MPs accuse Mirror of neglecting pensioners: Select Committee says top priority is to help scheme members, not use profit to expand

MIRROR Group Newspapers treated 10,000 pensioners in a shameful way after the late Robert Maxwell pillaged his companies' pension funds, the all-party Social Security Select Committee said yesterday.

The MPs said MGN should use its higher-than-expected profits to help these pensioners rather than to expand its media empire by buying into the Independent and Independent on Sunday newspapers.

'At a time when MGN believes itself to be so financially solvent that it can attempt to take over another newspaper, I would have thought most people in the country would have thought their (MGN's) first priority was to meet their responsibilities to pensioners rather than extend their global empire,' Frank Field, the committee's chairman, said after publication of the report, which had been agreed by all the MPs.

On Tuesday MGN announced pre-tax profits of pounds 131.9m, including pounds 60.8m of provisions released because money was recovered to make up some of the pounds 450m missing from Maxwell pension funds.

The committee said MGN should allow those who paid money into two Maxwell pension funds - the BIHL scheme and the Works Scheme - to enter Mirror funds set up since the tycoon's mysterious death at sea in 1991.

MGN has so far refused to do this even though it had 'unilaterally' wound up the Works Scheme, the committee said.

'All this seemed to us to have provided the potential for a serious conflict of interest,' it said.

'Here was a situation where MGN as the principal employer of the Works Scheme and with undue representation on the trustees board, had unilaterally wound up that scheme without reference to the trustees board.'

The committee, which has played a key role in investigations of Maxwell's illegal activities in the months before his death, also attacked the lawyers, banks and accountants involved in clawing back funds.

It was 'entirely typical of the Maxwell case' that creditor banks received money - after the sale of 54 per cent of MGN by the administrator of the Maxwell empire's private companies - while pensioners were still waiting.

The MPs estimated that lawyers and accountants had earned combined fees of more than pounds 75m. David Shaw, a committee member, said up to pounds 150m had so far been won in out-of-court settlements.