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WITNESS STATEMENT OF JOHN MACNAMARA
I, John Macnamara of 14 South Street, London
W1Y 5PJ, will say as follows: 1. I am the Director
of Security for Harrods Holdings plc, a position which I have
held since 1st July 1994. Prior to that, I was the Director of
Security for House of Fraser (Stores) Limited between January
1987 and June 1994, having retired from the Metropolitan Police
with the rank of Detective Chief Superintendent. At the point
I left the Metropolitan Police I was deputy head of the Scotland
Yard Fraud Squad with special responsibility for the Public Sector
Corruption Unit, and had been involved in a number of high profile
fraud cases.
2. Following the termination of the Defendant's
employment with International Marine Services ("IMS")
in June 1991, I was requested in July of that year by Mr Mohamed
Al-Fayed to investigate the circumstances of the agreement between
IMS and Crescent Petroleum concerning the salvage of the MV York
Marine. I saw Mr Al-Fayed briefly to discuss the investigation
he wanted me to carry out and thereafter I had a longer discussion
with Adnan Karim who was able to let me have more details of
the York Marine transaction and the payment to Cornish Investments.
From this, it appeared to me that a payment of half the salvage
fee had been made to a Panamanian company, Cornish Investments,
upon the instructions of Mr Bettermann and Mr Schnieders, the
then finance director of IMS, and for no apparent reason. I told
Mr Al-Fayed of this and suggested that I speak to Mr Bettermann
and Mr Schnieders about the transaction, which he agreed.
3. I spent several days trying to get hold of
Mr Bettermann on the telephone and got the distinct impression
that he was avoiding my telephone calls. I was however able to
speak to Mr Schnieders on the telephone to ask if he would see
me to discuss the York Marine transaction. Our conversation was
amicable and he said he was happy to meet me. He suggested we
meet in Bremen where he lived. He told me that his home was quite
difficult to get to and he would be happy to come and see me
at a Hotel in Bremen.
4. I travelled to Germany on Friday 2 August
1991 and met Mr Schnieders at the Marriott Hotel in Bremen between
8.30 pm and 10.30 pm. Mr Schnieders agreed to see me voluntarily
and was very friendly. He never suggested that he had been put
under any pressure to see me by anyone. Our meeting was not tape
recorded. He told me that the deal with Crescent had been fraudulent,
and that such deals were commonplace in the salvage business.
Mr Schnieders told me that he was working under the direction
of Mr Bettermann at all times. At no time during the meeting
did he say to me that Mr Al-Fayed had been told of, or had approved
of the transaction.
5. During the meeting, I wrote out a statement
based upon what Mr Schnieders was telling me, which Mr Schnieders
voluntarily signed. I incorrectly described the ship as the "York
Minster" rather than the "York Marine" and though
Mr Schnieders did not correct me on this point during our meeting,
he did initial other minor corrections in the written statement.
6. Thereafter, I was telephoned at my hotel
later that evening by Mr Bettermann at about 11.30 pm. I was
surprised at this call because of my unsuccessful earlier attempts
to contact Mr Bettermann. I presumed that Mr Schnieders had told
Mr Bettermann about my earlier meeting and had further told Mr
Bettermann where I could be telephoned.
7. Our conversation was fairly brief, and I
summarised what Mr Schnieders had earlier told me. Mr Bettermann
said that Mr Al-Fayed knew all about the York Marine transaction
and had approved it. Mr Bettermann was anxious to meet me to
discuss the matter (which heightened my suspicions) and asked
to meet the next day in Germany. I did not want to meet him so
quickly and certainly not until I had had an opportunity to consider
Mr Schnieders' evidence. We discussed where he would be over the
next few days and he agreed to meet me to discuss my investigation
in Spain a few days later. I concluded that Mr Bettermann was
very concerned about my meeting with Mr Schnieders and what Mr
Schnieders had said to me and this accounted for his sudden wish
to see me very quickly.
