WHAT THE MEDIA SAY: Investigation into Maxwell accuses City

Organisation: Department of Trade and Industry (DTi)

Issue: Report into flotation of Maxwell newspapers/pension fraud

The Department of Trade and Industry's (DTi) investigation into the

flotation of Robert Maxwell's Mirror Group Newspapers and associated

pounds 4.5m pension fraud was published last week, nearly 10 years after

it was commissioned, and at a cost to the British taxpayer of almost

pounds 10m.

In addition to concluding that Maxwell was a 'bully and a domineering

personality' whose unethical dealings spanned his business enterprise,

the report issued strong criticism of City institutions and political

players who apparently failed to keep him in check.

Censure of the City was fierce given its failure to heed the warnings

contained in three previous DTi investigations into Maxwell's business


'Myopia in the City helped fraudster to operate,' headlined The Times

(31/3), while the Financial Times highlighted the roles of the 'Servants

of an unholy financial empire' (30/3).

The existence of the previous DTi reports removed the 'lack of hindsight

defence' from those institutions caught in the web of Maxwell's

corruption (accountancyage.com, 30/3) and left City institutions facing

the allegation that greed and a lack of integrity were the prime

motivators. 'Greed is the only plausible explanation for this appalling

display of City pusillanimity' (FT, 30/3).

However, the DTi itself did not escape unscathed, as the press lamented

not only the time and cost of bringing the Maxwell report to fruition,

but criticised the paucity of recommendations, which amounted to 'little

more than a few broad-brush principles on the conduct of business' (The

Guardian, 31/3). The Independent highlighted the fact that 'No one has

ever been punished for their role in the scandal' (31/3), a fact also

noted by the Daily Express, which said that 'most of those involved

escaped with little more than a slap on the wrist' (31/3).

Despite the DTi's conclusion that 'high ethical and professional

standards must always be put before commercial advantage', the report's

long list of implicated institutions and lack of prosecution against

alleged wrongdoing was, according to the Daily Mail, 'a devastating

indictment of British justice - and one which will irredeemably damage

London's reputation as a financial centre' (31/3).

Analysis and commentary by Echo Research. More information can be found

at: www.echoResearch.com.

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