$660 million from Maxwell companies unaccounted for Collapsing empire is pulling sons down

December 10, 1991|By ASSSOCIATED PRESS

LONDON (AP) -- Trouble at Robert Maxwell's wrecked media empire deepened yesterday with word that bank lenders couldn't find more than half the $1.2 billion in missing money he had frantically shuffled before his death.

Mr. Maxwell's two sons, Kevin and Ian, also were hurled deeper into the confusing jumble of events with the disclosure that a court had seized their passports and impounded assets to assure their help in finding the missing money.

Mr. Maxwell, one of the world's most flamboyant publishers, apparently used the money to help mask the weakness of his far-flung web of indebted companies, which range from tabloid newspapers to scholastic publishers.

Kevin Maxwell, publisher of the Daily News in New York, appealed for the return of his passport so he could run that newspaper.

The Daily News, like other Maxwell holdings, now faces a bleak future.

Kevin Maxwell also said that he had put his house up for sale.

"We have a mortgage like everyone else," his wife, Pandora, told reporters.

The stunning turns of events since Robert Maxwell's mysterious death at sea last month has created one of the most scandalous uproars in Britain.

Mr. Maxwell was once regarded as a scrappy business hero but is now seen as a conniving scoundrel who purloined pensions and other funds.

The Maxwell story also has focused attention on Britain's notoriously lax accounting system, which allows corporations great leeway in how they report financial results.

Richard Stone, an accountant hired by Mr. Maxwell's banks, said yesterday that he had been unable to trace more than half the $1.2 billion Maxwell secretly siphoned from public and private companies before his death on Nov. 5.

Of the $540 million traced, up to $144 million was used to make up operating losses and meet interest payments within Mr. Maxwell's private holdings, including the Daily News and the European, Mr. Stone said.

"Clearly, the pressure must have been enormous upon him," Mr. Stone said in a telephone interview with the Associated Press.

The missing money may have been used to try to boost the share price of Maxwell Communication Corp. PLC, said Mr. Stone. He said falling share prices had begun the unraveling of Mr. Maxwell's web of businesses.

The Maxwell family's 51 percent stake in Mirror Group Newspapers is among assets now up for sale to cover debts.

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