Trying To Find Nadir’s Money

Earlier this month former business tycoon Asil Nadir was jailed for 10 years for stealing £29m, worth nearly £62m in today’s money, from Polly Peck International (PPI), after a trial that lasted seven months but was effectively instigated more than 20 years ago.

Nadir was found guilty of stealing from PPI between August 1987 and August 1990, when the company collapsed after a Serious Fraud Office (SFO) investigation. He was bailed before the first trial but fled the country in 1993 and went home to Northern Cyprus, which has no extradition treaty with the UK. He returned in 2010 of his own volition.

In 1989 Polly Peck was investigated by the Accountants’ Joint Disciplinary, which concluded that: “Mr Nadir was able to initiate transfers of funds out of (Polly Peck’s) London bank accounts without question of challenge. Further… he was able to conceal his actions until such time as the cumulative cash outflow became so great that the group was unable to meet its obligations to its bankers.”

And during the search for the tycoon’s money during the intervening twenty years, the role of the forensic accountant was key but also quite dangerous. There was an accountant shot in Istanbul, allegedly in connection with the case, and stories abounded at the time of personal attacks, fire bombings, headless chickens being left in offices and pet cats being killed.

Milsted Langdon’s head of forensic accounting, Roger Isaacs, admitted that his team may not have earned a reputation for heroism in the face of physical assaults but when it came to asset tracing, he and his colleagues have a string of successful cases under their belts.

“The difficulty with the Nadir case”, he said “would have been that the basis of Nadir’s defence was that money was transferred by means of suitcases of Turkish lira were taken from his mother’s home in Cyprus. Such cash transactions are difficult to evidence. Indeed the prosecution found Nadir’s explanations implausible, not least because Nadir would have needed banknotes 300 times the height of Nelson’s Column to balance the books of his empire!”

While in Cyprus, Nadir commissioned reports by two firms of accountants, who concluded that the allegedly illegal transfers from Polly Peck in London to subsidiaries in northern Cyprus were not, and that the money involved was accounted for. He still insists that he is innocent.

After the trial, the prosecution said that it will be seeking to recover some of the money from Nadir, but would not be issuing a confiscation order. Instead, he will have to declare his financial situation to the court next month and may have to pay a compensation order to include interest for those who lost out when PPI went bust.

As an accountant; Roger Isaacs specialises within business turnaround and business valuation.

Posted in Blog, The Forensic Blog.