Ex-Morgan Grenfell man 'made £2m for himself'
By Nikki Tait, Law Courts Correspondent
Published: June 5 2003 5:00 | Last Updated: June 5 2003 5:00
Peter Young, the former Morgan Grenfell Asset Management fund manager, made a personal profit of more than £2m by devising and then implementing a complex warrant-based transaction built around the bonds of a Scandinavian company called Sensonor, a jury at the Old Bailey was told yesterday.
The former fund manager has been charged with concealing material facts about the deal, which took place between 1994 and 1996, from trustees of the large European Growth unit trust which he was running, and whose money was also invested in the warrants.
"Peter Young undoubtably gave himself the opportunity to manipulate the bond structure to his advantage," said Stephen Climie, representing the Serious Fraud Office. "At no stage did the fund's trustees realise that Mr Young had control over the transaction." He told the jury: "Even if you conclude that the trustees were negligent. . . the fact, we say, is that Peter Young concealed material facts."
The case is unusual because Mr Young has been found unfit to stand trial. Accordingly, the proceedings which opened at the Central Criminal Court yesterday cannot lead to a conviction - and the jury is being asked to decide only whether he carried out the acts alleged.
If the prosecution fails to establish this, Mr Young could still be acquitted.
The jury was told that, while Mr Young had been an intelligent, well-remunerated fund manager in the mid-1990s, he had since been diagnosed with schizophrenia, and suffered from a gender identity problem as well as hallucinations. There was a "real risk" that the stress of a trial could lead to suicide, said Mr Climie.
Outlining the alleged scam, Mr Climie said this had involved a Swedish financial services firm issuing warrants convertible into the Sensonor bonds. Those warrants held to maturity would share in extra "bonus" bonds on conversion.
The unit trust, under Mr Young's management, bought all but one of the warrants, he claimed. The remaining warrant was purchased by P. Van Doren - supposedly Mr Young's brother-in-law - but actually held under the control of Mr Young's Jersey account.
In due course, it is claimed, the unit trust's warrants were sold on to two Luxembourg companies that Mr Young had created, and then converted in the bonds about a month before maturity. This meant that all the bonus bonds accrued to Mr Young's remaining warrant - turning an £8,000 investment into more than £2m.
The prosecution alleges that some of these proceeds were then used to buy a house in the UK.
The case continues. |
