Kevin 'sought big investor to bail out group'

The Maxwell Trial: Day 33

JOHN WILLCOCK

Financial Correspondent

Kevin Maxwell believed his dead father's empire would be saved by a "serious and prominent white knight" from Israel with pounds 400m to invest, it was claimed yesterday.

The mysterious investor was said to be "absolutely capable'' of mounting the package in December 1991.

The Old Bailey heard that in the weeks after tycoon Robert Maxwell's death in November 1991, Kevin had desperately tried to raise finance in Israel to save the family empire.

Maxwell's Tel Aviv-based lawyer Yaacov Neeman said he had tried to help Kevin and brother Ian in their bid to keep the group going.

He said he did not know the identity of the white knight but had liaised between the brothers and David Kimche, a businessman and former director of Israel's foreign ministry. Kimche, he said, represented the investor.

Fax messages flew between London and the Middle East as they tried to complete the deal on 2 December that year. Failure to meet the deadline led to the ousting of the brothers and the empire's collapse, the court heard.

But Mr Neeman said he had been able to reassure Kevin of the rescuer's good intentions.

He said he faxed: "We are of the opinion he is very serious and absolutely capable of making this size of investment."

Mr Neeman told the court how Kevin had also approached Yitak Modai, Israel's then minister of finance, for government help. He said specifics were not discussed at the meeting but Kevin was trying to get Modai's help in saving the group.

Days later, a further meeting was held between the minister, Ian and the solicitor. Mr Neeman said they were all left with the impression Modai was willing to help.

The court heard how Robert Maxwell had become Israel's largest foreign investor and how his interest in the country was "most welcome". Maxwell received a string of offers to join new enterprises, but he turned most down, saying they were not in his line.

Alun Jones QC, defending Kevin, said his client would be entitled to conclude that his father had made a great number of influential and valuable friends in Israel to whom he could look for assistance.

Mr Neeman replied: "Kevin said at the time he was looking for such assistance."

It is alleged that assets belonging to Maxwell pension funds were fraudulently used to prop up the ailing empire.

Kevin denies conspiring with his father to defraud using pounds 5.4m shares in Scitex Corporation in 1991. Kevin, Ian and two of Maxwell's former directors, Larry Trachtenberg and Robert Bunn, all deny conspiracy to defraud using 25m shares in Teva Pharmaceuticals.

Both companies were based in Israel.

The trial was adjourned to tomorrow.