8. I conveyed the gist of my conversations with
Mr Schnieders and Mr Bettermann to Mr Al-Fayed by telephone the
following day.
9. When I returned to London I prepared a note
of my meeting with Mr Schnieders which I gave to Mr Al-Fayed
together with a copy of the statement which Mr Schnieders had
signed. I also discussed with Mr Al-Fayed the suggestion made
by Mr Bettermann that Mr Al-Fayed knew of the York Marine deal
and had approved it. He said to me that he had known nothing
of the transaction and he was clearly annoyed that Bettermann
should make such a suggestion.
10. Subsequently on the 5 August 1991 I wrote
to Mr Schnieders enclosing a typed version of his written statement.
11. On the 4 September 1991 Mr Schnieders replied
to my letter. Mr Schnieders indicated he was not prepared to
sign the typewritten version of his handwritten statement which
he had previously signed and instead enclosed his own statement
which sought to withdraw from what he had told me at our meeting.
12. The Legal Director of House of Fraser Holdings
plc, Mr Royston Webb, wrote in reply to Mr Schnieders' letter
on 16 September highlighting to Mr Schnieders that he made a statement
previously which was now in direct conflict to the latest statement.
I did not have any further communication with Mr Schnieders.
13. On 7 August 1991 I travelled to Malaga in
Spain to meet Mr Bettermann as agreed during our conversation
on the telephone. Mr Bettermann saw me voluntarily at the Hotel
Don Curro and the conversation was relatively amicable. I decided
without reference to Mr Al-Fayed that the meeting should be secretly
recorded. This was because, in view of what Mr Schnieders had
told me, I believed that Mr Bettermann might later dispute things
he said to me during the meeting and quite possibly attribute
verbal statements to me which were untrue. I wanted an accurate
record of the meeting for my own protection as much as anything
else. The meeting was tape recorded using a radio microphone
located in the room, linked to recording equipment in the adjoining
room. In the main, the equipment produced a reasonably clear recording
of our meeting and the occasional feint and crackly parts of
the tape are due to interference with the radio receiver.
14. During the course of this meeting Mr Bettermann
admitted that the transaction involving the salvage fees of the
York Marine had been fraudulent, and that it was Crescent Petroleum's
Insurers who had been defrauded by the arrangements reached.
The conversation we had was lengthy and I again summarised the
outcome of my meeting with Mr Bettermann to Mr Al-Fayed by telephone.
15. A transcript of our conversation was prepared
from the tape of the meeting and I gave this to Mr Al-Fayed for
him to read. Since that date, the tape of the meeting has been
in my possession until it was passed by me to the Defendant's
solicitors, Messrs D J Freeman after the commencement of this
action in order that they could arrange for it to be professionally
enhanced and then re-transcribed. I have read the transcript of
the enhanced tape of the meeting prepared by D J Freeman and
I can confirm that it is a correct transcript of our meeting.
16. I then spoke to Mr Bettermann on the
telephone on 28th August 1991 in order to arrange a further meeting
with him. Our conversation was short and we arranged to meet on
the following day. Our conversation was again covertly tape recorded
and a transcript of our conversation was made. The tape of our
conversation has been in my possession until it was passed by
me to the Defendant's solicitors, Messrs D J Freeman after the
commencement of this action.
