House of Commons - Standards and Privileges

Select Committee on Standards and Privileges Seventh Report

APPENDIX 3

Draft response on behalf of Mr Geoffrey Robinson MP

to the memorandum of the Parliamentary Commissioner for Standards

dated 26 April 2001

First draft response

Incomplete because of lack of time

1. Executive summary

1.1 There is an insufficiency of evidence as to whether Mr Robinson received the £200,000 in 1990. The five documents which could prove the matter one way or the other (the Pergamon AGB cheque itself, the cheque stub, the paying in slip and the cashbook or bank statements for Transfer Technology Limited) are, despite huge efforts to locate them by Mr Robinson and others, not found. It is simply not possible for the Committee safely to conclude that Mr Robinson received the £200,000.

1.2 A strong circumstantial case can be made that Mr Robinson received the £200,000, if the preconception is that he did so. However, the only way in which the Committee could conclude that this actually happened is if it believes both that Mr Robinson was acting dishonestly in 1990 and that he is lying now. There is no direct evidence for either of these two propositions, as we shall demonstrate. Moreover, the circumstantial evidence is conflicting and raises serious doubts as to whether Mr Robinson received the £200,000.

2. Material not included in the Memorandum

2.1 When assessing a circumstantial case it is always required that, the investigator has to examine all of the circumstances. Unfortunately the Commissioner's Memorandum fails to do this in important respects. The failure to consider all the circumstances has led to the wrong inferences being drawn from the circumstantial evidence. It is necessary, therefore, to start by setting out the surrounding circumstances which are excluded from the Memorandum. Set out below in the next three sections are a brief summary of

Section 3 background;

Section 4 the nature of the merger deal which was agreed by December 1990; and

Section 5 the circumstances and treatment of the £150,000 payment undoubtedly made to Mr Robinson in December 1990 by Central & Sheerwood Plc and duly declared by him to the Inland Revenue, Customs & Excise and registered at Parliament.

2.2 Due to lack of time exact dates have not been checked.

3. Background

3.1 In the 1980s Mr Robinson had established Transfer Technology Limited, an engineering company based in the West Midlands with the purpose, as its name implies, of transferring technology from universities to commerce. By 1990 Mr Robinson owned all bar a few of the shares in the company. Transfer Technology Limited was successful and grew. Its specialism was electro magnetic discharge technology. By 1990 it had acquired one other company in the field, Sarclad Limited, which was based in Nottingham.

3.2 By 1990 Mr Robinson had been a director of Central & Sheerwood Plc ("C&S") for about three years. C&S was quoted on the London Stock Exchange but majority owned by Maxwell interests. C&S had two engineering subsidiaries, Apex and Dunn, which were located in Coventry, close to Mr Robinson's constituency. In 1987 Apex and Dunn were in some difficulty and there were public concerns that they would be sold or closed down leading to a loss of jobs and industry in the Coventry area. The Maxwell interests had no experience in working in engineering companies, whereas Mr Robinson had. Mr Robinson began to work with these two companies. In time their fortunes revived.

3.3 By 1990 Mr Robinson had been working perhaps one day a week at C&S. More time would have been spent when Mr Robinson first became involved in around 1987.

3.4 Mr Robinson had no contract of employment for his work at C&S. He had no right to receive remuneration, although by late 1990 Mr Robinson believed that he should be paid to reflect the ultimate result and his work at achieving that result.

3.5 By late 1990 Mr Robinson was also a director of Hollis Industries ("Hollis"). Mr Robinson became a director at the time of a management buy out ("MBO") of Hollis from Maxwell interests. As the MBO involved a substantial earn out and because Hollis was an engineering company (as already noted an area in which Mr Robinson was experienced and Maxwell interests were not), Kevin Maxwell had asked Mr Robinson to become involved to represent Maxwell interests.

3.6 It must be borne in mind that Mr Robinson's involvement with Hollis was of a totally different nature from his involvement in C&S. At C&S Mr Robinson, although part time, was in the nature of an executive director, with day to day power to implement strategy as well as to set it. In contrast, by the time Mr Robinson became involved with Hollis the strategy was set - the MBO - with all of the financial consequences and burdens that flowed from it. Mr Robinson's involvement was of a non-executive nature at board meetings. His time involvement was very much more limited than at C&S. Mr Robinson did not spend time, as he did with C&S, at the plant. As Mr Robinson was representing Maxwell interests he was seen by the MBO team as an outsider and this led to severe tension with the executive team, limiting what Mr Robinson could do.

3.7 Mr Robinson had no contract of employment for his work at Hollis. He had no right to receive remuneration. Given the results and his limited involvement Mr Robinson did not expect to be paid for his directorship of Hollis.

3.8 Mr Robinson's initial assessment to Maxwell interests was that the MBO was too heavily geared and could not succeed. Unfortunately that assessment proved correct. Afraid to let a company with which they were associated go into liquidation, the Maxwell interests decided to take Hollis back into the Maxwell fold. Mr Robinson was asked to help turn round some of the Hollis subsidiaries as he had done with C&S. This he began to do in early 1990. One subsidiary in particular, Lock, was in a very bad position.

3.9 Finally, by way of background, by 1990 Mr Robinson had also established an American company, Roll Center Inc. This was a start up company, as opposed to Transfer Technology Limited which had been trading for approximately 10 years. Again it was an engineering company which [GR explain what Roll Center did]. As a start up it was not in profit in 1990. Transfer Technology Limited advanced loans to Roll Center and also traded with Roll Center.

4. The merger deal agreed by late 1990

4.1 In the last quarter of 1990 a three way merger was agreed between Hollis, Mr Robinson and C&S. There was a slight delay at the beginning of 1991 but eventually papers went to C&S shareholders for approval in April 1991 and the deal was completed in May 1991.

4.2 Under this deal C&S would acquire Transfer Technology Limited and Sarclad from Mr Robinson and two of the Hollis subsidiaries, including Lock, from Maxwell interests. C&S would become a focused engineering company. Its other interests (property) would be sold off. Transfer Technology Limited would provide the management for the combined group (save that a new Finance Director was recruited) and Mr Robinson would become Chief Executive.

4.3 The Maxwell interests retained Charterhouse to advise them on the financial terms of the deal. Ultimately Mr Robinson received approximately £1 million cash consideration and shares with an initial value of approximately £5 million. This gave Mr Robinson approximately 25% of C&S. Maxwell interests were left with approximately 25% of the group (which they soon after sold in the market). C&S changed its name to Transfer Technology Group Plc.

5. The payment made to Mr Robinson in December 1990 by C&S

5.1 As indicated above, by late 1990 Mr Robinson believed he should be paid for the successful work he had done at C&S.

5.2 Documentary evidence survives in respect of the negotiation, payment and treatment of this payment. The evidence is in two forms. First that taken from a notebook which Mr Robinson maintained in 1990 and others of Mr Robinson's personal records. This notebook was retrieved from storage in 1999. It was made completely available to Mr Aldous, the DTI Inspector. Equally it was made available to the Parliamentary Commissioner. The second source of evidence is documents from the Maxwell group. This documentation was preserved when the group went into administration in 1991.

5.3 As will be shown later all of the evidence shows that a payment to a director within the Maxwell group required the permission of Robert Maxwell. Thus Mr Robinson would not be paid for his work within C&S without Robert Maxwell's approval. Likewise any payment to Transfer Technology Limited for its work in respect of Lock (referred to below) would require the approval of Robert Maxwell.

5.4 On 4 December 1990 Mr Robinson arranged to speak to Robert Maxwell about this subject. The arrangement was that Mr Robinson was to speak to him on "Sunday", which was Sunday 9 December 1990. (See extract from Mr Robinson's notebook - Tab 1.)

5.5 There is no relevant entry in Mr Robinson's notebook for Sunday 9 December 1990 and Mr Robinson does not believe he spoke to Robert Maxwell on that day. Mr Robinson's diary indicates that he was travelling that day, which may explain why no conversation took place.

5.6 On Tuesday 12 December 1990 Mr Robinson's notebook records that he spoke to Robert Maxwell and that a payment of £150,000 plus expenses was agreed. The notebook records the comments of Robert Maxwell; "very sensible". (See extract from Mr Robinson's notebook - Tab 2.)

5.7 On Tuesday 19 December 1990 a written resolution of all of the directors of C&S was signed authorising the payment of £150,000 to Mr Robinson. (Tab 3)

5.8 On Thursday 21 December 1990 instructions to pay the £150,000 were sent to the bank by C&S. Payment was effected by telegraphic transfer.

5.9 Mr Robinson registered for VAT and VAT was paid on the payment (a neutral event for C&S which simply reclaimed the VAT, as it was in a full recovery position). Mr Robinson declared the receipt for income tax and paid income tax on it. Mr Robinson registered the payment at Parliament

5.10 The issue before the Committee is whether in the same month Mr Robinson received from Maxwell interests a further sum of £200,000, which he did not declare or register and which he has consistently and strenuously denied receiving.

