Tag: Asil Nadir

  • Secret deals in Cyprus that gave Asil Nadir big break

    Secret deals in Cyprus that gave Asil Nadir big break

    By Chris Summers BBC News

    Asil Nadir arrives with his wife Nur at the Old Bailey in London in 2011 Asil Nadir with his second wife, Nur, who was still a child when he fled the UK in 1993
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    • Asil Nadir jailed for 10 years
    • How Asil Nadir charmed the City
    • How Asil Nadir stole millions

    Former tycoon Asil Nadir has been jailed for 10 years after being convicted by a British court of stealing millions of pounds from his Polly Peck business empire.

    Nadir got his big break in business after the Turkish invasion of Cyprus.

    “He is a symbol in Cyprus,” says veteran Greek Cypriot politician Alexis Galanos, “for the taking of land and property that did not belong to him and was given to him by [the late Turkish Cypriot political leader, Rauf] Denktash.”

    In the 1980s and early 90s Asil Nadir was the darling of the City of London as the share price of his Polly Peck International (PPI) empire went up and up.

    The business collapsed in October 1990, and three years later he fled to northern Cyprus.

    But it has since emerged his big break may have come as a direct result of the Turkish invasion of Cyprus in 1974.

    Nadir was born in northern Cyprus in 1941, the son of a modest Turkish Cypriot businessman, and grew up in the Agios Loukas district of Famagusta.

    He had several Greek Cypriot friends at school and never promoted nationalist views.

    People who knew him say politics always played second fiddle to money.

    In 1963 he moved to London and set himself up in business as ethnic tensions were emerging in his homeland.

    View of Famagusta from UN post Famagusta, where Asil Nadir grew up, is now largely deserted as Cyprus reunification talks grind on

    Nadir looked on from afar as Turkey invaded in 1974, following a coup by Greek nationalists in Nicosia.

    Nadir gave his own take on the invasion to the jury at his recent trial: “There was a problem with the two communities and there were three signatories to the Cyprus [1960 independence] treaty – Greece, Turkey and Britain – to make sure they did not annihilate each other.

    “[In 1974] Britain and Greece declined and Turkey, after consultation with Britain, went in there and intervened.”

    When the dust settled the Turks found themselves in possession of property, factories and orchards abandoned by their fleeing Greek Cypriot owners.

    ‘Many unknowns’

    Giving evidence, Nadir said: “After the war the island was split into two. There was a population exchange. All the Turks in the south went to the north and the Greeks in the north went to the south.”

    In the 1980s, the economy of the north, hit by a trade embargo, was in dire straits and Rauf Denktash sought out entrepreneurs within his community.

    Nadir volunteered, with one eye on the profit margin.

    Rauf Denktash (right) Nadir later fell out with Turkish Cypriot leader Rauf Denktash, who died earlier this year

    He told the Old Bailey trial he had not done anything improper but added: “Because of the settlement there were a lot of unknowns and a lot of difficulties and a lot of opportunities with properties.

    “The government in the north created property points that were given to people who were displaced from their previous areas. Property points were like title deeds and you could acquire the properties [left by the Greek Cypriots].

    “There was a legal market in Cyprus which my family was involved in.”

    Over the next few years Nadir took over a number of hotels, factories, warehouses and citrus fruit orchards.

    These included the Jasmine Court apartment complex in Kyrenia and the Constantia Hotel (since renamed the Palm Beach Hotel) in Famagusta.

    The Nadir trial was shown a glossy PPI promotional video, made in 1989, which featured both the Palm Beach and the Jasmine Court.

    Map of Cyprus

    It was also shown a 1988 contract by which the self-declared Turkish Republic of Northern Cyprus (TRNC) leased out Jasmine Court to PPI’s subsidiary, Voyager Kibris.

    Yiannis Varnava, who fled the Constantia at the time of the invasion aged 15, told the BBC: “We left Famagusta several days before the Turks came but it has been a working hotel ever since.”

    Famagusta, which was an overwhelmingly Greek Cypriot town, is now part of the TRNC but it has a strong Greek Cypriot exile community and even a football team, Anorthosis, who play in exile in Larnaca.

