I still have not had time to pay much attention to this story, but here is the coverage by the major British media outlets:
The Economist:
SVEN GORAN ERIKSSON, a Swedish football manager of some repute, is a man known as much for his wide travels as he is for his colourful love life. After scoring great success in Italy, he managed the national teams of England, Mexico, and the Côte d’Ivoire. Even seasoned Sven-watchers however were surprised when he rocked up in North Korea in 2009.
This week it was reported that he had been there at the behest of one Russell King, a convicted conman, who had managed to convince a London financial institution, the government of North Korea, and Mr Eriksson himself that he was managing billions of dollars on behalf of the Bahraini royal family.
A report on the BBC’s investigative news programme “Panorama” (or, if you’re outside the viewing area) has it that Mr King, who is now believed to be on the lam in Bahrain, first convinced directors of small investment bank First London Plc to hand over 49% of the company to him, in return for his apparently colossal business. This done, he used First London to finance an investment in Notts County, a Midlands football club with a proud history, now plying its trade in the lower divisions.
Mr Eriksson, drawn in by the promise of shares in Swiss Commodity Holdings (SCH), a vehicle of Mr King’s, was duly installed as football director at County. He was joined there for a time by another fellow dupe, Sol Campbell, an ex-Arsenal and England star. Messrs King and Eriksson ventured to Pyongyang on SCH business, where they are reported to have made a deal with officials in the North Korean government to grant them exclusive rights to the impoverished nation’s gold mines. “I was in the palace and they were handing over to the North Korean government so-called shares”, Mr Eriksson told BBC’s investigative news programme “Panorama”. “They used my name”, he laments; there was even talk of him managing the North Korean football team.
Those who follow developments in North Korea tend to prefer casting Kim Jong Il as an evil genius—crazy like a fox—rather than as merely crazy. While there can be no doubting that he has it in him to run circles around America and China, the Dear Leader appears to be no match for a silver-tongued conman of Russell King’s stature.
The Guardian:
The Serious Fraud Office is looking into an elaborate scam that took in the former England football manager Sven Göran-Eriksson, former spymaster Sir John Walker and the North Korean government.
Investigators are also looking at how the same fraudster took control of almost half of a London investment bank without paying for the shares.
First London plc – the investment bank whose shares were listed on the Plus stock exchange and whose advisers included Tim Yeo MP and Air Marshal Sir John Walker, a former head of defence intelligence – subsequently went into administration with debts of £8.7m.
BBC Panorama has discovered that Russell King, a convicted fraudster, took control of 49% of First London by claiming he was managing billions of dollars for the Bahraini royal family. The case has been referred to the SFO – which only looks at the country’s highest value frauds – by the Financial Services Authority.
An FSA spokesman said: “In this case the acquisition of control occurred without the FSA having been given the prior notice which the law requires it to be given. Had it been given proper notice it would have been in a position to consider whether it should use its powers to object to and prohibit the change of control. The FSA subsequently identified a number of concerns and pursued a series of leads into what was an extremely complex corporate structure. It would be inappropriate for us to comment further at this time due to confidentiality issues.”
The Panorama programme will show how King then used the name of the bank and its high-profile advisers to give credibility to deals.
They included an attempt to obtain funding for a new company that claimed to have assets worth $2tn and the short-lived takeover of the Football League’s oldest club. In 2009, King was behind a controversial takeover of Notts County which promised to bring millions of pounds of investment from the Middle East. The investment, which appeared to have been guaranteed by First London, never materialised and the club was left £7m in the red – but not before Eriksson agreed to join County as director of football. Nottingham police are investigating.
The coach’s contract included a clause entitling him to €11m of shares in a little-known company called Swiss Commodity Holding, which had been set up a few months earlier and was claiming to have assets worth $2tn from the exclusive rights to North Korea’s gold, coal and iron ore.
King persuaded the former England manager to visit the rogue state as part of an SCH delegation and Eriksson was present at a meeting with the North Korean leadership. “I was in the palace and they were handing over to the North Korean government so-called shares,” he tells the programme. “I asked them how much and what they told me was not millions, it was billions of dollars. They used my name. Of course they did. At the end it became a big, big mistake.”
Panorama’s investigation shows that King was secretly running SCH, which was considering a public listing.
Documents detailing SCH’s claims were prepared by First London plc. The investment bank also sent Walker, who sat on the bank’s advisory board, to check out King and his associates. The air marshal tells the programme: “What do I think of Russell King? Not a lot. He was good at chat, but that was his business. He was a con man. I was taken the same way Sven was taken. They just wanted names.”