17. The following day I met the Plaintiff at
the Intercontinental Hotel, Park Lane, London between 11.25 am
and 11.55 am. Our conversation was relatively brief and the content
of our discussion did not add much of substance to our previous
conversation in Malaga on the 7 August 1991. Our conversation
was again covertly tape recorded and a transcript of the conversation
was again prepared from the tape of the meeting. The tape of
this meeting has again been in my possession until it was passed
by me to the Defendant's solicitors, Messrs D J Freeman after
the commencement of this action. 18. Immediately following
my meetings with Mr Bettermann and when he had seen the notes
and transcripts of all the various meetings with Mr Bettermann
and Mr Schnieders, Mr Al-Fayed asked my view about a potential
criminal prosecution of Mr Bettermann. I confirmed to him my view
that there was no doubt that Mr Bettermann should be prosecuted
as it appeared to me that criminal activity had occurred. My view
was based on what Mr Schnieders and Mr Bettermann had said to
me as well as the documents I had seen. It was clear to me that
a very large sum of money had been paid to a Panamanian company
without any satisfactory explanation. I could see no reason why
Bettermann would have agreed such a thing unless he himself had
gained in some way from the deal. Given that there was no evidence
as to who owned the Panamanian company which received the money,
it seemed likely that Bettermann might have an interest in it.
I advised Mr Al-Fayed that Dubai would be the appropriate forum
for a criminal prosecution as there was an insufficient connection
with the UK to provide a venue for a criminal prosecution.
19. I confirm that the contents of this statement
are true to the best of my knowledge, information and belief.
John Macnamara 26 June 1995
1994 B No. 2583
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
BETWEEN
JOHANN
CHRISTOPH BETTERMANN
Plaintiff
and
MOHAMED AL-FAYED
Defendant
WITNESS STATEMENT OF SHEIKH MOHAMED SULEIMAN
I, Sheikh Mohamed Suleiman, Accountant,
of PO Box 1246, Sharjah, United Arab Emirates will say
as follows:
1. I joined International Marine Services ("IMS")
in October 1971, as Assistant Accountant. I became the Accountant
in 1974, Management Accountant in 1976, and I became Chief Accountant
in 1978. I have remained in this position since 1978. I trained
as an accountant at the Pakistan Institute of Industrial Accounting,
Karachi in 1967. I am a citizen of Pakistan.
2. The first time I was aware of the York Marine
transaction was on 9 January 1989 when Schnieders asked me to
prepare a bankers draft for $900,000 payable to Cornish Investments.
Usually I would prepare the draft on his instructions, and he
would supply supporting documents, sometimes (but not often) at
a later date. On this occasion no supporting documents were ever
given to me. As there was no account at IMS for Cornish Investments
and I had never heard of them before, I asked Schnieders where
I should make the entry in the books. He told me to place the
entry in a suspense account to be cleared at a later date. I asked
him for the supporting documents for the payment and he merely
told me that Bettermann knew about this transaction, indeed the
instructions had come from Bettermann. Bettermann and Schnieders
had unlimited authority to make payments related to salvage deals.
However, any payments should have been supported by signed contracts
or agreements, or appropriate board resolutions.
3. I had never done such a large suspense account
transaction before. Suspense accounts are sometimes used where
there are no supporting documents for a transaction and there
are no other client accounts to which it can be charged. The
suspense accounts are cleared at a later date. More usually suspense
accounts are used for small transactions, for example paying
trade creditors before they render an invoice.
4. The draft was prepared by the bank and dated
10 January. On the next day a draft for $1.8 million was given
to me by Schnieders. He explained that it was regarding the York
Marine. He then said that $450,000 should be transferred to Smit
Tak and $450,000 was to be placed in the York Marine income account,
and $900,000 was to clear the suspense account. These details
were to be placed on the receipt for the $1.8 million. The copy
remittance receipt dated 11 January 1989 shows 1,651,500 Dirham
(equivalent to $450,000) which was to be placed in the York Marine
income account, and 4,954,500 Dirham (equivalent to $1,350,000)
which was to be placed in the suspense account, of which $450,000
was to be transferred to Smit Tak, and the remaining $900,000
was to clear the suspense account. Schnieders told me that the
$900,000 was a faulty overpayment.
5. There was no connection, as far as I could
see, between Cornish and Crescent. Normal accounting procedures
would involve the $900,000 which I had been told was a faulty
overpayment, being paid back to Crescent and not Cornish. I was
worried about this transaction as Crescent and Cornish were different
companies. There was nobody I could talk to about this as my
only superiors were Schnieders (who told me that Bettermann had
authorised the transaction) and Bettermann himself. I had to do
what I was told.
