Welcome to our

presentation

Assignment on Maxwell
Submitted to

Shaikh Masrick Hasan

Assistant professor
Department of Finance
Jagannath University

Submitted by
Name

ID

Md. Toaha

M150203705

Md.Maruf Alam

M150203711

Nargis Akter

M150203721

Niad mahmud
talukder

M1502037

Limon

M1502037

arif

M1502037

About Maxwell
Ian Robert Maxwell, MC (born

Jn Ludvk Hyman Binyamin

Hoch; 10 June 1923 5
November 1991) was a British
media proprietor and Member of
Parliament (MP). Originally from
Czechoslovakia, he rose from
poverty to build an extensive
publishing empire.
Early in his life Maxwell escaped

from Nazi occupation, joined the

Czechoslovak Army in exile in
the Second World War and was
decorated after active service in

About Maxwell continues

After the defeat in France and the retreat to Great Britain,

Maxwell (using the name "Ivan du Maurier) took part in the

protest against the leadership of the Czechoslovak Army,
and with 500 other soldiers, he was transferred to the British
Pioneer Corps, and later to the North Staffordshire
Regiment in 1943.
He was then involved in action across Europe, from the

Normandy beaches to Berlin, and achieved the rank of

sergeant. He gained a commission in 1945, and was
promoted captain. In January 1945, he received the Military
Cross from Field Marshal Montgomery. Attached to the
British Foreign Office, he served in Berlin during the next two
years in the press section

About Maxwell continues

In 1964, representing the Labour Party, he was elected

as Member of Parliament (MP) for Buckingham, and reelected in 1966

In subsequent years he worked in publishing, building up

Pergamon Press to a major publishing house. After six

years as an MP during the 1960s, he again put all his
energy into business, successively buying the British
Printing Corporation, Mirror Group Newspapers
and Macmillan, Inc, among other publishing companies.

Maxwell had a flamboyant lifestyle, living in

Headington Hill Hall in Oxford from which he often flew

in his helicopter, and sailing in his luxury yacht, the Lady
Ghislaine.

Pergamon lost and

regained
Pergamon Press was an Oxford-based publishing house,

founded by Paul Rosbaud and Robert Maxwell, which

published scientific and medical books and journals.

In 1969 Saul Steinberg, head of "Leasco Data Processing

Corporation", was interested in a strategic acquisition of

Pergamon. Steinberg claimed that during negotiations Maxwell
had falsely stated that a subsidiary responsible for publishing
encyclopedias was extremely profitable.

At the same time, Pergamon had been forced to reduce its

profit forecasts for 1969 from 212 million to 2.05 million

during the period of negotiations, and dealing in Pergamon
shares was suspended on the London stock markets.

This caused Maxwell to lose control of Pergamon, and he was

expelled from the board in October 1969, along with three

other directors in sympathy with him, by the majority owners
of the company's shares. Steinberg purchased Pergamon.

Pergamon lost and regained

continues
At

the same time, the U.S. Congress was

investigating Leasco's takeover practices. Justice
Forbes in September 1971 was critical of the inquiry:
"They had moved from an inquisitorial role to
accusatory one and virtually committed the
business murder of Mr. Maxwell." He further
continued that the trial judge would probably find
that the "inspectors had acted contrary to the rules
of national justice." The company performed poorly
under Steinberg. Maxwell reacquired Pergamon in
1974 after borrowing funds.

Maxwell established the Maxwell Foundation in

Liechtenstein in 1970. He acquired the British

Printing Corporation (BPC) in 1981, and changed
its
name
to
the
British
Printing
and
Communication Corporation (BPCC) and then to

Later business activities

In July 1984, Maxwell acquired Mirror Group Newspapers

from Reed International plc. for 113 million. MGN, now

part of Trinity Mirror, published the Daily Mirror, a proLabor Party tabloid. IT was a popular newspapers in England
and Scotland..

In June 1985, Maxwell announced a takeover of Sir Clive

Sinclair's ailing home computer company, Sinclair

Research, through Hollis Brothers, a Pergamon Press
subsidiary. The deal was aborted in August 1985.

In 1987 Maxwell purchased part of IPC Media to create

Fleetway Publications. That same year he launched the

London Daily News in February, after a delay caused by
production problems, but the paper closed in July after
sustaining significant losses contemporary estimates put at
25 million.

Later business activities

continues
By 1988, Maxwell's various companies owned,
Mirror titles
Pergamon Press
Nimbus Records,
Macmillan, Inc ,
Maxwell Directories,
Prentice Hall Information Services,
Berlitz language schools.
He also owned a half-share of MTV in Europe and other European

television interests, Maxwell Cable TV and Maxwell

Entertainment.

Maxwell had purchased Macmillan, Inc, the American publishing

firm, during 1988 for $2.6 billion. In the same year he launched an
ambitious new project, a transnational newspaper called The
European.