    Mr Galanos, elected mayor-in-exile of Famagusta in 2006, says: “What happened in Cyprus cannot be remedied easily. It makes it very difficult to unify the island. Most of the Greek Cypriot owners are still trying to get compensation.”

    Citrus centre

    Along with large areas of fruit orchards, Nadir was also handed a fruit-and-vegetable packaging plant at Kato Zodia, near Morphou, which had belonged to a Greek Cypriot fruit growers’ co-operative, Sedigep.

    Fruit packing plant in TRNC This originally Greek Cypriot-owned fruit packing plant in northern Cyprus was taken over by Asil Nadir

    Panicos Champas, general secretary of the Union of Cypriot Farmers, told the BBC: “From an early age I used to help my parents with the farm we had in Kato Zodia.

    “Now, 200 metres from our house is the packaging factory where, we learned, Asil Nadir illegally traded our products, utilising the factory owned by us producers.”

    Mr Champas said, in his opinion: “Asil Nadir is an illegal merchant who has been exploiting our properties for many years and gaining money at our expense.”

    Nadir referred in court to Morphou by its Turkish name, Guzelyurt, and said that 80% of citrus grown on the island grew in this area.

    PPI, he said, owned thousands of citrus plantations in the Morphou area.

    In 1980 he took over PPI, and its early success was built on fruit juice.

    PPI’s main subsidiaries were Uni-Pac Packaging and Sunzest Trading.

    ‘For virtually nothing’

    Many people in the Greek Cypriot community, both on the island and in the UK, believe the leg-up Nadir was given by Mr Denktash played a considerable part in his rise.

    Kyrenia Kyrenia – known to the Turks as Girne – is now a prime holiday destination

    Costas Apostolides, an economist and journalist with the Cyprus Mail, was the first to write about Nadir’s property deals in the 1980s.

    He told the BBC: “He received various properties for virtually nothing. Initially it was citrus-growing areas and later hotels and a large complex of flats in Kyrenia.”

    Mr Apostolides said Nadir had been given large tracts of land at Alacati (Alagadi) and Voukalida (Bafra), both of which had beautiful beaches and “fantastic potential” for tourist development.

    By the late 1980s, he was the doyen of entrepreneurs and was raising millions from shareholders.

    But Mr Apostolides said: “This land belonged to displaced people. They have not cost [the Turks] anything and you are then giving them to somebody else to exploit.”

    Nadir’s trial at the Old Bailey heard allegations the 71-year-old had stolen more than £100m from PPI between 1987 and 1990 and fed it back to banks in the TRNC.

    Mr Denktash, his political ally, sheltered him after he jumped bail in 1993 and fled back to the island, but publicly broke with him the following year.

    Mr Denktash called for his arrest on charges of tax evasion but no action was taken.

    As a citizen of the TRNC, a state only recognised by Turkey, he could not be extradited to the UK.

    Asil Nadir court sketch Asil Nadir told the trial he had become involved in the “legal market” for property in northern Cyprus

    Eleni Meleagrou, a lawyer specialising in reclaiming Greek Cypriot property in the north, said she herself had discovered that an area of orange groves which belonged to her father had ended up in Nadir’s hands.

    Ms Meleagrou, the former wife of writer Christopher Hitchens, said: “A plot in Kapouti, near Morphou, had been leased by the TRNC to Asil Nadir to use as a plant producing orange juice from the orange groves in the area.”

    She is one of a number of Greek Cypriots who have applied to the Immovable Property Commission, a body set up by the TRNC to assess claims to ownership of land in northern Cyprus.

    The Turkish Cypriot authorities said recently the Immovable Property Commission had paid out £60m in compensation to Greek Cypriot land-owners.

    Nadir stayed a fugitive in northern Cyprus, occasionally venturing over to Turkey, until 2010 when he decided to return to the UK to face the music.

    But in 1998, eight years after PPI collapsed, four companies – the Marangos Hotel Company, Pharos Estates, Sedigep and Cyprus Ports Authority – took legal action against PPI’s administrators.

    The judgement in the Court of Appeal ruled the English courts had no jurisdiction to hear the claim.

    Nadir’s trial at the Old Bailey heard administrators had been unable to track down money in northern Cyprus.

    Philip Shears QC, prosecuting, said documents about the deposits said to have been made by his mother Safiye were fake.

