off as banks tried to recover their loans. Things took a turn for the worse when the Serious Fraud Office (SFO) raided the company that ran the Nadir family trusts, South Audley Management. Six weeks later, the administrators were called in. When Polly Peck was forced into liquidation in October 1990, its creditors were owed £1.3bn. By the end of the year, Nadir had been been arrested and charged with theft and false accounting. He denied charges that he had stolen from his company to line his pockets, insisting he was the victim of a Greek-inspired political conspiracy.
Why did Nadir flee Britain?
Nadir fled in May 1993, four months before he was scheduled to face trial on 66 charges of theft and false accounting in a £34m fraud trial. He escaped to France in a private jet before making his way back to Northern Cyprus. When he left he was said to be deeply depressed because he believed he had been framed and was facing a lengthy jail term if he stayed in Britain. He alleges that the police and the SFO placed the judge in his case under improper pressure, made false allegations of corruption against him and his advisers, and seized documents necessary for his defence.
Along with the BCCI banking collapse and the demise of Robert Maxwell’s media empire, Polly Peck showed the darker side of the 1980s boom. The scandal had political repercussions for John Major’s government. Among the casualties of his downfall was Michael Mates, the then Northern Ireland secretary, who resigned after it emerged he had presented the tycoon with a watch inscribed with the words: “Don’t let the buggers get you down.” The Tory MP had also asked detailed questions about the SFO inquiry. He denied any impropriety.
Why is Nadir coming back now?
Asked why he was giving up a comfortable life in northern Cyprus with his 26-year-old wife to face trial, Nadir said he was eager to see justice done. The tycoon, whose four sons live in England, reportedly has lived an isolated existence in his native Cyprus since fleeing Britain. The self-proclaimed Turkish Republic of Northern Cyprus has no extradition treaty with Britain and has been a favourite haunt for British exiles. In recent years, however, its attempts to rehabilitate itself have led to ad hoc arrangements being made to return some suspects. With Turkey eager to join the European Union, and the possibility of the fast-track European arrest warrant being applied, reports say Nadir may be concerned about the security of his position. Last year, he faced problems over a £4m tax demand from the Kibris Media Group, which is owned by his family. Earlier this year, Nadir’s legal team indicated he was willing to return to face trial, as long as he was granted bail. The SFO agreed not to oppose bail in return for stringent conditions.
What will the trial be like?
Any possible trial is expected to be complex. The SFO says some of those involved in the initial investigation 20 years ago will be tapped to provide “direct, hands-on knowledge”. Nadir is scheduled to appear at the Old Bailey in London on 3 September for an initial hearing. He will have to wear an electronic tag until the end of his trial and pay a bail surety of £250,000.