6. Normally, with such major payments (which
were not supported by other contractual documentation), I would
have expected to see a board resolution. There was no such resolution
(to my knowledge). I had never been informed that Mr Al-Fayed
knew about the transfers, and I had no reason to believe that
he knew.
7. During the course of their normal audit
activities in about February or March 1990 Price Waterhouse asked
me about the Cornish entry. I referred them to Schnieders. I do
not know what he said to them.
8. About six months later Price Waterhouse came
to discuss their audit reports. Bettermann, Schnieders and myself
were at the meeting, together with two or three people from Price
Waterhouse. I remember dealing with Mr Dunckley, Ms Coombes and
Mr Dale from Price Waterhouse at various times and it may be that
one or more of them were at the meeting. Price Waterhouse asked
about the payment to Cornish, which they had spotted (and asked
me about) in their audit. This was in addition to their list of
normal audit questions. Bettermann replied that it was an overpayment
from Crescent Petroleum and it was returned to Cornish. Price
Waterhouse accepted this explanation without question even though
the money was paid to Cornish earlier than it was received from
Crescent. There are no notes in the accounts dealing with this
transaction.
9. In June 1991 Bettermann left IMS. I was told
by Mr Karim that he was no longer working for IMS (neither were
Schnieders and Bettermann's secretary). I was not told what had
led to this departure.
10. Not long afterwards, in about late July
or August 1991 Mr Karim asked me to review all of the salvage
accounts. In doing this I told Mr Karim that I was concerned
about the York Marine transaction and he asked me what I knew
about it. I told him about the events surrounding the payments
and Schnieders' explanations.
11. Also in the summer of 1991 I was asked to
contact IMS' bankers, AMRO, to ascertain to where the $900,000
had been transmitted. I wrote to AMRO on 31 July 1991 and they
informed me in a letter dated 3 August 1991 that the money had
gone to a bank account at Compagnie de Banque et d'Investissements
in Switzerland although they would not tell me any more than
this.
12. An envelope (which I discovered contained
the salvage award contract with Crescent) was found in about
July 1991 when IMS was moving from Dubai to Sharjah. The cashiers
and I were moving the safe. During this process, we looked through
the safe papers and found among other envelopes an envelope marked
private and confidential, to be opened only by Bettermann. I
cannot remember whether I opened the envelope at this point,
or later when I had been asked to review the salvage files. I
handed the contract contained in the envelope to Mr Karim at
the time when the York Marine transaction was being investigated.
A search of our offices has been made for the envelope which
contained the contract, although unfortunately it cannot be found.
13. On 11 January 1993 I gave evidence to the
court in Dubai, I have seen a copy of the transcript writers'
record of my evidence and confirm that, to the best of my recollection,
this was the evidence that I gave. I have also seen a statement
containing similar information which has been disclosed in these
proceedings. On page two of that statement I am reported as saying
that I had previously heard of Cornish Investments - this is
incorrect. As I said in the Dubai proceedings, I had never heard
of Cornish Investments before the transaction in January 1989.
14. I confirm that the contents of this statement
are true to the best of my knowledge, information and belief.
Sheikh Suleiman
24 June 1995
1994 B No. 2583
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
BETWEEN
JOHANN
CHRISTOPH BETTERMANN
Plaintiff
and
MOHAMED AL-FAYED
Defendant
WITNESS STATEMENT OF ALI MOHAMED DAHBASHI
I, Ali Mohamed Dahbashi, Company Director,
of PO Box 1246 Sharjah, United Arab Emirates will say as
follows:
1. I joined IMS on 27 July 1991 to replace Christoph
Bettermann. I joined as a director of IMS, later becoming President.
