Select Committee on Standards and Privileges Seventh Report

Annex HH

Letter to the Parliamentary Commissioner for Standards

from Mr Geoffrey Robinson MP

Thank you for your letter of 26 March 2001.

You have asked me to focus particularly on the possibility of misleading information having been given to your predecessor and the Standards and Privileges Committee. The complaint that was investigated by that Committee was whether I had failed to declare a payment of £200,000 remuneration received as Chairman of Hollis Industries plc ("Hollis"). This is the same complaint which Mr Heathcoat-Amory makes in his letter of 26 March 2001.

I should first like to deal with your questions: —

1.  Mr Bower's account of my conversation with him appears at page 23 of the Daily Mail on Monday March 19, 2001. At my meetings with Mr Bower I was at pains to explain to him that the invoice had nothing to do with my position as non-executive Chairman of Hollis and that I neither sough nor received payment for this. I told him there was a £200,000 payment due to Transfer Technology Limited for various management services provided to Lock (a subsidiary company of Hollis), and emphasised that I had neither directly or indirectly received the money. I further explained to Mr Bower that whilst a cheque had been drawn down for the amount in Pergamon, no-one in the investigation had been able to find out into which account it had been paid. My last remark to him, which I recall very clearly as I was fed up with the meeting, was "Why don't you do something useful and find out where the cheque went?". Mr Bower and the Daily Mail have sought to distort this conversation into an admission that I received the money. However, as you will see even from Mr Bower's own account on page 23, I made no such admission.

2.  There are several requests for information in this point and one question. I reply to them in the reverse order to which they appear in your letter.

I did not see any part of DTI report and I would be interested to know from whom you understood that I did.

The new information provided to me by Mr Aldous was essentially the cheque number 1751, the Pergamon computer cashbook record and the Orchards invoice. In addition he also provided me with the management accounts at October 1990 for Hollis (Tab 10) in which the payment was recorded as having already been paid to Geoffrey Robinson by that time (clearly wrong). This, in my view, was the source of the error which then found its way, through their low level internal accounting systems, into the annual account.

Other new information was provided by my own active endeavours to assist the enquiry. For example, I provided personal papers and located the relevant former employees of Transfer Technology Limited and asked them to conduct searches for material at TransTec plc. We found three problems: that after ten years people's memories were imperfect, that many papers had been destroyed, that the company offices had been moved three times. Despite these difficulties I managed to find and provide to Mr Aldous the Transfer Technology Limited nominal ledger (but not the cashbook). When Mr Aldous was having difficulty with Nat West concerning my personal accounts I intervened personally at the highest level in the bank. They halted their destruction of records. Unfortunately, although taking place much later than the policy required, the destruction of documents had reached April 1991. Nevertheless and again at my request Nat West checked our accounts at that date, with the outcome that will now be known to you.

I mention my own endeavours in these ways to show that I was keen to leave no stone unturned in finding the cheque and its destination.

The above will probably not be an exhaustive list of new elements in the investigation but it is what I recall now as being important in the context of the enquiry. If there are points I have missed they will be in the correspondence you request between myself or my advisers with the DTI enquiry which is at Tab.1 (See point 3 below for the specific information requested on Pergamon's computer cashbook records).

During the course of the DTI enquiry I met with Mr Aldous on three occasions. Meetings took place with my advisers present on 30 June and 8 November 1999. Unfortunately no notes were made. The purpose of the meetings was to discuss the progress of the enquiry and to ask me any questions he wished.

The third meeting took place late in November at my request just between the two of us in my flat at the Grosvenor House. (Unfortunately I do not have my diary to hand to give the exact date). My purpose in requesting this meeting was "to have it out" with the Inspector on the possibility that had been alluded to—but not properly tackled in the previous meetings—that I had done a secret deal with Robert Maxwell to receive the cheque without anyone else knowing, and to have paid it into Transfer Technology Limited or some secret account without anyone knowing.

I put it to Mr Aldous that this scenario was quite ludicrous, but since in the interests of the enquiry he had to considered all possibilities I wanted him to know it was totally untrue. Why on earth should Mr Maxwell or I have an interest in carrying out the transaction in secret? Mr Aldous suggested that I could save tax in this way. In that event I assured him Mr Maxwell would want a quid pro quo and not pay the sum in full. Moreover no one who knew Mr Maxwell would believe that he would pay anyone £200,000 secretly one week and a further £150,000 officially the following week. I referred him to Kevin Maxwell's verbal and written account of the events with his father which in my opinion had the ring of truth about them. We chatted generally about other matters in the enquiry and more generally. But the nub of the matter from my point of view was to make it absolutely clear that no illicit payment had been made and I would not have been party to such a payment.