King had gained control over First London plc shares after convincing the bank that he was managing billions of dollars of Bahraini cash by introducing some of its executives to senior members of the royal family. But Fawaz Al Khalifa, president of the Bahraini Information Affairs Authority, says King was lying about his royal connections: “He might have met members of the family here or there, but we have no financial connection to him or his company.”
King, who was jailed for insurance fraud in 1991, denies running Notts County, SCH or First London plc.
However, the programme has obtained dozens of emails and testimonies showing he was secretly pulling the strings, including some where he refers to himself as Lord Voldemort, the character from the Harry Potter books who can never be named.
First London plc’s parent company, First London Group plc, is still in business. In a statement, its lawyers said the failure to notify the FSA about the change in ownership was a mistake: “This was simply an error and not done for any ulterior or questionable motive. As far as our client is aware the FSA were satisfied that the information provided was in compliance with all legal and regulatory requirements. Our client is unaware of any investigation by the FSA or SFO into its activities so far as they relate to or involve Russell King.”
BBC:
The Serious Fraud Office is examining a con that took in Sven-Goran Eriksson and the North Korean government, BBC Panorama has learned.
Investigators are also looking at how the same conman stole a football club and broke a bank.
Convicted fraudster Russell King persuaded the former England manager to join Notts County FC as director of football and to visit North Korea.
Mr King denies any fraud and said he was just a consultant on the deals.
Mr Eriksson was appointed at Notts County in 2009 following a takeover that promised to bring millions of pounds of Middle Eastern investment.
“For me as a football man it was fantastic, building a club from the bottom of League Two and having the funding to do it, to be a Premier League club. It’s like a dream, so I signed. Big mistake,” he said of the deal.
Milk bill
The promised money never arrived and the club was left £7m in debt. Mr Eriksson says there were early signs that all was not as it seemed.
“I started to have doubts when they came and told me the milk bill has not been paid,” he said.
Mr King claimed his Swiss-based mining company had assets worth almost $2 trillion because it had the rights to North Korea’s gold, coal and iron ore.
He told Mr Eriksson the Notts County cash would come from that mining deal. He then persuaded him to join a delegation visiting Pyongyang.
“I was in the palace and they were handing over to the North Korean government so-called shares,” Mr Eriksson told Panorama.
“I asked them how much that was and what they told me was not millions, it was billions of dollars. They used my name. Of course they did. At the end it became a big, big mistake.”
‘Con-man’
Russell King’s business deals had credibility because they appeared to have the backing of First London plc, an investment bank with advisers including Conservative MP Tim Yeo and Air Marshal Sir John Walker, a former British spymaster.
The bank sent Sir John, a former head of defence intelligence, to check out Mr King and the Korean deal, but he was also taken in.
Sir John said of the deal: “What do I think of Russell King? Not a lot. He was good at chat, but that was his business. He was a con man. I was taken the same way Sven was taken. They just wanted names.”
Mr King also managed to get control of almost half of First London plc without paying a penny for the shares, after he convinced its bankers he was managing billions of dollars for the Bahraini royal family.
But Fawaz Al Khalifa, President of the Bahraini Information Affairs Authority, says that Mr King was lying about his royal connections: “He might have met members of the family here or there, but we have no financial connection to him or his company.”
First London PLC went into administration last year with debts of £8.7m and the Financial Services Authority (FSA) has been examining the deal that gave King control of 49% of its shares. The FSA has now passed its finding to the Serious Fraud Office (SFO).
“In this case the acquisition of control occurred without the FSA having been given the prior notice which the law requires it to be given,” said an FSA spokesman.
First London plc’s parent company, First London Group plc, is still in business. In a statement, its lawyers said the failure to notify the FSA about the change in ownership was a mistake that had been rectified:
“This was simply an error and not done for any ulterior or questionable motive. As far as our client is aware the FSA were satisfied that the information provided was in compliance with all legal and regulatory requirements.
“Our client is unaware of any investigation by the FSA or SFO.”
Lord Voldemort
Mr King, who was jailed for insurance fraud in 1991, denies any involvement in the running of Notts County or First London plc.
But Panorama has obtained dozens of emails and numerous testimonies that show he was secretly pulling the strings at Notts County.
King even referred to himself as Lord Voldemort, the character from the Harry Potter books who can never be named.
The club had been owned by a supporters’ trust, but Mr King persuaded the fans to sell it for just £1 after they met one of his supposedly wealthy benefactors in Bahrain.
Abid Hyat Khan was introduced as a Middle Eastern prince, but Panorama has discovered he is actually on the run from British police.
He absconded from the UK in 2008, when he was due to stand trial for allegedly stealing almost £1m. Khan denies posing as a prince.
The BBC’s Panorama show can be found here.