6. The Parliamentary Commissioner's conclusions on the £200,000

The Parliamentary Commissioner has made the following conclusions:

6.1 The cheque was paid to Mr Robinson personally (paragraph 137).

6.2 It was paid in by Mr Robinson or at his instruction at the Tavistock Square Branch of National Westminster Bank on Friday 7 December 1990 (paragraph 143).

6.3 That the destination account for the funds was an account at National Westminster Bank in Colemore Row, Birmingham (paragraph 118).

6.4 Most probably the cheque was paid directly into Transfer Technology Limited's account at National Westminster Bank in Colemore Row, Birmingham (paragraph 143).

6.5 If the money was not transferred direct to Transfer Technology Limited then it "could" have been paid into either:-

(a) some account controlled by Mr Robinson not previously disclosed by Mr Robinson; or

(b) into an account provided to Mr Robinson by "some other person sympathetic to his objectives".

and then Mr Robinson "could" have arranged for an equivalent sum to be paid out of that account to either:-

(d) Transfer Technology Limited direct

(all paragraphs 144).

6.6 A "possible" explanation for Mr Robinson's alleged conduct would be to avoid income tax, and possibly VAT (paragraph 146).

7. What is not in dispute

7.1 The first point to make is that it is not in dispute that Mr Robinson has provided full co-operation to the Parliamentary Commissioner. This is expressly acknowledged at paragraphs 29 and 156 of the Memorandum. When one is considering a circumstantial case this is an important consideration.

7.2 Equally Mr Robinson provided complete co-operation to the DTI enquiry conducted in 1999 by Mr Hugh Aldous.

7.3 In respect of the management services provided by Transfer Technology Limited to Lock it is not in dispute that:

(a) Transfer Technology Limited did provide management services to Lock;

(b) Transfer Technology Limited (through Mr Robinson) was by April 1990 in negotiation with Maxwell interests for payment for these services;

(c) A base fee of £200,000 was agreed upon together with a profit related element, the details of which were not finally resolved. (See Annex N, dated 29 June 1990 page 25 to the Memorandum);

(d) Mr Robinson pressed for the payment of the fee;

(e) Following a meeting with Kevin Maxwell on 23 October 1990, Mr Robinson produced an invoice for £200,000 marked "Please make cheque payable to: Transfer Technology Limited";

(f) On 13 November 1990 Mr Robinson records in his notebook that Michael Stoney agreed that the payment of £200,000 would be made "this week" to Transfer Technology Limited. (see extract from Mr Robinson's notebook at Tab 4). On nobody's case did this entry prove to be correct.

7.4 In respect of the Maxwell side, it is not in dispute that:

(a) The October 1990 management accounts for Hollis (produced in November 1990) note "A management fee of £200,000 paid to Geoffrey Robinson MP in October has been charged to the period from January to June 1990, this being the period to which it relates." (emphasis added) (see Annex Q, page 28 to the Memorandum, although unfortunately the relevant words have been made illegible by a marking pen, so a clean copy is at Tab 5.) This is an undeniable error at odds with all known other facts and maybe the source of the subsequent erroneous Hollis accounting (see Section 9).

(b) As illustrated by the October 1990 Hollis management accounts, Maxwell interests treated Mr Robinson and Transfer Technology Limited interchangeably;

(d) Cheque number 1751 was paid in to the Tavistock Square branch of NatWest on Friday 7 December 1990;

(e) The paying in slip (which was manually filled in) does not survive;

(f) There is no direct proof as to who the cheque was made out to or as to which account the cheque was paid in to;

(g) Unlike C&S there was no board resolution of Hollis, Lock or PAGB to authorise a payment to Mr Robinson or his company;

(h) NatWest identified a transfer of £200,000 from the Tavistock Square branch to the Colemore Row branch on 7 December 1990 but stress that this "credit may be completely unrelated to the cheque which is the subject of your enquiry". (see Annex T, page 31 to the Memorandum) This was repeated by NatWest, when questioned again - "We would stress that this credit and the cheque for £200,000 may be completely unrelated." (see Annex U, page 32 to the Memorandum); and

(i) At some unknown time Michael Stoney wrote "paid" on the 24 October 1990 invoice;

7.5 In respect of the treatment in the nominal ledger of Transfer Technology Limited of the loan between Transfer Technology Limited and Roll Center, it is not disputed that

(a) the nominal ledger records a credit of £200,000 to Transfer Technology Limited on 30 December 1990; and

(b) in April 1991 Roger Davis, the finance director of Transfer Technology Limited (but not the Plc after the merger), informed the solicitors to Transfer Technology Limited that the £200,000 had been received on 10 December 1990. Roger Davis has informed Mr Robinson's lawyer that he would have taken that date either from the paying in slip or the bank statements of Transfer Technology Limited.

8. What is in dispute

8.1 Leaving aside the actual complaints themselves, the purpose of this section is to explain in a little detail the main factual areas of dispute.

8.2 The first and most obvious area of dispute is the question of whether Mr Robinson directly or indirectly received the £200,000. Mr Robinson emphatically denies it. When one examines the surviving documentary evidence and the witness evidence it becomes clear that the only way that the Committee can conclude that Mr Robinson received this money is if the Committee concludes that:

(a) Without the knowledge of Michael Stoney and Kevin Maxwell, between 26 November and 7 December 1990 Mr Robinson approaches Robert Maxwell direct and succeeds in changing his mind by persuading him to pay the management fee after all;

(b) Robert Maxwell issues cheque number 1751 made payable to Mr Robinson or his nominee, and signs the cheque alone;

(c) On 7 December 1990 either Mr Robinson banks the cheque at Tavistock Square or Robert Maxwell, at Mr Robinson's direction, arranges for the cheque to be paid into the Tavistock Square branch;

(d) The credit of £200,000 from the Tavistock Square branch to the Colemore Row branch reflects cheque no. 1751;

(e) Roger Davis mis-records the date of receipt as 10 December 1990 in the books of Transfer Technology Limited. (He would normally record the receipt from the date of the paying in slip (7 December) or the bank statement (which could not be earlier than 11 December, the date the money was debited to PAGB. We say this because it is a truism that banks do not make money by crediting one customer before debiting the other.);

(f) Mr Robinson misleads his closest business colleagues and friends (Dr Ahmed and Brenda Price), as well as Roger Davis by telling them that the Maxwell monies were not received and pretending that he has found a different £200,000 to reduce the Roll Center debt;

(g) Having persuaded Robert Maxwell to make the management contract payment, Mr Robinson then, only a few days later on 12 December 1990, persuades Robert Maxwell to make the C&S payment;

(h) Robert Maxwell is so persuaded of the case despite the fact that Mr Robinson had received £200,000 the previous week, and the C&S payment is documented by way of written board resolution and paid inside 9 days on 21 December 1990;

(i) Although Mr Robinson paid income tax and VAT on the C&S payment, he deliberately chose not to do so on this alleged payment;

(j) Although Mr Robinson registered the C&S payment at Parliament, he deliberately chose not to do so for this alleged payment; and

(k) Mr Robinson has deliberately lied about this matter ever since.

8.3 For the Committee to conclude that Mr Robinson received the money it is necessary for it to reach each and every one of the conclusions set out at 8.2 (a) to (k). Section 9 onwards will be aimed at showing that the above scenario is the only one the Committee can adopt to conclude that Mr Robinson received the money and that it is an incredible scenario without any evidence in support of it.

8.4 The second primary area of dispute is whether Mr Robinson was wrong to state in 1998 that he did not expect to receive any benefit in kind in respect of his chairmanship of Hollis. Although related to what factual findings the Committee makes it is a different kind of dispute from the question of whether the money was actually received. Mr Robinson did in 1990 expect that Transfer Technology Limited would receive a management fee for management services provided by Transfer Technology Limited to Lock. Mr Robinson did not raise this with the Committee in 1998 for the simple reason that he did not recall it because it had occurred eight years earlier during which time a great deal had occurred in his business and public life. (see his letter to Mrs Filkin at answer 1 page 49 to the Memorandum)

8.5 Two issues arise. First, should Mr Robinson be censured when it is quite reasonable for him to have forgotten this issue which is of quite a different nature from the issue in question at that time - which was had he received director's fees for being Chairman of Hollis. It should be noted nobody is now suggesting that Mr Robinson did receive such director's fees. Second, even if the Committee were to take a strict view, was Mr Robinson's answer still nonetheless correct? It is suggested that it was.

8.6 The remaining factual disputes are of a secondary nature. They relate to the inferences that can be drawn from the primary material.

Why didn't Mr Robinson continue to pursue the management fee?

8.7 Mr Robinson has explained that once it became clear that the fee would not be paid, but that the benefits of the work Transfer Technology Limited had carried out at Lock would be carried forward into the merged group, then there was little point in pursuing the fee. The Commissioner has said this is "difficult to accept" (para 108), but this ignores

(a) the great benefits of the merger deal for Transfer Technology Limited and for Mr Robinson;

(b) the fact that Dr Ahmed and Roger Davis, respectively Managing and Finance Directors of Transfer Technology Limited, and witnesses whose credibility is not and could not be questioned, did not see anything odd in the management fee not being pursued once the merger deal was agreed.

