A defendant in the Goldtrail Travel case in the High Court has admitted signing an agreement that included an “artificial device”.
Former XL Leisure Group director Magnus Stephensen made the admission on Friday under cross examination about agreements between Viking Airlines and Goldtrail.
Stephensen and fellow defendants Phil Wyatt and Halldor Sigurdarson, together with Hong Kong-registered Black Pearl Investments, are contesting a claim for £1.4 million by Goldtrail liquidator PwC.
Wyatt, Stephensen and Sigurdarson were in charge of XL Leisure when it collapsed in September 2008. Black Pearl Investments was set up soon after, with Wyatt as the chief provider of funds.
Goldtrail went into administration in July 2010 at a cost of £25 million to the Air Travel Trust fund. Viking Airlines sold seats through Goldtrail and the liquidator alleges the defendants were involved in the “misapplication” and “misuse of payments” in the run up to the failure.
Abdulkadir Aydin, who was the sole director of Goldtrail, is believed to have transferred £10 million to himself and his family before putting the company into administration. Aydin is no longer in the UK.
The defendants argue they had no overall control of Viking Airlines and that a £1.9 million payment they made to Goldtrail in 2010 was to buy shares in the company.
They say control of Viking was split 50-50 between them and the airline’s chief executive Christian Tajeran, who has declined to give evidence to the court in person.
Counsel for the liquidator argues just £500,000 of the £1.9 million payment was to purchase shares in Goldtrail. PwC is also pursuing a claim for £3.64 million against Turkish carrier Onur Air which had agreements with Goldtrail.
Under cross examination about a share-purchase agreement between Viking and Goldtrail, which referred to BPI Hong Kong as “the purchaser”, Stephensen told the Court: “It is an artificial device in order to pay Mr Aydin £1.9 million for his shares in Goldtrail.”
Hilary Stonefrost QC, counsel for PwC, told him: “You signed a sham. So you are prepared to sign false documents?” Stephensen said: “I signed that document.”
Stonefrost put it to him again: “You said it was an artificial device. You signed a document that included a false statement, didn’t you?” Stephensen said: “Yes, I signed that agreement.”
Earlier, Stephensen disagreed with the evidence of solicitor Malcolm Grumbridge, who acted for Wyatt and was listed as a director of Black Pearl Investments, a company Grumbridge set up.
Grumbridge told the court he had not attended a BPI board meeting in January 2010 to discuss the Viking agreements with Goldtrail. He said no such board meeting had taken place.
Stephensen insisted there had been a board meeting and that Grumbridge was present.
Counsel for PwC pointed out: “A board meeting of BPI would be you and Mr Grumbridge wouldn’t it?” Asked if he disagreed with Grumbridge’s evidence, Stephensen said: “Yes, I would disagree. There was a board meeting.”
Asked why there were no minutes of the meeting, Stephensen said: “Minutes were produced by Mr Grumbridge. I can’t give details as to why there were no minutes.”
Stonefrost told him: “I put it to you that Mr Grumbridge’s description is correct … Mr Grumbridge’s evidence is more consistent with the relevant documentation than yours.”
Stephensen replied: “Mr Grumbridge obviously has a bad memory … Mr Grumbridge’s memory is not very good.” He also gave evidence conflicting with a co-defendant’s on whether Black Pearl Investments had a management board.
Stonefrost said: “Mr [Halldor] Sigurdarson’s evidence is that there was a management board of BPI Hong Kong. You accept that?” Stephensen replied: “No, I don’t accept that.”