Before joining IMS I ran my own family engineering business. I
am also a banker by training and studied economics at the University
of Georgia, United States of America, graduating in 1979. I am
a citizen of the United Arab Emirates ("UAE").
2. Since my arrival, I have been in charge of
all of the Fayed family businesses in the UAE. 3. I first
met with Mr Mohamed Al-Fayed in July 1991 in London when he invited
me to run the family companies in the UAE. I knew that my predecessor,
Bettermann, had been fired although I did not ask why and Mr
Al-Fayed did not offer an explanation. When I arrived in Dubai,
on talking to senior employees, I found out that Bettermann,
Schnieders and Bettermann's secretary all left suddenly, although
nobody in Dubai appeared to know exactly why. I think that Adnan
Karim knew, although he was reluctant to elaborate and I was too
busy with my new responsibilities to press him.
4. I only became aware of the break in by Schnieders
and a secretary into the IMS offices at the end of June 1991
at a later stage (I cannot remember when) during the normal course
of my work and during discussions with my staff.
5. I and Mr Karim asked IMS' accountant, Mr
Suleiman, to look into all of the salvage accounting files in
the late July or early August 1991. This had followed a general
request we had received from Mr Al-Fayed to investigate Mr Bettermann's
activities and was to take the form of a routine accounting check-up.
Mr Suleiman discovered the deal with Crescent. After considering
the papers supplied by Mr Suleiman, Mr Karim and I concluded
that the transaction was probably irregular and Mr Karim told
Mr Al-Fayed, who I believe asked Mr Sherwin of Ernst & Young
to look into it.
6. During August Mr Al-Fayed asked us to take
local legal advice on the matter, before he decided what course
of action to take. In or about the end of August and the beginning
of September 1991 I and Mr Karim met with Samir Ja'afar to discuss
our concerns. We gave Mr Ja'afar a file of relevant papers, and
this culminated in his advice of 1 September which told us that
the $900,000 had been paid without consideration, and that we
would have civil claims against Cornish and Bettermann, and that
it may also be appropriate to make a criminal complaint against
Bettermann and that he thought that a criminal complaint was also
available against Bettermann.
7. During telephone conversations with Mr Al-Fayed
it became apparent that he was considering writing to the Ruler
of Sharjah, where Crescent were based. The letter was drafted
by Mr Al-Fayed after he had considered the legal advice provided
by Ja'afar Alwan and Associates. The letter was typed in Arabic
in Dubai, couriered to London for signing, and couriered back
to Dubai for delivery. I was asked by Mr Al-Fayed to put the letter
in an envelope marked private and confidential. Mr Al-Fayed had
spoken to the Ruler's office and to his office manager Rashed
Al Shaikh ("Rashed"). I took the letter personally and
handed it to Rashed. He knew about the letter and agreed to deliver
it personally to the Ruler. I stressed the confidential nature
of the letter.
8. The letter of 2 October to the Deputy Ruler
was prepared in the same way in the couple of days immediately
prior to 2 October. Again I was asked to deliver it. I was asked
to speak with Rashed. When I spoke with him he had been speaking
with Mr Al-Fayed and he had arranged a meeting with the Deputy
Ruler. On or about 4 October I attended personally on the Deputy
Ruler and handed him the letter.
9. All stages of the Dubai proceedings took
place after IMS had sought, and received, legal advice from Mr
Ja'afar. Hence the appeals, we were advised, had a good chance
of success, and we were obviously disappointed to have lost the
case in Dubai. Most of our tactical advice was given orally in
consultation. I cannot remember the advice to appeal being followed
up in writing. Either I or Mr Karim would have given instructions
to Mr Ja'afar on behalf of IMS after receiving the same instructions
from Mr Al-Fayed. As I understand the situation, the criminal
complaint was made by Mr Ja'afar on our instructions; from then
on the criminal proceedings had a life of their own.
10. I confirm that the contents of this statement
are true, to the best of my knowledge, information and belief.
25 June 1995
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