8.8 In 10 years Mr Robinson had built Transfer Technology Limited from nothing into a business which made profits of £600,000 for the year to 31 March 1991. The merger deal offered a considerable benefit to both Mr Robinson and Transfer Technology Limited. The merger provided Mr Robinson with a cash consideration of £1 million. Mr Robinson had the option to increase the level of cash he took out at that stage should he desire. In addition Mr Robinson was left with approximately 25% of the enlarged group, a shareholding initially valued at £5 million.

8.9 There was a huge potential for growth by putting the engineering companies together (which potential was subsequently realised) and thus there was huge potential for a rise in value of Mr Robinson's shareholding. In addition the merger deal gave the group a platform to make acquisitions using the currency of listed shares or alternatively to raise capital in the market (both of which subsequently happened). In short this was a wonderful deal for Mr Robinson. In this context the foregone £200,000 was immaterial, especially when the benefits of the work at Lock remained within the enlarged group.

8.10 In the circumstances of the merger deal, neither Dr Ahmed or Roger Davis saw anything "difficult" in not pursuing the management fee. The point was not even put to them in their interviews by the Commissioner and Dr Ahmed expressly explained why the fee was not pursued. The reason why Dr Ahmed did not consider it odd not to chase the fee is because he, like Mr Robinson, accepted the commercial logic of the situation. He expressly says so.

8.11 It is clear that the Commissioner has substituted her own view here for those of all of the relevant witnesses. On this issue, there is no evidence for the Commissioner's view. All of the evidence suggests that the explanation offered by Mr Robinson was a perfectly reasonable and normal explanation of events in the commercial world. The Committee should accept the explanation.

Services by Mr Robinson or by Transfer Technology Limited?

8.12 The extent to which the management services were provided by Mr Robinson, as opposed to Transfer Technology Limited, is also in issue. All of the contemporaneous paperwork on the Transfer Technology Limited side points to the services being provided by the company and Mr Robinson's involvement being provided through the company, but this is largely ignored in the Memorandum.

8.13 At paragraph 103 reference is made to the outline management services agreement sent under cover of Mr Robinson's letter of 3 May 1990. Unfortunately the document is not exhibited and so the Committee cannot see what was envisaged. A copy is at Tab 8. It can be seen that the services provided by Transfer Technology Limited included a full time chief electronics engineer supported by a senior software engineer and an electronic engineer. In addition Transfer Technology Limited's commercial director was to take responsibility for Lock in the USA. Subsequent correspondence (Annex L and M to the Memorandum) show that also included was the making available of showroom space in Birmingham which had directly led to Lock saving £75,000 per annum.

8.14 It would therefore be wrong for the Committee to conclude that even the bulk of the services provided by Transfer Technology Limited related to Mr Robinson personally working at Lock. They did not.

Approval necessary by Robert Maxwell?

8.15 It is unclear from the Memorandum whether the Commissioner accepts that any payment to Mr Robinson or to Transfer Technology Limited had to be approved by Robert Maxwell. All of the contemporaneous documentation and all of the witness evidence shows that any payment to Mr Robinson or Transfer Technology Limited would first have to be approved by Robert Maxwell. Unfortunately two pieces of evidence in this regard were not exhibited to the Memorandum, even though they had been provided to the Parliamentary Commissioner and their significance pointed out. This subject is dealt with in greater detail in section 12 at paragraph 12.3 to 12.5

Did Mr Robinson have to repay the Roll Center loan in December 1990?

8.16 It is suggested that Mr Robinson had no choice but to reduce the Roll Center loan when he did, and as a consequence this is put forward, without any evidence, as a motive for Mr Robinson dealing with the alleged receipt in an illicit way. It is not true ,factually or legally, that Mr Robinson had to reduce the loan in December 1990. Mr Robinson provided an explanation of this in interview. This explanation is not dealt with in the Memorandum and presumably (unlike other areas - see paragraphs 25 and 146) no advice was taken on it. This is regrettable because if advice had been taken it would have shown that the explanation offered by Mr Robinson was legally correct.

8.17 At paragraph 124 the Commissioner explains the potential problem, but she proceeds on the basis that there was only one solution, which is totally inaccurate. A loan by Transfer Technology Limited to Roll Center was perfectly legal when made. However, one consequence of the merger was that Transfer Technology Limited would become a subsidiary of a plc (C&S). Loans made by a plc to a company associated with a director are prohibited. Arguably, therefore, the loan made by Transfer Technology Limited, although legal at the time it was made, would be converted into an illegal loan when the merger was complete.

8.18 The Commissioner has mistakenly proceeded on the basis that this potential problem was a big event upon which the whole merger deal hinged. This is to give the issue far more focus now than it actually merited at the time. The issue was one of many issues which needed to be ironed out in what was a large corporate transactions. That such issues arise in a large corporate transaction is perfectly normal. Advisers are adept at establishing structures to deal with them.

8.19 The Commissioner has also mistakenly proceeded on the basis that the only way Mr Robinson could have dealt with this potential problem was by repaying the loan in December 1990. This is not true, factually or legally. Mr Robinson explained this to the Commissioner in his second interview. Regrettably the Commissioner has not considered this explanation at all. What Mr Robinson explained was that it would have been possible for him to repay the £200,000 from the £1 million cash consideration he received at completion of the deal (which as explained below, was not reduced by taxation). Typically all matters at a completion take place in escrow; that is to say that completion is only deemed to have taken place when all matters due to be performed have been dealt with. It would be normal and customary for the repayment of the loan and the payment of the consideration to have taken place at the same time. Effectively one would be offset against the other. The Committee will wish to take independent legal advice on this point.

8.20 It should also be noted (since tax appears to play such a large part in the thinking of the Commissioner) that, quite legitimately, Mr Robinson paid very little (possibly none, there has been no time to check) tax on the consideration he received. This is because the capital gain he had crystallised in Transfer Technology Limited was offset against the capital loss he had incurred in the start up of Roll Center. Finally if despite all this it should be said that somehow Mr Robinson had earmarked the £1 million and could not use part of it to repay the Roll Center debt, then, as already noted, Mr Robinson was perfectly at liberty to take a higher sum in cash as part of the consideration. (As Mr Robinson noted to the Commissioner, the advisers to C&S were very surprised as to how low a proportion Mr Robinson took in cash.)

Was the £200,000 management fee ever going to have featured as part of the multiple to establish the price for Transfer Technology Limited?

8.21 The Commissioner, without any evidence at all, has, at paragraph 141, speculated (for that is all that it is) that one benefit to Maxwell interests was that by not paying the management fee the price paid for Transfer Technology Limited would be reduced.

8.22 We will leave aside the fact that this finding is based on pure speculation, necessary to and designed to fit in with the preconception of the Commissioner that Mr Robinson received the £200,000. It is a finding based on no evidence at all and in obvious ignorance of how the price for Transfer Technology Limited was set. C&S was advised by experienced merchant bankers, Charterhouse, on the issue of consideration. The price was justified in detailed listing particulars which were sent to shareholders. The purchase was voted on by shareholders at an EGM.

8.23 It is absurd to suggest, as regrettably the Commissioner does, that there was ever any possibility of the price being inflated by £2 million because of the management fee. In a public company commercial transaction the price would never be inflated in this way. If the Committee wishes to adopt this suggestion then it will be necessary to take evidence to show how the price was established. As a minimum this will involve evidence from Charterhouse, and it may involve evidence from others. This is not something which has been done to date because the first time that the suggestion was made to Mr Robinson was when he saw it in the draft Memorandum a few days ago. The fact is the anticipated management fee was never included in the multiple. There is no evidence to suggest it was.

8.24 The Commissioner entered into this speculation because it was necessary for her to find a motive (saving money) as to why Robert Maxwell would agree to make the payment of £200,000, and agree to make it in an illicit way. (One of the striking things about the payment of cheque number 1751 is the lack of accompanying normal commercial documentation on the Maxwell side.) It is respectfully suggested that a more likely way in which Robert Maxwell saved money was by not making the payment to Mr Robinson.

9. The explanation for the accounting treatment in Hollis

9.1 Included in the statutory accounts for Hollis for the period to June 1990 were chairman's emoluments of £200,000. The material which was discovered during the course of the DTI enquiry sheds light on how this came about.

9.2 First, within the Maxwell organisation, Mr Robinson and his company Transfer Technology Limited were used interchangeably, irrespective of the true legal position.

9.3 It is now clear that the management fee issue was the explanation for the reference to £200,000 of emoluments. The explanation as to how this emerged into the statutory accounts for Hollis as money paid can now be seen from internal Maxwell documents.

