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Fired Guinness Brewing Chief Arrested : Faces Charges Relating to Britain's Largest Takeover Fight

May 07, 1987|From Reuters

LONDON — Ernest Saunders, dismissed as chairman of the Anglo-Irish brewing giant Guinness, was arrested and charged with financial offenses during Britain's biggest takeover battle, police said today.

In the latest twist of Britain's worst financial scandal in years, fraud squad officers arrested the 51-year-old businessman at his lawyer's office in the heart of London's financial district Wednesday night and charged him with attempting to pervert the course of justice and destroying documents.

He was held in a police cell overnight and taken to court today for a hearing.

Guinness directors dismissed Saunders in January, saying they had uncovered irregularities in his conduct of last year's successful $4.5-billion Guinness takeover of the Scottish whisky makers Distillers Co.

Police also said fraud squad officers were probing Guinness' affairs but gave no further details. The government has been investigating the Distillers' takeover since December.

Guinness has said it is involved in negotiations to recover under-the-table payments worth $42 million which it says were made by Saunders and his associates to sweeten the Guinness bid for Distillers.

Saunders, who has refused to resign as a director of Guinness despite being dismissed as chairman, has always denied the allegations.

Guinness announced in April that it had extraordinary charges last year stemming from the scandal and from its investment in a fund run by Wall Street arbitrager Ivan Boesky.

Guinness revealed in December that it had invested $100 million in Boesky's fund.

Boesky, who speculated in Guinness and Distillers stock during the takeover bid, has paid a $100-million penalty in the United States and has pleaded guilty to a charge he violated federal securities laws.

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