3.  My solicitor has prepared a bundle of relevant material at Tabs 2-7. We cannot guarantee that it is exhaustive, because once an entry is made into the system, it is simply repeated each time a new report is produced. The bundle does, however, contain the main relevant paperwork on the Pergamon and Hollis side. Of course, some of this material was before the Standards & Privileges Committee when it conducted its last enquiry.

(Tab 8 contains the missing affidavit to which I referred in my last letter.)

4.  I will have had several conversations with Michael Stoney during the course of the DTI inquiry. I do not have to hand the details of these, but a full meeting covering the situation took place on 6 April 1999 with my lawyer in attendance. My lawyer made a note of that meeting which he faxed to Michael Stoney on 7 April 1999 in order to obtain his approval of the note. My lawyer subsequently spoke over the telephone with Michael Stoney and made amendments to the note to put it in its final form agreed by Mr Stoney. The approved note was then sent to the Inspector on 22 April 1999 and a copy is enclosed in the bundle of correspondence (Tab 1). This meeting encapsulated the essence of our discussions. You will see that all the relevant documentation was discussed with Michael Stoney.

Michael Stoney swore an affidavit on 8 November 1999, a copy of which has already been sent to you. Contrary to the impression gained in the story in the Daily Mail, it will be quite obvious to you that Michael Stoney swore his affidavit only after reviewing all of the relevant paper work and under no pressure from myself.

5.  No.

I should add, however, that on 19 December 1990 a payment of £150,000 was authorised to me by Central & Sherwood plc. I attach a copy of the directors' resolution (Tab 9). On 12 December 1990 Robert Maxwell had approved this payment in a telephone conversation with me. The payment was received in or around January 1991. In order to receive this payment I registered for VAT, and, naturally, income tax was paid on it. As you will also be aware the payment was registered at Parliament.

I would draw your attention to the differences between the treatment of this payment (registered at Parliament, registered for VAT, income tax paid and director's resolutions obtained) and the alleged £200,000 payment. The contrast speaks for itself.

6.  I do not recall any conversation on this matter with Shirley Caddock, although given her position as Mr Stoney's secretary, it is possible that I spoke to her. Like Mr Stoney I cannot account for or understand the note in her handwriting, save to say it may simply have been a misunderstanding. The invoice quite categorically states that payment should be made to Transfer Technology Limited. Were the payment to have actually been made to Tranfer Technology Limited, the incidence of VAT would have been neutral in any event as Hollis group companies were in a full VAT recovery position.

7.  We have never had an account in the name of Orchards.

8.  No.

9.  I spoke to Mr Robert Maxwell on 12 December 1990. During this conversation he agreed the suggestion of a payment of £150,000 plus my expenses from Central & Sherwood plc, the payment to which I have already referred. I do not recall speaking with Mr Robert Maxwell at any time about the management fee. All discussions and correspondence on the issue were conducted through Mr Kevin Maxwell and Mr Michael Stoney.

I met Mr Kevin Maxwell on 23 October 1990 and during the course of this meeting I will have pressed for payment of the management fee. This led to the generation of the invoice on 24 October 1990.

10.  I have already been categoric. I did not receive this money directly or indirectly. I confirm it was not received in any of the accounts mentioned in Mr Heathcoat-Amory's letter. The trusts to which Mr Heathcoat-Amory refers were not even in existence in 1990.

11.  I have already drawn your attention to the way the Central & Sherwood payment was treated. The points raised by Mr Heathcoat-Amory simply do not arise. I did not receive the money.

My comments on the five numbered points in Mr Heathcoat-Amory's letter are as follows.

1.  The payment referred to was the remuneration erroneously recorded in the accounts as being made to the Chairman, which I repeat was never sought by myself or paid to myself, directly or indirectly. The invoice was for services provided by Transfer Technology Limited to Lock. Furthermore the invoice makes it clear that the payment should be made to Transfer Technology Limited. At the time of the enquiry conducted by Sir Gordon Downey in 1998 I had simply forgotten the management fee issue, which had occurred eight years earlier during which time a great deal had occurred in my business and public life. Moreover at the time I had a very heavy load as Paymaster General. I focused on the issue of whether I received remuneration for my position as Chairman of Hollis which was, and is, the issue to hand.

2.  This paragraph is itself misleading as a review of the Report of the Standards & Privileges Committee will show. The Standing Committee expressly considered the possibility of a payment by Pergamon. I offered to pay for the expenses of searching Pergamon records for this purpose. Sir Gordon did not accept the offer. When the DTI enquiry got underway the Pergamon records were searched and cheque number 1751 was found.

3.  The points have already been separately dealt with. No company associated with me received this money.

4.  I would welcome your having access to the DTI report, which I have not seen in whole or in part or in draft.

5.  This point has already been dealt with.

I hope this is helpful to you. We are now due to meet at 10.00 am on Friday 30 March at your office.

29 March 2001

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