MAXWEL AFFAIRS

MAXWELL AFFAIRS

Robert Maxwell ran a vast publishing empire, which included the Mirror Group of newspapers and various other newspapers and media companies. Maxwell was a very dominant person.

Maxwell’s group of companies had significant debts and there were many rumours about the level of debts and his dishonesty in business. As early as 1971, the Department of Trade and Industry reported that he could not be relied upon to exercise proper stewardship of a public company as he had tried to mislead an investor wishing to takeover one of his companies.

Maxwell borrowed millions of pounds from the Mirror Group pension scheme to help shore up some of the other businesses that were in trouble. This was illegal. By 1991, there was increasing public suspicion of the treatment of the pension scheme funds as the company had not met its statutory reporting requirements.

After his death IN 1991, it became apparent that he had used hundreds of millions of pounds from the pension funds to finance corporate debts. Thousands of employees lost their pensions.

Many questions were asked after this scandal; the primary question being how this money could have been taken out of the pension scheme. Why would the pensions fund trustees, who were responsible for running the pension scheme, not question this? It could be that they allowed it to happen, as Maxwell was so dominant. Additionally, perhaps the auditors should have picked this up as an issue or the other board members should have challenged Maxwell.

Yet again, one person was allowed to do what they wanted as they were in total control. This highlighted the problem of a single dominant individual at the head of a company.