9.4 On 16 November 1990 Michael Stoney instructed Hollis financial staff to include a provision in the Hollis accounts to 30 June 1990 for "management fees for Geoffrey Robinson".

9.5 In November 1990 the Hollis monthly management accounts for October 1990 were prepared. They state at item 7 "A management fee of £200,000 paid to Geoffrey Robinson MP in October has been charged for the period from January to June 1990, this being the period to which it relates." (emphasis added). On nobody's case was a payment made to Mr Robinson in October 1990 as the management accounts of Hollis recorded.

9.6 The same staff who prepared the management accounts, prepared the statutory accounts. The simplest and most likely explanation is that the clear mistake of the October management accounts that the £200,000 had been paid (and nobody disputes it was a mistake) was carried through into the statutory accounts.

10. Witnesses

10.1 The most important witness is Mr Robinson. Other very important witnesses, and witnesses whose credibility there is no reason to doubt, are Dr Ahmed and Roger Davis.

Mr Robinson

10.2 Mr Robinson's position is a carefully considered one. There is no room for misunderstanding and mistake. He is adamant he did not receive this money directly or indirectly.

10.3 Mr Robinson has been accused of deliberately lying to Parliament, to the DTI and to his closest and most trusted colleagues. He is also accused of criminal conduct (deliberate tax evasion).

10.4 There is no direct evidence of any of this. All there is are inferences from an incomplete set of primary documents. It is from these inferences that these most grave accusations are made. There are even suggestions that Mr Robinson might have kept back secret bank account information or in effect "laundered" the alleged receipt through an unknown sympathetic friend. These suggestions are not even based on circumstantial evidence, but are just innuendo on inferences.

10.5 These accusations are made in the face of Mr Robinson's conduct both in respect of this enquiry and the DTI enquiry which preceded it. (For the avoidance of any doubt Mr Robinson has never seen the DTI report or any draft of it.)

10.6 In respect of the DTI, Mr Robinson made every effort to co-operate with, indeed further the work of the investigation. Free access was given to all of Mr Robinson's personal papers. It was, to take one example, Mr Robinson's efforts which located the Transfer Technology Limited nominal ledger (eventually discovered in a loft by Roger Davis after two days searching at the request of Mr Robinson). When Mr Aldous was having difficulty obtaining information from NatWest, it was Mr Robinson who intervened at the highest level to ensure every effort was made within the bank and that Mr Aldous had direct and unrestricted access to whatever information was discovered. If information remains outstanding it is not for want of effort on the part of Mr Robinson.

10.7 All of the results of the DTI enquiry were made available to the Parliamentary Commissioner, and it is expressly acknowledged that Mr Robinson has given full co-operation. In his openness to Parliament he has gone to the lengths of waiving his right to legal professional privilege so that his Leading Counsel (now a Crown Court Judge) can explain to the Commissioner the advice that was given to him.

10.8 Yet the Committee is asked to conclude on the basis of circumstantial evidence that despite the complete co-operation of Mr Robinson he has behaved illicitly and criminally. The Committee cannot properly do so. There is no direct proof to suggest that Mr Robinson is lying. Strongly in his favour is his openness and the total co-operation he has afforded to both enquiries into this issue.

The other witnesses

10.9 In the time available we have not had an opportunity to do anything other than skim the transcripts of the interviews conducted by the Parliamentary Commissioner. It appears as a general rule that only questions that might incriminate Mr Robinson were put. Lines of enquiry which might exonerate Mr Robinson were not advanced or pursued. The following is for the most part based on the evidence which the witnesses provided to the DTI, which it is understood does not materially differ from that provided to the Parliamentary Commissioner.

Michael Stoney

10.10 At paragraph 59 of the Memorandum it is suggested that it was only after he swore his affidavit (Annex LL) that Mr Stoney saw the computerised cash book which records the payment of cheque number 1751 and the cashbook voucher dated 31 December 1991. It is also suggested that it was Mr Aldous who showed these documents to Mr Stoney for the first time. The implication is that Mr Stoney was misled into swearing his affidavit. The same implication is made in the Bower book.

10.11 These suggestions are wrong and demonstrably wrong. Annex KK at page 78 is an attendance note of a meeting held with Michael Stoney on 6 April 1999. (Mr Stoney swore his affidavit on 8 November 1999.) Before the attendance note at Annex KK was finalised it was sent to Mr Stoney who approved the same as an accurate record of the meeting. The meeting with Mr Stoney lasted two hours. The computerised cash book was shown to Mr Stoney as is recorded by point 4 on the first page of the note. The cashbook voucher was shown to Mr Stoney (and extensively discussed) as is recorded by point 7 on the second and third page of the note.

10.12 These mistakes illustrate the dangers of trying to deal with a complex matter in an unrealistic time frame.

10.13 As Annex KK makes clear Mr Stoney had access to all of the available information on the Maxwell side before he swore his affidavit. He was giving evidence of what happened on the Maxwell side. His affidavit is his sworn evidence. It is suggested that the Committee should place primary reliance on this.

10.14 At paragraph 98 questions are raised about the credibility of Mr Stoney. Whilst making no comment on these suggestions, it should be borne in mind that Mr Stoney has no motive to be helpful to Mr Robinson, if anything the opposite.

10.15 Mr Stoney's affidavit evidence is

(a) that his firm recollection has always been that Mr Robinson only received one payment (the £150,000 from C&S);

(b) he cannot recall why he wrote "paid" on the invoice, but believes it may have been a mistake;

(d) that the management fee was subject to the ultimate approval of Robert Maxwell and even when he wrote "approved" on the invoice it remained subject to the final approval of Robert Maxwell.

Kevin Maxwell

10.16 As with Mr Stoney, questions are also raised about the credibility of Kevin Maxwell at paragraph 99. Again no comment is made about those suggestions, but it is clear that Kevin Maxwell has every motive to be unhelpful to Mr Robinson. Mr Robinson refused to be a character witness at Kevin Maxwell's trial (because C&S pensioners had lost money through the Maxwell organisation—money which C&S refunded). In addition Mr Robinson and Kevin Maxwell are potentially in conflict because Mr Robinson is suggesting that cheque number 1751 was paid to the benefit of somebody within the Maxwell organisation. This is most clearly bought out in an attendance note of a meeting with Kevin Maxwell on 25 February 1999 (again approved by Kevin Maxwell as accurate). Unfortunately the Parliamentary Commissioner failed to exhibit this note, so it is attached as Tab 6.

10.17 Mr Maxwell's evidence is contained in his letter (Annex OO, page 115). He states:

"Ultimately a fee of £200,000 per annum was arrived at, subject to my father's approval. I put this proposal to him in his capacity as Group Chairman. My clear recollection is that my father finally refused to sanction any such payment, despite having previously verbally agreed. He was of the opinion that Maxwell interests had lost too much money in Hollis and he was not prepared to sanction any payments to Geoffrey Robinson or any company associated with him. Consequently no payment was made."

10.18 Further evidence can be gleaned from the approved attendance note (Tab 6). This shows

(a) There was no way a payment to a director could be made without Robert Maxwell's signature;

(b) This had happened once before and had led to "near fatalities" afterwards;

(d) Kevin Maxwell's recollection of the meeting where his father refused the payment was very strong; and

(e) In reality the £150,000 payment from C&S was meant to cover everything, no matter how it was described.

10.19 The Parliamentary Commissioner has quoted from e mail correspondence with Kevin Maxwell. It is important to note that Kevin Maxwell has confirmed that he does not resile from his earlier evidence. At paragraph 72 , however, quotes are given to the effect that Kevin Maxwell "believed "on the balance of probabilities" that Pergamon made the payment (of £200,000)". This quote, together with the addition of the words in parenthesis, misleadingly suggests to the reader that Kevin Maxwell is saying that Mr Robinson received the money in question. That is not the tenor of Kevin Maxwell's evidence at all. The full answer Kevin Maxwell gives is at page 120 and as follows:

"For the avoidance of doubt I have said that I believe that the invoice and annotations are authentic. On the balance of probabilities Pergamon made the payment. What I have gone on to say is that without accurate banking information it will not be possible to be certain one way or the other and above all it will not be possible to identify the beneficiary with certainty." (emphasis added)

10.20 Thus, contrary to the impression gained by the reader of the Memorandum, Kevin Maxwell is clearly saying that the identity of the recipient of cheque 1751 is unknown. One is left with his earlier evidence from which he has not resiled.

Mrs Shirley Caddock

10.21 A central part of the case made by the Commissioner is reliance on the evidence of Mrs Caddock. Given the extent to which the Commissioner relies on this evidence it is regrettable that she did not put it, or her interpretation of it, to Mr Robinson. Like all of the witness material, the first Mr Robinson saw this was a few days ago on the late evening of 25 April, when Mr Robinson was given one day to comment on the detailed Memorandum and all of the Annexes. It is respectfully suggested that this is not the way to conduct an enquiry of this nature.

10.22 Mr Robinson's position is that the note at the bottom left hand side of the invoice was in the handwriting of Mrs Caddock, but that after ten years he could not recall any conversation.

