LONDON - One chapter has closed in the Maxwell saga, only to have a new one open.
On Jan. 29, a British jury pronounced brothers Kevin and Ian Maxwell not guilty of misusing 122 million in shares belonging to Maxwell company pension funds in winning loans from National Westminster Bank. Larry Trachtenberg, a former adviser to the late Robert Maxwell, also was found not guilty.
But only a week later, the U.K.'s Serious Fraud Office announced it would pursue additional charges against Kevin Maxwell, formerly chief executive of Maxwell Communications Corp.; Mr. Trachtenberg; and two other former Maxwell company executives.
New charges will not be pursued against Ian Maxwell, formerly chief executive of Mirror Group Newspapers PLC.
The latest charges do not involve the Maxwell pension funds. Instead, they relate to shares of Berlitz International Inc. belonging to Macmillan Inc., the U.S.-based publisher that formerly was part of the Maxwell empire.
The U.K. government has alleged the shares were pledged fraudulently to Credit Suisse, Bayerische Vereinsbank AG and Swiss Volksbank as collateral for loans totaling 110 million made to the Mirror Group (later known as Robert Maxwell Group PLC).
Kevin Maxwell, Mr. Trachtenberg and Albert Fuller, a former Maxwell executive, are accused of misusing the Berlitz International shares.
The current charges also allege that Michael Stoney, another former Maxwell executive, falsified documents related to a 50 million loan to MGN Ltd. from Bankers Trust Co.
Prosecutors might have a tough row to hoe. A British court in December 1993 had ruled against efforts by Macmillan to recover 5.8 million shares in Berlitz International that Maxwell officials had used as collateral with Lehman Brothers, Credit Suisse and Swiss Volksbank. A judge ruled the stock-lending had been legal.
Nor was the jury in the recent case convinced the Maxwells and company advisers were guilty of abusive stock-lending practices.
After a seven-month trial, the jury failed to convict Kevin Maxwell and his father of charges that they had misused 100 million of shares in Scitex Corp. Ltd., an Israeli company. Nor were Kevin and Ian Maxwell and Mr. Trachtenberg convicted of misusing 22 million in shares in Teva Pharmaceutical Industries Ltd., another Israeli company.
Kevin Maxwell was angered by the second round of charges. "I believe I am the victim of a political decision, taken by politicians in the runup to an election," he said.
His attorneys will try to derail the latest court proceedings, by claiming abuse of process. Meanwhile, Robert Maxwell's legacy lies in the new U.K. Pensions Act.
The law creates a pensions regulator to investigate abuses of pension funds, establishes minimum funding rules and requires that at least one-third of trustees be plan participants. It also provides compensation for plan losses resulting from fraud or embezzlement.
"The Pensions Act will make it more difficult for assets to disappear," said Tom Ross, chairman of the National Association of Pension Funds, London, and executive director of Alexander Clay & Partners, a benefits and actuarial consulting firm.
But Mr. Ross and other pension experts warn the law will not stop an employer intent on embezzling plan assets. Nor are the protections afforded as broad as the general public may think. For example, the compensation scheme will kick in only when the sponsoring company has gone bankrupt.
The greatest irony of the law is that while it is intended to protect participants' pension rights, it is causing companies to re-examine their pension plans and liabilities.
The new minimum funding rules and provisions handing over decision-making authority to trustees on investments and use of plan surpluses are causing corporate financial executives to worry they will lose control over company plans.
Large U.K. companies are examining whether to retain final-pay plans, which reward long-time employees, or switch to defined contribution or hybrid plans, which favor more mobile workers.