Famously dubbed "Cap'n Bob", or "The Bouncing Czech", by Private Eye, Robert Maxwell robbed the Mirror pension fund to prop up his ailing businesses.
When it comes to humble beginnings, there are few humbler than that of Robert Maxwell. Born into extreme poverty in 1923 as Jan Ludvik Hoch, in the Carpathian Mountains of Czechoslovakia, Maxwell liked to claim he didn't get his first pair of shoes until he was seven.
His orthodox Jewish parents fell victim to the Nazis, and young Jan Ludvig himself barely escaped with his life to Britain in 1940. Joining the army, he made an early impression and was decorated for bravery. After the war, located in Berlin, Maxwell set up Pergamon Press with the intention of publishing scientific journals. His touch seemed golden, and Pergamon quickly started raking in the profits.
Politician
As a rare openly socialist businessman, Maxwell was drawn to the Labour party and successfully fought for the Buckingham seat at the 1964 election, which he held until he was defeated in 1970.
The early signs of Maxwell's less than perfect honesty were there to be seen in 1969 when he was censured by the High Court after a failed attempt to sell Pergamon. A few years later, in 1973, his attempt to buy the News of the World was thwarted after a report by the Dept of Trade & Industry described him as "not a person who can be relied on to exercise proper stewardship of a publicly quoted company". The News of the World fell to Rupert Murdoch -- a result that Maxwell found hard to swallow.
The Mirror
But Maxwell's ambition to make it as a newspaper publisher was not to be stymied for long. In 1980 he succeeded in the acquisition of the British Printing Corporation, which was renamed Maxwell Communications Corporation. And in 1984 came his takeover of Mirror Group Newspapers, which he ruled with an iron fist until his death.
By 1990, suspicions were beginning to emerge that Maxwell's companies and pension funds were failing to meet their statutory reporting requirements, and a number of complaints about alleged abuse of pension funds were made, in both the UK and the US.
Big splash
A man who had clearly made a big splash in life, Maxwell very likely made a big splash in death too, though there was nobody around to see or hear it. On 5 November 1991, he went overboard from his yacht, The Lady Ghislaine, off the Canary Islands, his body being found a short time later. An official verdict of accidental drowning was recorded, but with his fraudulent dealings about to become unraveled, there are surely few today who think it was anything other than suicide.
With his terrifying presence gone, it soon became clear that Maxwell had been diverting hundreds of millions of pounds from company pension funds to finance his private company debts, takeovers, and lifestyle. The Maxwell companies filed for bankruptcy in 1992, and his sons, Kevin and Ian, were declared bankrupt with debts of £400m. Both were charged with fraud, along with other directors, but they were acquitted in 1996 with the criminal blame being primarily attributed to the boss.
How did he do it?
Part of Maxwell's success was due to his bullying nature (which was supported by his physical stature -- he was 6ft 3in and weighed 22 stone). He was a demagogue who brooked no questions, let alone criticism. Within his organizations he had been a frightening man to cross, and outside he was infamous for his readiness to reach for his libel lawyers -- something that Private Eye discovered to its cost.
But the real nature of his success lay in his ability to manipulate his companies (both his publicly-quoted ones, like Mirror Group Newspapers, and his own private ones) and the management thereof, and to obfuscate his dealings through a web of secrecy and deception. The Maxwell companies all had different year-end dates, continually lent and borrowed money from each other, and regularly transferred assets amongst each other.
He made sure he was the only one who could sign cheques for anything other than trivial amounts, and tried to avoid meetings like the plague. With ones he couldn't avoid, like the mandated board meetings that public companies are obliged to hold, Maxwell would typically re-arrange them at short notice, ensuring that few directors could attend. And he would rush through them like a whirlwind, only distributing the minimum amount of paperwork at the last moment and clawing it back immediately afterwards.
As the only one with the keys to the company safes, and with no effective limitations to what he could do, Maxwell had been systematically plundering the coffers of his pubic companies, and, infamously, the Mirror Group pension fund without let or hindrance for years.
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