    A map of the divided island in central Nicosia Nicosia in Cyprus – Lefkosa in Turkish – is the world’s last divided capital city

    Accountants who went to northern Cyprus were unable to speak to Mrs Nadir and had difficulty with the tycoon’s employees.

    “Administrators were met with obstruction, and inaccurate and inconsistent accounts and explanations,” said Mr Shears.

    Nadir has so far not replied to a series of questions from the BBC about his business dealings in Cyprus.

    He denied 13 sample counts of theft but was convicted of 10 after a seven-month trial and was jailed for 10 years on Thursday.

    Mr Apostolides says: “This was not just considered appalling by Greek Cypriots but also it was unfair to Turkish Cypriots because this was someone coming from outside who was given the chance to exploit the whole country.”

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  • The spectacular rise and fall of Asil Nadir

    The spectacular rise and fall of Asil Nadir

    Asil Nadir turned Polly Peck into a shareholders dream, until the company collapsed amid accusations of fraud

     

    Jason Rodrigues

    guardian.co.uk, Wednesday 22 August 2012 14.01 BST

    Asil Nadir director of Po 008

    Asil Nadir, director of Polly Peck.

    Asil Nadir, director of Polly Peck, during the company’s heyday. Photograph: Tony Mcgrath/Picture library

    Though not entirely a rags to riches story, a young Asil Nadir once sold newspapers on the streets of Northern Cyprus before moving to Istanbul to study economics at university. During his college days, he supported himself by performing with his band, The Asils.

    On graduating in 1963, Nadir moved to London’s east end, a journey his family had already made from Cyprus. Before long, Asil made his mark in the rag trade as chairman of garment firm Wearwell, before turning the loss-making ladies fashion group Polly Peck into a business empire.

    Polly Peck sold Published in the Guardian on 14 February 1980, click on image for full story

    He added packaging, electronics and fresh produce companies to the Polly Peck conglomerate, which later became listed as a FTSE 100 company.

    Polly Peck’s rapid growth saw its value rise to £2 billion, making City traders fall in love with it during the boom times of the 1980s, some in the Square Mile calling it “wonder stock”. By 1990, Nadir was in the Sunday Times rich list, and a generous donor to Margaret Thatcher’s Conservative government.

    Polly Peck shares Published in the Guardian on 25 October 1990, click on image for full story

    Then in August 1990, in a move that baffled the city, Nadir tried to buy up Polly Peck shares from investors, only to retreat from this position days later. It was too late: Nadir had spooked the market and Polly Peck’s shares plunged. The value of Nadir’s personal holding was rumoured to have dropped by more than £160m.

    Worse was to come, when trading in Polly Peck was suspended and Nadir was quizzed by the Serious Fraud Office. When Polly Peck was forced into liquidation in October 1990, its creditors were owed £1.3bn.

    PP fraud Published in the Guardian on 21 September 1990, click on image for full story

    Nadir, who has always denied the 66 charges of false accounting and theft made against him, was alleged to have secretly transferred £34m out of the company, leading to its collapse.

    In 1993, just days before he was due to face charges, Nadir was driven to an airfield near London, boarded a waiting business jet and fled to his native Northern Cyprus – which has no extradition treaty with Britain.

    In 2010, having evaded the British courts for nearly 20 years, Nadir flew back to the UK, and declared himself delighted at the prospect of finally standing trial and “clearing his name”.

    At his trial at the Old Bailey in 2012, Asil Nadir was found guilty of 10 charges involving the theft of millions of pounds from his Polly Peck empire.

    The jury found him not guilty on three counts – all similar theft offences.

     

    via The spectacular rise and fall of Asil Nadir | From the Guardian | guardian.co.uk.

  • Ex-Polly Peck CEO Nadir Accused of $233 Million U.K. Theft

    Ex-Polly Peck CEO Nadir Accused of $233 Million U.K. Theft

    By Erik Larson

    (Updates with salary and cars in eighth paragraph.)

    Jan. 23 (Bloomberg) — Asil Nadir, the former Polly Peck International Plc chief executive who fled Britain in 1993 following claims of fraud, was accused at a trial in London of stealing 150 million pounds ($233.4 million) from the company.