10.23 At paragraph 30 the Commissioner has described Mrs Caddock as the Director of Finance as Hollis. This is believed to be incorrect, by some margin. Mrs Caddock was the secretary of Michael Stoney. At paragraph 134 the Commissioner has suggested that the note was added in early December 1990, but according to the note of the interview (annex NN) Mrs Caddok does not give this evidence. The date of early December is actually suggested by the Commissioner, which would suit her preconception, but which, once again, is not supported by the evidence. It would be difficult to see how Mrs Caddock could date the note after over 10 years.

10.24 The Commissioner has accepted that Mrs Caddock wrote "Geoffey is not registered for VAT. Proposes make cheque payable to him personally" after a telephone call with Mr Robinson. Mr Robinson has no reason to doubt this. It is a likely (but not the only) explanation for the post it note.

10.25 The Commissioner then makes a jump, not supported by evidence, that the cheque was actually made payable to Mr Robinson. There is sufficient doubt even for the Commissioner, because she then goes on at paragraph 144 to suggest, totally unsupported by evidence in any way, that if the cheque was not made payable to Mr Robinson, it could have effectively been "laundered" through other accounts.

10.26 Mr Robinson takes issue with the interpretation the Commissioner makes with the evidence of Mrs Caddock and also the fact that the Commissioner did not explore with Mr Robinson other possible interpretations. This is regrettable, but as readers of this draft response will have seen, is a regular feature of the Memorandum. It is possible that Mr Robinson made the proposal to Mrs Caddock. The lack of a VAT invoice may have been pointed out to Mr Robinson and, in order to speed things up, he may have suggested that he receive the money personally. However, it would soon have been pointed out to Mr Robinson (most likely by Mrs Price) that he would have had to become VAT registered himself. At the time Mr Robinson was not so registered, but he subsequently became registered in order that the payment from C&S could be properly declared, after it was pointed out to him that it was necessary for him to do so.

10.27 There is no question, as is perhaps suggested by the Commissioner's Memorandum, of avoiding VAT. As with the C&S payment the incidence of VAT would be neutral for Hollis (which was in a full recovery position) and irrelevant for the recipient. From Mr Robinson's perspective it would purely be a question of trying to deal with excuses for non payment being offered to him Maxwell interests as well as dealing with practicalities.

10.28 The use of Mrs Caddock's evidence that the Commissioner puts is not even supported by Mrs Caddock. At answer 9 she says the request would have put forward for approval to Kevin Maxwell. The evidence of what happened then is clear. Kevin Maxwell took it to his father who refused to make the payment. At point 13 Mrs Caddok is asked to speculate as to what happened next. She says she does not know and goes on to say

"It could have been changed afterwards without my knowing. I can't say as things changes so quickly at the time."

It is regrettable that the full extent of Mrs Caddock's evidence in this regard was not bought out in the Memorandum.

Dr Ahmed

10.29 In the time available, it has not been possible to do anything other than very quickly read the transcript of the interview with Dr Ahmed. Nonetheless, even on this brief review, it is clear that the tenure of Dr Ahmed's evidence has been misleading described to the Committee and that crucial parts of his evidence have simply been ignored. Only those extracts which could be used against Mr Robinson are quoted.

10.30 Dr Ahmed states that there was a rule at Transfer Technology Limited that every letter that came in would be opened centrally and given to Dr Ahmed and Mr Robinson before it was distributed to anybody else. We were not aware of this until we saw the transcript of Dr Ahmed's interview. What this means is that Michael Stoney's letters to Mr Robinson (at the Transfer Technology Limited address) of 30 April 1990 (not exhibited by the Commissioner, but at Tab 7), 23 May 1990 (Annex K) and 29 June 1990 (Annex N) would all have been opened at Transfer Technology Limited. As Mr Robinson was present only intermittently, it is likely that these letters would have been seen by Dr Ahmed first, and possibly Roger Davis also. This would not fit in with the preconception of the Commissioner that Mr Robinson hid the management fee issue from Dr Ahmed and Roger Davis, but once again, the evidence fails to support that preconception. The Commissioner has simply ignored the significance of this evidence.

10.31 Dr Ahmed explained why the management fee was not pursued. It was not put to Dr Ahmed that his explanation was "difficult". What Dr Ahmed said was that "he was concentrating on "the bigger things, that Lock would be part of the group, and these people who were working with us will become formally part of the same company which all of us will be part of". It is clear that Dr Ahmed is focusing on the commercial realities of what would happen after the merger deal. The Commissioner has simply ignored this explanation, which is the same explanation offered by Mr Robinson.

10.32 The Commissioner puts forward the false proposition that Roger Davis was not aware that a management fee was due for the work at Lock. (Roger Davis expressly acknowledges that he was aware of this fee in his affidavit.) The Commissioner pursues the matter aggressively, challenging Dr Ahmed "are you saying he [Roger Davis] is lying?" Dr Ahmed persists in saying that Roger Davis was aware of the fee, because of the open way in which the company was run.

10.33 Dr Ahmed confirms his affidavit that he is not aware of the receipt of the money from the Maxwell organisation. He acknowledges that if Mr Robinson was acting dishonestly and "laundered" the money then he would not be aware of it. The Commissioner has chosen to quote these parts of the transcript at paragraph 77 of the Memorandum, but misleading fails to give the full answers provided by Dr Ahmed. He continues at page 147 to the Memorandum:-

"I feel strongly it is very unlikely that this was the case. Mr Robinson had £150,000 before that at the same time which was from Maxwell as well for the works with A L Dunn and Coventry Apex and this went to his account and everything. If he has taken £200,000 in the same way, at the same time, why would he have treated it differently? I have known Geoffrey for 20 years, and Geoffrey has anybody, like me, like anybody, will try to take a risk and do everything, but I have never seen him at any time during the 20 years which we worked together -which when it comes to finance he would ask and if Roger said "We cannot do this", that is it. I do not think he would try to be anything (there is a line there) because he is very conscientious about his position. I think this is a very small story. Somebody a long time ago bought one machine for us and we were selling it for £15,000 and he said "I will pay you £10,000 in cash", and of course we laughed and we would not have done anything like this. Geoffrey never, ever - I saw him stretching everything, doing everything which is really like any businessman will try to do, but when it came to something like this, when it came to tax, accounting, anything like this, I think he is very conscientious. He is not a stupid person."

10.34 There is no reason to doubt the credibility of Dr Ahmed. His evidence is based on 20 years experience of working with Mr Robinson. He is of the view that the money was not received and that Mr Robinson would never do anything illegal. It is regrettable that the Parliamentary Commissioner chose not to put this evidence in the Memorandum, but to misleadingly put only the first part of the answer.

Roger Davis

10.35 As with Dr Ahmed, in the time available, it has not been possible to do anything other than very quickly read the transcript of the interview with Roger Davis. Roger Davis was the Finance Director of Transfer Technology Limited. After the merger a new Finance Director was recruited to become Finance Director of C&S because Roger Davis' experience and qualifications were not sufficient to be a finance director of a plc. Roger Davis remained within the group as a financial controller.

10.36 The interview with Roger Davis appears to be a tape recorded telephone conversation. By definition no paperwork will have been shown during the course of that telephone conversation to Roger Davis to assist him with the evidence that was being taken.

10.37 Essentially Roger Davis' evidence covers non controversial matters.

10.38 The Commissioner has attempted to twist the evidence given by Roger Davis in what must have been a brief telephone call to suggest that Roger Davis was unaware that a management fee was due. The position of Roger Davis is made absolutely clear in his sworn affidavit evidence. At paragraph 2 he refers to the work carried out by Transfer Technology Limited at Lock and the proposal that there be a fee of £200,000. At paragraph 4 he states:-

"To the best of my knowledge, information and belief neither Transfer Technology Limited or any associated company has ever received the management fee. Equally I am unaware that Geoffrey Robinson ever received a payment himself, either direct from Maxwell interests or through Transfer Technology Limited or its associated company. My recollection is that in the end the management fee was never paid. As Finance Director of Transfer Technology I would obviously be aware of such a large receipt by the company or its subsidiary".

10.39 Roger Davis did not resile from his affidavit. It can be seen that the Parliamentary Commissioner sought to persuade Roger Davis to change this evidence, but that he refused to do so.

11. Standard of Proof

11.1 The fundamental question of the standard of proof has recently (21 December 2000) been carefully considered by the Committee (in its Second Report for the Session 2000-2001), albeit in the very different context of the complaint against Mr John Maxton and Dr John Reid. In that context the Committee reached three conclusions as to the appropriate standard of proof to be applied:-

A mere balance of probabilities is not enough;
The allegations could not properly be upheld unless the Committee were persuaded that they were "significantly more likely" to be true than not true;
It was not, however, necessary in that case for the complaint to be established beyond reasonable doubt, since it did not "involve criminal charges or criminal sanctions".

