Carl Cushnie, the founder of collapsed trade finance provider Versailles Group, threw a Christmas party five years ago for the richest investors in his private business, falsely promising them their money was safe from a scandal that had days earlier engulfed his public company, a court heard yesterday.
"They thought they knew how the money was going to be used," Anthony Evans QC, counsel for the Serious Fraud Office told a jury at Southwark crown court.
In fact the investments were allegedly circulated through a handful of internal companies, giving the impression of genuine transactions, and booked as turnover. Published accounts put the group's trade debtors in 1992 at Ј3.78m, rising to Ј79.7m by 1999. It is alleged that the actual figures had been Ј316,000 in 1992, and just under Ј5m by 1999.
Mr Evans said profits and returns to investors were effectively funded out of their initial stake.