    The amount, revealed by prosecutors on the first day of a four-month trial in London, is more than four times the figure cited by the Serious Fraud Office since the case began nearly two decades ago. Nadir, 70, and associates withdrew the money from the now-defunct electronics and food-packaging firm’s U.K. bank accounts and funneled it through companies in Switzerland and the Bahamas between 1987 and 1990, prosecutors said.

    Nadir “wielded very considerable power” over the company’s operations and management, prosecutor Philip Shears said at London’s Old Bailey criminal court. “We say he abused that power and helped himself to tens of millions of pounds of PPI’s money.”

    When London-based Polly Peck collapsed in 1990, its administrators found more than 700 million pounds owed to creditors was unrecoverable from units of the company, which Nadir built up during the 1980s by expanding into areas such as electronics, hotels and an acquisition of the Del Monte fruit brand. Nadir agreed to return to the U.K. in 2010 to face fraud claims nearly 20 years after fleeing.

    The SFO accused Nadir of 13 counts of theft totaling about 34 million pounds, using a selection of “sample” transfers. Nadir denies the charges and his lawyers will present his case later in the trial.

    Secret Share Purchases

    Prosecutors said Nadir stole from the company’s accounts at National Westminster Bank Plc and Midland Bank Plc through at least 70 transfers, and that the money was used to secretly buy shares in Polly Peck and other companies. He also allegedly used the money to repay loans, make payments to Nadir family trusts and pay companies controlled by himself and his mother.

    Nadir acquired a controlling interest in Polly Peck in 1980, when the company — then about 20 years old — was limited to the garment industry in East London, prosecutors say. He expanded the firm to include more than 200 subsidiaries in food, electronics, textiles and leisure, with offices in Lefkosia, Cyprus, New York, Istanbul and Hong Kong, the SFO said.

    SFO prosecutors told jurors that Polly Peck increased Nadir’s salary in 1990 to 350,000 pounds from 200,000 and gave him use of a corporate airplane and five cars, including a Bentley and a Ferrari.

    ‘Thwarted’ Dual Signatures

    The theft succeeded as a result of weak financial oversight at the company, a weakness ensured by Nadir’s own rules, prosecutors said. The SFO claims Nadir insisted that one board member’s signature was enough to move the company’s money and “thwarted” attempts by Polly Peck’s board to adopt a dual signature process.

    Nadir repeatedly told the board he needed sole control over the money to operate effectively in Turkey and Cyprus, where last-minute decisions would need to be made, and walked out of a board meeting when the conversation turned to dual signatures, the SFO said.

    He also fired a controller who tried to institute “a comprehensive system of financial controls,” prosecutors said. The manual that the employee helped create was later implemented in all of the company’s subsidiaries except for Turkey and Northern Cyprus.

    Under Nadir’s leadership, Polly Peck loaned hundreds of millions of pounds to its subsidiaries in Turkey and Cyprus in the years before the company’s collapse. Nadir later said the money was for a capital expenditure program and advance payments to citrus growers to benefit the company, according to the SFO.

    ‘Black Hole’

    “When PPI was in difficulty leading up to its going into administration, it proved impossible for PPI to get the cash back to the U.K., save for a very small amount,” Shears said. “When the administrators went to Northern Cyprus they effectively found no cash at all — just a black hole.”

    Nadir claimed to own 25 percent of Polly Peck in 1985 and four years later — after increasing his holdings by more than 151 million pounds — he resisted an attempt by the board of directors to probe the ownership structure of his shares, prosecutors said.

    Nadir returned to London from Turkish-controlled Northern Cyprus in August 2010 to face trial, a month after a U.K. judge said that if Nadir did so he would be granted bail. He agreed to be fitted with an electronic security tag and to remain in the capital. The former executive was also ordered to comply with a curfew and check-in weekly at a police station.

    While his lawyers had sought to have the trial earlier, a judge said it was unrealistic for the prosecution to be expected to re-compile a 17-year-old case on short notice. His lawyers later complained a senior U.K. prosecutor leaked information to the press. The SFO has denied that claim.

    –Editors: Christopher Scinta, Peter Chapman

    via Ex-Polly Peck CEO Nadir Accused of $233 Million U.K. Theft – Businessweek.