11.2 Taking that approach as a starting point, in the case of Mr Robinson the position must be that:-

A mere balance of probabilities would be even more inappropriate;
At the very least, the allegations could not properly be upheld unless the Committee were persuaded that they were "significantly more likely" to be true than not true;
In this case indeed it is necessary for the complaint to be established beyond reasonable doubt, because it does on this occasion involve allegations of criminal conduct and the prospects of criminal sanctions.

11.3 Two basic weaknesses of the Commissioner's Memorandum are that:-

It is unclear what standard of proof she is purporting to apply;
She does not appear actually to be applying even the loose standard she sets herself.

11.4 The Commissioner addresses the question of standard of proof briefly in paragraph 6 of her Memorandum. She identifies there a standard of proof "stricter than" the mere balance of probabilities. What, however, is wholly unclear is how much stricter?

11.5 On any view, the test would not be strict enough if it fell short of the "significantly more likely" test.

11.6 Certainly she has not applied the criminal standard. See e.g. the references to doubt in paragraphs 158 and 163 and to lack of proof in paragraph 132.

11.7 Moreover, it seems clear that she has not even applied the "significantly more likely" test. Indeed it appears that she has throughout actually applied (at best) a mere balance of probabilities test. This must be wholly wrong.

11.8 Never is the Commissioner's approach in relation to disputed issues any stricter than the mere balance of probabilities. On the contrary every critical finding is on the basis of:-

Either the mere balance of probabilities, e.g. paragraphs 101, 125, 137, 139, 142 and 143;
Or speculation and conjecture, e.g. paragraphs 140, 141 and 144.

11.9 It is clear that:-

The Commissioner's conclusions are fatally flawed not least because she has proceeded on the basis on far too lax a standard of proof;
The Committee must consider (no doubt with the benefit of legal advice) what sufficiently stringent standard of proof to apply;
The Committee must then come to its own conclusions, based rigorously on that standard of proof.

12 Conclusions

12.1 Having examined the evidence we come back to the central question as to whether Mr Robinson directly or indirectly received the £200,000. At paragraph 8.2 and 8.3 above we suggested that the only way the Committee could conclude that Mr Robinson had received the £200,000 was if it made 11 separate findings, and that it was necessary for the Committee to be satisfied on each and every one of these findings. We comment below on these 11 matters.

Without the knowledge of Michael Stoney and Kevin Maxwell, between 26 November and 7 December 1990 Mr Robinson approaches Robert Maxwell direct and succeeds in changing his mind by persuading him to pay the management fee after all;

12.2 The Michael Stoney memo (Annex R) shows that no payment had been made by 26 November 1990. NatWest say that cheque number 1751 was banked on 7 December 1990. Therefore if anything took place it did so in between these two dates.

12.3 The following evidence all states that if a payment was to be made to Mr Robinson it would require the approval of Robert Maxwell.

(a) the Affidavit of Michael Stoney;

(b) the approved attendance note of the meeting with Michael Stoney;

(d) the letter of Kevin Maxwell;

(e) the approved attendance note of the meeting with Kevin Maxwell; and

(f) the Commissioner's exchange of e mails with Kevin Maxwell

12.4 The Commissioner was also provided with contemporaneous evidence that the management contract was subject to Robert Maxwell's final approval. Unfortunately this evidence was not referred to or exhibited to the Commissioner's Memorandum. The evidence is a letter from Michael Stoney to Mr Robinson dated 30 April 1990 (now at Tab 7) where Mr Stoney says:

"Obviously any agreement between Hollis Industries/Lock and TransTec will be subject to the Group Chairman's [i.e. Robert Maxwell's] final approval."

12.5 Unfortunately the Commissioner's Memorandum does not deal at all with the necessity for the obtaining of the approval of Robert Maxwell or how this approval was actually gained. What all of the evidence shows, however, is that no payment could be made to Mr Robinson without Robert Maxwell's approval.

12.6 The clear, unequivocal and stark evidence of Kevin Maxwell is that ultimately Robert Maxwell refused to sanction the payment, despite having verbally agreed to it before, because he was of the view that Maxwell interests had already lost enough money in Hollis. It is perfectly possible to imagine that this is the sort of thing that Robert Maxwell would have done.

12.7 The evidence of both Michael Stoney and Kevin Maxwell was that if Mr Robinson received the £200,000 then they did not know about it. In the approved attendance notes (Annex KK and Tab 6) they both talk of the necessity for Mr Robinson approaching Robert Maxwell to change his mind and Kevin Maxwell says that such a scenario "does not appear likely" to him. (Tab 6 page 3).

12.8 As noted above neither Michael Stoney nor Kevin Maxell have a motive for lying or being helpful to Mr Robinson. In fact, and especially with Kevin Maxwell, the opposite is true.

12.9 So it is clear then that if the payment was to be made to Mr Robinson, Mr Robinson would have had to approach Robert Maxwell direct between 26 November and 7 December 1990. Where then is the evidence that Mr Robinson dealt with Robert Maxwell in this period? The answer is that there is no evidence at all of a meeting or a telephone conversation, and that the contemporaneous evidence actually suggests that there was no such meeting or telephone call.

12.10 Mr Robinson's diary does not record any meeting with Robert Maxwell, whereas one would expect it to do so, just as it recorded Mr Robinson's meeting with Kevin Maxwell on 23 October. The only possible diary entry where Mr Robinson might have met Robert Maxwell in the period was a C&S board meeting of 7 December 1990. The Commissioner has now established that Robert Maxwell did not attend any part of that meeting. (Annex DD) [The Committee should also note that Kevin Maxwell's recollection is that Robert Maxwell was in New York in or around December 1990 negotiating the purchase of the New York Daily News.] It is respectfully suggested that the Committee should conclude that no meeting between Mr Robinson and Robert Maxwell took place in this period.

12.11 Mr Robinson's notebooks for the period survive and have been voluntarily made available to those investigating this subject. There are two entries relating to Robert Maxwell. On 4 December Mr Robinson arranges with an aide to subsequently speak with Robert Maxwell (Tab 1). On 12 December the pre-arranged conversation eventually takes place and the £150,000 payment from C&S to Mr Robinson is agreed (Tab2). There are no other references. The notebooks contain extensive and detailed entries. Given this fact it is likely that the notebooks would have contained a further entry if there had been a conversation with Robert Maxwell. It is respectfully suggested that the Committee should conclude that no further conversation took place.

12.12 All the evidence points to the need for Mr Robinson to change the mind of Robert Maxwell (something in itself which might be imagined to be unlikely and which Kevin Maxwell says was unlikely). There is no evidence that Mr Robinson actually had such an opportunity in the relevant period. The reasonable inferences that can be drawn from the contemporaneous evidence is that Mr Robinson did not meet or speak with Robert Maxwell in the critical period. If the Committee agrees with this, then the case against Mr Robinson falls down here.

Robert Maxwell issues cheque number 1751 made payable to Mr Robinson or his nominee and signs the cheque alone

12.13 All the evidence is to the effect that the bank mandate allowed for Robert Maxwell to sign a cheque alone, otherwise it would require the signatures of two directors including Michael Stoney and Kevin Maxwell.

12.14 Michael Stoney and Kevin Maxwell do not recall signing this cheque. Indeed their recollection is to the opposite that Mr Robinson did not receive this money. This suggests that the cheque was issued and signed alone by Robert Maxwell.

12.15 Michael Stoney's sworn evidence is that the cheque was one from a special cheque book, not off the normal run. Again this reinforces the idea that the cheque was issued and signed by Robert Maxwell alone.

12.16 This point is further reinforced by the overwhelming evidence that a payment to a director required the approval of Robert Maxwell. It would be wholly against the weight of evidence for the Committee to conclude that the cheque was issued and signed by Michael Stoney and Kevin Maxwell.

On 7 December 1990 either Mr Robinson banks the cheque at Tavistock Square or Robert Maxwell, at Mr Robinson's direction, arranges for the cheque to be paid into the Tavistock Square branch

12.17 The idea of Mr Robinson being able to change Robert Maxwell's mind to actually make the payment in the first place may seem improbable enough to members of the Committee. It seems very unlikely that Robert Maxwell would have agreed to arrange to bank the cheque at Mr Robinson's direction. Tavistock Square is not the normal branch where Maxwell interests banked.

12.18 Mr Robinson's financial affairs were (and still are) totally handled by Mrs Brenda Price. By 1990 Mrs Price had handled Mr Robinson's financial affairs for many years. When Mr Robinson received a personal cheque it would be Mrs Price who banked it. Where Transfer Technology Limited received a cheque it would be Roger Davis (or in his absence presumably Dr Ahmed) who arranged for it to be banked.

The credit of £200,000 from the Tavistock Square Branch to the Colemore Row Branch reflects cheque number 1751.