Later business activities continues

In 1991, he was forced to sell Pergamon Press and

Maxwell Directories to Elsevier for 440 million

to cover his debts, he used some of this money to
buy an ailing tabloid, the New York Daily News.
Also in 1991, Maxwell sold 49% of the stock of
Mirror Group Newspapers to the public.
Maxwell's links with Eastern European

totalitarian regimes resulted in several biographies

(generally considered to be hagiographies) of those
countries' then leaders, with interviews conducted
by Maxwell, for which he received much derision.

Death of Maxwell and Financial

Instability
It emerged that, without adequate prior authorization, Maxwell had used

hundreds of millions of pounds from his companies' pension funds to shore

up the shares of the Mirror Group, to save his companies from bankruptcy.

On 5 November 1991, he was last in contact with the crew of the Lady

Ghislaine, his yacht, at 4:25a.m. local time, but was found to be missing
later in the morning. Maxwell was presumed to have fallen overboard from
the vessel which was cruising off the Canary Islands, and his naked body
was subsequently recovered from the Atlantic Ocean.

Maxwell's death triggered a flood of instability with banks frantically calling

in their massive loans. His two sons Kevin and Ian struggled to hold the
empire together, but were unable to prevent its collapse.

Eventually, the pension funds were replenished with monies from investment

banks Shearson Lehman and Goldman Sachs, as well as the British

government.

Continues.
This

replenishment was limited and also

supported by a surplus in the printers' fund which
was taken by the government in part payment of
100m required to support the workers' State
Pensions. The rest of the 100m was waived.
Maxwell's theft of pension funds was, therefore,
partly repaid from public funds. The result was
that, in general, pensioners received about 50% of
their company pension entitlement

The

Maxwell companies filed for bankruptcy

protection in 1992. Kevin Maxwell was declared
bankrupt with debts of 400 million. In 1995,
Kevin and Ian Maxwell, and two other former
directors, went on trial for conspiracy to defraud,
but were unanimously acquitted by a twelve-man

Lessons and recommendations

The following are patterns of fraud and lessons we learned
from the report ,
1. Organizational Structure: Whenever complex
structures are employed, fiduciaries must maintain detailed
diagrams with ownership and legal relationships clearly
spelled out.
Maxwell formed hundreds of companies, many with almost
identical names, to confuse bankers and auditors
2. Duties of directors: Where foreign structures are used,

the directors of lower tier companies must be reportable and

accountable to the board at the top.
Maxwell moved money with the skill of a blackjack dealer.
Foreign companies were used because ownership and
transactions could be kept confidential. In one instance,
Maxwell funneled hundreds of millions of dollars through a
foreign subsidiary without the knowledge of the parent
company. There was no reporting or communication between

Lessons and recommendations Continues

3. Duties of Trustee Board: Trustees need to do their own
due diligence beyond that of regulatory agencies. They also
need to meet and engage in a with direct dialogue the
auditors to insure competency and thoroughness.
The financial community took too much comfort in the fact

that Maxwells listed companies and pension funds were

audited and regulated.

4. Fees of auditors : Professional firms generally want to

maximize fees by selling integrated financial services to
large clients. The inevitable conflict of interest arises in
direct relation to the scale of fees involved. Diversification
with professionals provides a safety net just as it does with
asset management.
Maxwell hired the same audit firm and had the same

partner oversee all the audits of his listed companies, his

private companies and their pension plans. Fees to
solicitors were significant and transactions were rubber

Lessons and recommendations Continues

5. Review : Trustees and audit committees need
to conduct their own reviews from time to time.
Financial audits are not intended or geared to
detect fraud, especially when several people
are part of a conspiracy. A good tactic is to
review the cash and financial activity the month
before the close of the fiscal year.
Financial statement limitations: pension plan
administrators were deceived in part because
financial statement balances at year end did
not often reflect the true activity. Maxwell would
withdraw funds and replenish them at the end
of the year, only to borrow them back out again
after year end. Massive funds were moved in
and out of companies with offsetting
receivables and payables that were netted to
avoid detection

Lessons and recommendations

Continues
6. Sound Processes and Governance:

Organizations (trust companies, banks,

accounting and law firms) must have sound
processes and governance in place that ensure
the integrity of their reviews and that the
concerns of subordinates are properly
investigated
Professionals are often confronted by strong
personalities. Maxwell was abusive with anyone
that questioned his authority. To get his way, he
would bring the matter to a senior partner or
board member and threaten to take his business
elsewhere. The gross oversights in
professionalism were made by the senior level
executives and partners, not by the juniors.

Conclusions

How could one person commit such a vast fraud? It was

mostly due to Maxwells bravado and absolute control.
Another important ingredient was the failure of professionals
to do their job. They put money ahead of ethics and the
public trust. Where trustees are in positions of substantial
responsibility, they need to:
Retain a healthy skepticism towards professionals and their
inherent conflicts of interest
Diversify, rather than consolidate, financial advisors on
large accounts
Establish good governance and exercise discipline with
following established procedures;
Take appropriate action whenever ones instincts start
sending signals
In 1992 England government made 12 members committee
making Adrian Cadburry chairman to find out the all
fraudulent activities,of mexwell as well as other companies

Thank You