Maxwell faces action by DTI

KEVIN MAXWELL is facing legal action by the the Department of Trade and Industry for his failure to co-operate with a report on the flotation of the Mirror Group in 1991.

Two DTI inspectors appointed six years ago to compile the report have written to him, demanding he attends the High Court on 26 October to sort out the matter. Mr Maxwell, son of the late media tycoon Robert Maxwell, has been in a stand-off with the inspectors for the past two years, since he was acquitted of fraud charges relating to his father's business empire.

He has refused to meet the inspectors unless the DTI agrees to pay for legal advisers to help him during the interview. Otherwise, he has said, he would comply with the inspectors only in return for a guarantee against any further action. If Mr Maxwell consistently refuses to co-operate with the inspectors he could be in contempt of court, which carries the ultimate sanction of a prison sentence.

Keith Oliver, a solicitor with Peters & Peters, who represented him during his trial two years ago, said yesterday that for Mr Maxwell to undergo questioning by the inspectors without legal advice would be "grossly unfair".

The inspectors, Justice John Thomas and Raymond Turner, a senior accountant, were appointed in 1992, a year after Robert Maxwell died and his empire began to unravel. The report is expected to focus on assurances investors were given that Mirror Group was "ring-fenced" from Robert Maxwell's other activities. When the Maxwell businesses collapsed in 1992, Mirror Group had to set aside pounds 156m for losses from its pension fund.

One reason the inquiry into the flotation has taken so long has been that the process was delayed while the Serious Fraud Office prosecuted Kevin and his brother, Ian, and Larry Trachtenberg, a financial adviser, for fraud. All the defendants were acquitted in January 1996 after an eight- month trial that cost the tax payer more than pounds 25m. Questions were raised when it was disclosed that the defendants had received legal aid worth about pounds 10m.

A DTI spokesman said yesterday that the delay publishing the report was one of the reasons the inspectors had taken this week's action against Kevin Maxwell. "They want to complete this report," said the spokesman.

Mr Oliver, who represented Mr Maxwell throughout the SFO investigation and trial, said yesterday: "I've been personally involved with him for the five years he was under investigation. For him to be required to assist the DTI Inspectors without adequate legal representation is grossly unfair. I am very concerned if he should be put in a position where he would be compelled to deal with this inspection without adequate legal advice - or indeed without any legal advice, especially bearing in mind (he has already stood trial)."

Since the trial Mr Maxwell has engaged in consultancy in media and communications and is based in London.

He works both in the UK and overseas, according to a friend of his.

A spokeswoman for the Serious Fraud Office confirmed that the agency has no continuing interest in Kevin Maxwell. "It's all completely finished here."