12.19 Nat West Bank, when pressed, have refused to link the two matters. They have repeatedly stressed that the credit and the cheque may be unrelated (see Annex T and Annex U pages 31 and 32 to the Memorandum). The Commissioner takes the view that "it is unlikely" that they are unrelated. She has no evidence for this. Both Tavistock Square and Colemore Row are large branches. During the course of the DTI enquiry five or six £200,000 entries in Transfer Technology Limited, Hollis or PAGB or around the time period were found (such as, to take one example, a £200,000 "permanent" loan made by Mr Robinson to Transfer Technology Limited. We have found no record of this being repaid to Mr Robinson and one possible explanation is that the two amounts were offset against each other). Nat West have refused to make the link. The Committee has to be satisfied, unlike Nat West, that the cheque and the credit are part of one and the same transaction.

Roger Davis mis-records the date of receipt as 10 December 1990 in the books of Transfer Technology Limited. (He would normally record the receipt from the date of the paying in slip (7 December) or the bank statement which could not be earlier than 11 December.)

12.20 The date of 10 December is a contemporaneous piece of evidence and therefore the Committee should give more weight to it. If correct, it cannot be the same money as the PAGB cheque and, as slim as the margin may seem, the case against Mr Robinson fails. If the Committee is considering taking the view that it is possibly a mistaken date, then the Committee has to examine the possibility that either the date is earlier than 10 December or indeed that the entry in the nominal ledger is incorrect in the first place. The Committee is not in a position to examine either possibility. The only thing it can safely do is proceed on the basis that the date is correct, until such time as direct evidence is found to show that it is not.

Mr Robinson misleads his closest business colleagues and friends (Dr Ahmed and Brenda Price), as well as Roger Davis by telling them that the Maxwell monies were not received and pretending that he has found a different £200,000 to reduce the Roll Center debt

12.21. This would appear to be inherently unlikely. We have already commented upon the fact that Mrs Price (who the Commissioner decided not to interview) managed all of Mr Robinson's financial affairs It would be particularly difficult for Mr Robinson to fool Mrs Price about his obtaining £200,000, because she was aware of his family business, his financial relationship with members of his family, his other commercial interests and his friendship with people who had in the past provided financial support. It would have required a quite extraordinary degree of deliberate deception on the part of Mr Robinson to deceive Mrs Price. We would like Mrs Price to be able to give evidence before the Committee.

12.22 Dr Ahmed and Roger Davis were both aware that Mr Robinson was seeking to obtain £200,000 payment from Maxwell interests in respect of the management contract. They both say so in their sworn affidavits. Both have acknowledged that it would have been theoretically possible for Mr Robinson to say that the Maxwell £200,000 had not been collected and then for him to introduce the money to Transfer Technology Limited as having come from another source. Again, for Mr Robinson to have done this would have required a deliberate and cynical deception of both. Neither Dr Ahmed nor Roger Davis believe that Mr Robinson did this. It would have been even more difficult for Mr Robinson to do this given the rule that existed at Transfer Technology Limited for opening post, meaning that Michael Stoney's correspondence on the subject would likely have been seen by Dr Ahmed and would have been available to Roger Davis.

12.23 The Committee may consider it relevant to consider what motive Mr Robinson had to mislead Dr Ahmed, Roger Davis and Mrs Price . If Mr Robinson wanted to take the Maxwell management fee personally, then essentially there was nothing to stop him doing so (as Dr Ahmed acknowledges). He was the 99.% owner of Transfer Technology Limited. It was a private company. There is no reason to believe that Dr Ahmed, Roger Davis or Mrs Price would object if Mr Robinson chose to take the money personally. Thus there was no reason for Mr Robinson to deceive any of them. Yet, on the basis that the credibility of Dr Ahmed and Roger Davis is sound, the Committee must conclude that Mr Robinson did deceive them, even when he can have had no possible motive for doing so.

Having persuaded Robert Maxwell to make the management contract payment, Mr Robinson then, only a few days later on 12 December 1990, persuades Robert Maxwell to make the C&S payment

12.24 If the Committee is to find that Mr Robinson did receive the £200,000, then it will have had to find that

(a) Mr Robinson was first able to change Robert Maxwell's mind over the making of the £200,000 payment between 26 November and 7 December; and

(b) secondly that Mr Robinson was able to persuade Robert Maxwell to make the C&S payment of £150,000.

12.25 When considering the inherent probabilities of such a scenario the Committee will have to bear in mind that Mr Robinson had no contractual or legal right to receive the C&S payment. Mr Robinson was seeking the payment on the basis that it would be just to make the payment bearing in mind the results of his work over the proceeding three years.

12.26 The Committee will also have to bear in mind the evidence of Kevin Maxwell that, however it was described, the £150,000 payment was meant to cover everything i.e. the work at C&S and the management contract. The Committee might also consider it relevant that any payment to Mr Robinson from PAGB would be 100% financed by Maxwell interests. In contrast the payment to Mr Robinson from C&S was from C&S's own funds. At the end of the merger deal Maxwell interests would only own (and therefore bear the proportionate cost) approximately 25% of C&S. The Committee might think that such considerations would have played a part in Robert Maxwell's thinking.

12.27 Ultimately to find against Mr Robinson, the Committee will have to be satisfies that Mr Robinson was able to persuade Robert Maxwell to make both payments. It is respectfully suggested that the probabilities are that Mr Robinson would not have been able to do so.

Robert Maxwell is so persuaded of the case despite the fact that Mr Robinson had received £200,000 the previous week, and the C&S payment is documented by way of written board resolution and paid inside 9 days on 21 December 1990;

12.28 This builds from the previous point. The C&S payment was paid 9 days after Robert Maxwell agreed it, and only after a written resolution of the board of C&S was obtained. For the Committee to find against Mr Robinson, it will have to conclude that Mr Robinson's powers of persuasion were such that he was able to get the Maxwell organisation to move so quickly.

12.29 It is suggested that the more likely explanation was that there was embarrassment and awareness in the Maxwell organisation that Mr Robinson had, with cause, been pressing for payment to Transfer Technology Limited for some time. The payment from C&S, and its speed, was to make up for this. This is the evidence of Kevin Maxwell.

Although Mr Robinson paid income tax and VAT on the C&S payment, he deliberately chose not to do so on this alleged payment;

12.30 In order to find that Mr Robinson received the £200,000, the Committee will have to conclude that he deliberately committed the criminal offence of tax evasion.

12.31 The only direct evidence before the Committee as to how Mr Robinson would have treated a payment from Maxwell interests is how he treated the C&S payment. It was properly declared at every level. Mr Robinson's treatment of the C&S payment is strong evidence as to how he would have treated any other payment.

12.32 The C&S payment:

(a) was of similar amount to the alleged receipt

(b) was dealt with one week after the alleged receipt ; and

12.33 Despite these similarities the Committee is being asked to conclude that Mr Robinson received the £200,000 and treated it in an entirely different fashion from the C&S payment. There is no evidence for the Committee to make such a grave conclusion, and yet this is precisely what the Committee will have to conclude if it is to find that Mr Robinson received the £200,000.

Although Mr Robinson registered the C&S payment at Parliament, he deliberately chose not to do so for this alleged payment

12.34 As with the previous point, the manner in which the C&S payment was properly registered at Parliament is strong evidence to suggest that if Mr Robinson had received the £200,000 he would have registered it. The reason it was not registered is because Mr Robinson did not receive it.

Mr Robinson has deliberately lied about this matter ever since.

12.35 There is not the possibility of a mistake on the part of Mr Robinson. The conclusion must be that Mr Robinson has deliberately lied about this matter. If so then he has behaved in a very odd manner by volunteering information which has subsequently been used against him. Mr Robinson could not have been criticised if he had not volunteered this information. Surely if Mr Robinson was bent on a policy of deliberate deception he would not have done so.

12.36 In fact Mr Robinson's open conduct throughout this enquiry and the DTI enquiry before is strong evidence of an honest man seeking to clear his name in a proper fashion. The Committee should so conclude.

13. Submissions

13.1 We invite the Committee to conclude on the material before it that none of the complaints are substantiated.

13.2 If, however, the Committee were to feel unable, at this stage, to come to that conclusion then we would invite the Committee to consider that further investigations should include at least the following:-

(i) interviewing witnesses, which will include, as a minimum, taking evidence from Charterhouse, Mrs Price and Dr Ahmed;

(ii) taking independent legal advice on the standard of proof necessary in this case and on the fact that the Roll Center loan could have been repaid using the consideration monies from the C&S merger; and

(iii) directions for further search for the cheque, the cheque stub and any further associated documentation on the Maxwell side. (It should be noted that Mr Robinson had no power to conceal any of this documentation and, on the Commissioner's case, he is simply "fortunate" that this documentation is missing.)

