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All the world loves a winner.

FOR MOST OF THE 1980s TURKISH CYPRIOT Asil Nadir was the golden boy of British business. It seemed he could do no wrong. His face was constantly in the news, associated with all the right people and at all the right places. And, most important of all, the company of which he was chairman, Polly Peck International, was consistently the best performing firm on the British stock exchange.

The new decade, however, saw a turnabout in Nadir's fortunes and Polly Peck eventually went bust in October 1990 owing |pounds~1.3m. Polly Peck administrators issued writs in October 1991 claiming |pound~1bn damages against a series of defendants over money that had disappeared. Documents prepared for the creditors by lawyers and accountants revealed large scale share swindles running into millions of pounds and, from all the available evidence, it now looks as if Nadir might have been personally responsible for the disappearance of considerable amounts of money, shifted through a series of offshore banks and trust companies.

Faced with charges of stealing |pounds~30m from Polly Peck, Nadir jumped bail of |pounds~3.5m and escaped to Northern Cyprus at the beginning of May, claiming he would not get a fair trial in an English court. Since his departure details of his connections with the ruling Conservative party, including personal friendships with members of parliament and "donations" to party funds, which could amount to over |pounds~1m, have emerged in the British press, much to the embarrassment of the ruling Tory party, at pains to play down the closeness of the relationship, especially as even more damning evidence indicates Nadir's donations were made with money accumulated from the sale of undercover arms deals, primarily with Iran and Iraq.

When the Iran-Iraq conflict began in 1980, a small British quoted company Polly Peck, run by the then virtually unknown Asil Nadir, suddenly announced a profits forecast for 1981 of |pounds~4m, up from |pound~1m in 1980. This dramatic rise in profits was to coincide with a fruit packaging operation the company was about to bring onstream in Northern Cyprus. Previously, the lack of suitable packaging facilities had prevented the efficient export of locally growth fruit but with the construction, by Polly Peck, of a cardboard box and packaging factory, all this was set to change, investors were told.

The fruit packaging business was, according to informed financial sources, one of the greatest facades of all time. It was successful in its own right but as long ago as 1981 articles in the press were questioning why brokers L. Messel were forecasting profits of |pounds~10m for 1982 and |pounds~20m for 1984, when, even working flat out, the factory could not produce profits much in excess of |pounds~4m.

Recent disclosures allege Polly Peck's profits were amassed not by packaging fruit but by selling American and Turkish made weapons to Iran and Iraq during their nine year war with each other. One British journalist, Kevin Cahill, writing in the monthly Business Age magazine, claims Nadir was acting as an agent for the government of Turgut Ozal, which, he alleges, made billions of pounds on the sale of arms.

Not all of Nadir's activities with defence manufacturers were covert. In 1983 he had signed deals with Racal and Thorn EMI, both leading communications system suppliers who dealt with Iraq. Although the exact nature of Polly Peck's dealings with the two were never specified. But it was in 1989 when the Iran-Iraq war abated that Nadir found himself in serious trouble. And, try as he might, he was unable to plug the hole left as his arms deals dried up.

When business was booming Asil Nadir attempted to consolidate his position with people in power. He was the major source of funds for Ozal's Motherland party in the elections following the end of military rule in Turkey, which brought Turgut Ozal to power, first as prime minister and later as president. Nadir was also the single most important source of funds for Rauf Denktash, the leader of the Republic of Northern Cyprus. And last month the former Conservative party Treasurer, Lord McAlpine, virtually admitted in a Sunday newspaper column that a |pounds~1.5m "donation" to the party by Nadir was regarded, by the donor, if by nobody else, as a bribe.

Despite his connections Asil Nadir was unable to weather the storm when it broke. The sudden death of Turgut Ozal left him unprotected in Turkey. As more details of the frauds and deceptions leaked out, his friends in the British government were unable to help and so he fled to the sanctuary of Northern Cyprus where, for the moment at least, he enjoys the protection of the self-styled government of Rauf Denktash.

There will almost certainly be additional revelations about the Polly Peck affair. In Britain, where a number of government ministers caused considerable concern at the offices of the Serious Fraud Squad with their behind the scenes activity on Nadir's behalf, there will be many more questions raised in the House of Commons. It is said that Nadir hoped his donations to the Conservative party would secure him a knighthood. We can now only speculate how close he came to receiving one.

The Polly Peck affair has called into question the whole issue of political party funding in Britain. The Chairman of the Conservative Party, Sir Norman Fowler, has recently been questioned about donations to the party from Saudi Arabia, Kuwait and Brunei, all of which enjoyed a close relationship with Margaret Thatcher.

Asil Nadir has been roundly condemned as the villain of the piece but continues to protest his innocence. He is right that he would not now get a fair trial in Britain. However, it is worth remembering that he has not yet been convicted of any crime and that much of what he undertook was with the knowledge and often the approval of the British government.
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Title Annotation:the collapse of Asil Nadir's fortune
Publication:The Middle East
Date:Jul 1, 1993
Previous Article:Chemical warfare.
Next Article:Iraq: a country set adrift.

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