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
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