30 April 2001

Dechert

Tab 1

Extract from Mr Robinson's notebook for 4 December 1990

4/12	RM : Go away next [?]
	GR to phone next Sunday

Tab 2

Extract from Mr Robinson's notebook for 12 December 1990

12.12	RM : Very sensible	£150K
		expenses
		£20K [?]

Tab 3

Written resolution of the board of C&S dated 19 December 1990

for the payment of £150,000 to Mr Robinson

CENTRAL & SHEERWOOD PLC

Pursuant to the authority given by Article 100 of the Company's Articles of Association we, the undersigned, being all the directors for the time being of Central & Sheerwood PLC entitled to vote upon such resolution hereby resolve:—

"THAT the payment to Mr Geoffrey Robinson of the sum of £150,000 (one hundred and fifty thousand pounds) as remuneration for the period from 29 July 1987 to 31 December 1990 and in recognition of his contribution, as Chairman of Holcombe Holdings PLC, in the turnaround in profitability at A L Dunn & Company Limited and Coventry Apex Engineering Company Limited be and is hereby approved."

Signed:—

[Signature] 19 December 1990

I R Maxwell Date

R J Rimington Date

C J Emson Date

J R K Bowdidge Date

K F H Maxwell Date

CENTRAL & SHEERWOOD PLC

Signed:—

I R Maxwell Date

[Signature] 19.12.1990

R J Rimington Date

C J Emson Date

J R K Bowdidge Date

K F H Maxwell Date

CENTRAL & SHEERWOOD PLC

Signed:—

I R Maxwell Date

R J Rimington Date

[Signature] 19 Dec 90

C J Emson Date

[Signature] 19/12/90

J R K Bowdidge Date

K F H Maxwell Date

CENTRAL & SHEERWOOD PLC

Signed:—

I R Maxwell Date

R J Rimington Date

C J Emson Date

J R K Bowdidge Date

[Signature] 19/12/90

K F H Maxwell Date

Tab 4

Extract from Mr Robinson's notebook for 13 November 1990

13/11 MBS Agreed £200K by cheque to TransTec this week.

Tab 5

Management accounts for Hollis Industries for October 1990

See Appendix 1 Annex Q.

Tab 6

Attendance note of meeting with Mr Kevin Maxwell

on 25 February 1999

Titmuss Sainer Dechert

ATTENDANCE NOTE

Date:	25 February 1999
Name:	Bernard O'Sullivan
File No:	042-672
Client:	Geoffrey Robinson
Matter:	Personal Affairs

Work Involved:

Documents:

Bernard O'Sullivan meeting with Kevin Maxwell at his offices 17-19 Maddox Street.

I took KM through the entry in the Natwest Bank Pergamon AGB cash book for December 1990. KM immediately stated that just because it was entered in the cash book did not mean that money had actually passed. I said that I had been informed by the Inspector that the Pergamon AGB bank statements showed that cash had been paid out on 11 December 1990.

I took KM through the invoice and the cash book voucher. KM made the point that the voucher was dated 31 December 1991. I said that I believed that was a mistake. KM said that they may not be so. I also pointed out that the cash book voucher form showed that the cheque was payable to "orchards". KM said it was a mess; how can you pay a house.

KM referred to the 26 November 1990 memo. He confirmed that the handwriting in the bottom right hand side was his note to bring the matter forward to his father for his approval. The handwriting at the top right hand side which says "dealt with" was KM's secretaries hand writing. KM also made the point that this was one of the very few notes that Michael Stoney signed. I said that there was a strong presumption that the £200,000.00 payment by Pergamon AGB related to the 24 October 1990 invoice. Chronologically the cash book voucher followed from the next cheque number 1752.

KM said that within 24 or 48 hours of receiving the 26 November 1990 note he would have been raising the matter with his father. He received a lot of post. It usually took his secretary 24 hours to sort it all out. He would then see his father each morning. Sometimes he would spend up to three hours with his father. Other times it would be ten minutes. KM would have a great big tray of things to go through.

Sometimes KM would prepare lists of issues to be dealt with. Some of those still survive. It is possible they will list remuneration for Geoffrey as an issue.

KM said that from memory his father was in New York in and around December 1990. At the time he was negotiating to by the New York Daily News.

RM and KM's diaries are stored electronically from the trial. KM will check with the achivist to see if he can establish whether RM was in the Country in the period 26 November through to 11 December 1990.

KM's recollection is that the issue of paying the £200,000.00 management fee was a contentious issue. It had taken along time to get RM's approval. Right at the end once his approval had been obtained, he changed his mind again. Throughout RM did not want to pay the £200.000.00 fee.

KM has a very clear recollection of the meeting with RM. It took place in RM's room in the Mirror building. RM refused to make the payment.

Before any payment could be made it was necessary to obtain a signature or scrawl from RM on a piece of paper. Only once that signature or scrawl was available would KM make the payment. It was when he was obtaining the signature that RM finally refused to make the payment.

This was a payment to a director. There is no way in which a payment to a director could have been made without RM's signature. It did happen once before in relation to Bernard Donoghue. In KM's words this "led to near fatalities" afterwards. Following that there was no way a payment to a director was going to be made without RM's approval. KM would not have signed the cheque without RM's approval.

At the time RM could sign the cheque on his own. Otherwise it would have taken two directors of PAGB to sign the cheque.

I explained to KM that as the money had definitely been paid out of PAGB there were really three alternatives. The first was that the money went to Hollis. The Inspector had not ruled this out, although the accounting entries seem to suggest that this was not the case. The second was that the money went to GR or at GR's direction. If that was the case then so be it. GR was adamant that he had not received it and looking at his affairs it did appear that he had not received it. The third was that someone within the Maxwell Organisation had had the money. If that was the case then this was false accounting. I said to KM that in many respects we could be in conflict with each other. I was proving that GR did not receive the money which could lead to the conclusion that someone within Maxwell did this. KM said several times that he was comfortable about this.

KM said that the first question GR had asked him when they met was did RM have the money. KM said absolutely not to this.

KM gave an example of someone in the trial who had forgot that they had signed on a $100 million foreign exchange transaction. The witness was adamant that he hadn't signed it but it was proved that he had. Errors over recollection do occur even over extremely large amounts.

That said KM's recollection of the meeting with RM is very strong. The only thing that KM can suggest is that possibly GR changed RM's mind after the meeting. That does not appear likely to KM.

KM said that in reality the £150,000.00 payment from C&S was meant to cover everything. It may have been described as relating to only the C&S companies but in reality as far as he was concerned it covered everything. That was the truth of the situation.

I told KM that the letter he had signed remained located in my drawer and I would not use it in the current uncertainty. In response to this KM said he did not resile from the letter. It could be used. He was checking his recollection. He had drawn comfort in his recollection from Michael Stoney saying that the money was not paid and from GR saying he never received it. Nonetheless, leaving these two aspects aside, KM was still left with his firm memory.

KM said that until he saw a cheque with his signature on it that is where he would leave it.

Tab 7

Letter to Mr Geoffrey Robinson MP

from Mr Michael Stoney

I refer to your letter to Kevin Maxwell of 4 April 1990 in connection with the provision of management contract for Lock International.

Obviously any agreement between Hollis Industries/Lock and Transtec will be subject to the Group Chairman's final approval. However, I have been asked by Kevin if I could comment on your proposal, but before doing so, I would be grateful if you could provide further details of the type and level of support that Transtec will be providing to Lock International. Your note mentions, for example:

1. Geoffrey Robinson as Executive Chairman;

2. Further management support to AML in Engineering, Marketing, etc

It would be extremely useful if you could provide some sort of analysis of what this will in fact entail.

30 April 1990

Tab 8

Enclosure to Mr Geoffrey Robinson's letter of 3 May 1990

describing the management services to be provided

TRANSTEC/AML MANAGEMENT AGREEMENT—SUMMARY

The following are required:

Chairman/Chief Executive

Chief Development Engineer and Electronics and Software Support

Marketing Director—with specific direct responsibility for Lock Inc the USA operation.

TransTec commitment will as a minimum comprise the following:

1. TransTec will supply GR as Chairman and Chief Executive. This is currently taking about 3 days per week but should drop to 2.

2. TransTec has already committed full time its own Chief Electronics Engineer, Mr W Andrews, to get the MET 10 product's problems sorted out. Bill Andrews will be supported by:

Dr Mark Wybrow, Senior Software Engineer

Mr Richard Williams BSc, Electronics Engineer

All the TransTec team are QSE's

NB: There are other critically important product developments at AML that must be successfully completed over the next two years if AML is to regain market share.

3. Mr Mike Sorby, TransTec's Commercial Director, will take overall responsibility for AML Inc in the USA (David Brotherton the present President of US Inc is the only remaining Colin Robinson appointee. We have to be very careful. GR has mentioned this to RM.) Monthly visits are likely to be required for the next six months at least.

Other Considerations

4. The agreement will be for a period of two years and entitle TT to 30% of AML audited PBT;

5. All IPR arising from point 2, or otherwise, on Lock products will be AML property;

6. There will be no cross charges for expenses from TT to AML;

7. Pergamon Internal Audit controls will operate as usual;

8. During the management period no senior debt interest or dividends will be paid;

9. AML and Lock Inc balance sheets to be cleaned up in agreement with Michael Stoney.

3 May 1990