The Observer from London, Greater London, England • 23

lnsoo: Ti SUNDAY 11 AUGUST 1985 23 MJSEEJESS Fears of more losses at PCW KKSSM' by GARETH DAVID LUCKLESS members of the PCW underwriting agency syndicates at Lloyd's face a bitter new financial blow on top of the threat of expulsion from the insurance market. It is now becoming clear that the total losses of the ill-fated syndicates could be far worse than the 130 million so far announced. Some market observers are suggesting that when claims for the 1983 and 1984 underwriting years have been taken into account, the total loss could be nearer 250 million. Any news of further losses on this scale will reinforce the determination of syndicate members to sue the managing agents a subsidiary of insurance broker Minet Holdings for breach of contract and to sue Lloyd's for breach of duty. The steering committee of Names is working on a statement of claims after considering a detailed report on the PCW disaster by accountants Price Waterhouse.

It expects to issue writs against Minet, Lloyd's and former PCW executives early next month. Confirmation of the anger felt by the Names emerged last week when Lloyd's announced that 325 of the record 517 members who had failed its annual solvency test this year were from the 450 worst hit by the PCW losses. That figure is certain to renew calls for Parliamentary intervention since it totally contradicts Trade Minister Alex Fletcher's assertion in the Commons last month that a majority of the worst hit PCW members had passed the solvency test. In a recent letter to PCW losers, the steering committee of Names advised against meeting the solvency requirements by pointing out that the new, stricter accounting policies adopted by the underwriting agencies would mean members having to find twice the level of assets next year to pass the solvency test. The new accounting policy adopted at the suggestion of auditors Spicer Pegler does away with that followed when the syndicates were under the management of Richard Beckett underwriting agencies, which would have spread the cash call over a number of years.

Meantime it looks like disappointment for those PCW members hoping to see former star underwriter Ian Posgate take over the running of their affairs when his suspension from underwriting expires in January. He has held lengthy discussions with the present managers of what is now known as Additional Underwriting Agencies (No. 3), but has failed to reach any agreement, and is understood to be considering a number of other propositions. SUE ADLER A FEELING of deja vu overwhelmed Lord Keith of Castleacre last Friday as the 68-year-old veteran merchant banker presided gloomily over a press conference (above) to discuss disastrous interim figures from STC, the deeply troubled computers and telecommunications group. After ditching the interim divided promised by ousted chairman and chief executive, Sir Kenneth Corfield, Lord Keith announced there would be a new, intensive review of STC's affairs to establish what businesses the company should stay in.

Therewillbeathoroughgoing watcher is going for 65 million before tax, but cannot begin to estimate the crucial attributable figure which, at the half year stage, was a loss of 8 7 million. Neither Lord Keith nor bis boardroom colleagues would give any clue as to the likely level of provisions for the second half of the year, how they aretobetreatedjorthenumberof redundancies. It is a sorry tale and not over yet We have not reached the bottom. There will need to be a long says the analyst, reflecting widespread Cityfeelingthat even afteranear300pfallfrom their peak to 92p on Friday, the shares still lack support. review and we will have to make he said, Iwentthrough all of course, referring to bis eight-year reign as chairman and chief executive of RollsRoyce, a task he took on after the aero-engines giant collapsed.

Nobody expects him to stay at the helm of STC that long, but gloomy City analysts fear the company's problems may prove just as intractable for the new chief executive Lord Keith is now seeking. Meanwhile, on the earnings front, fullyear figures are so far eluding the City's analysts. One award winning electronics by JIM LEVI SIR CLIVE SINCLAIR last night claimed sales of home computers by his troubled Sinclair Research had recovered so sharply they were now back to 80 per cent of the peak sales figures we "were achieving this time last Putting a brave face on publisher Robert Maxwell's decision to call off his planned 12 million rescue of the business, Sinclair said: 'We no longer need rescuing. Three other people expressed interest in investing money in Sinclair Research before Mr Maxwell made his offer. We will now go back and talk to them 5 One of the potential new backers for his business is an overseas company in what Sinclair describes as the minerals There are also, he claims, three British companies interested in a possible injection of new capital.

He even suggests that the City institutions who paid 13.6 million or 34 a share to buy 10 per cent of his company back in 1983, might now be interested in putting up more cash. 'They have not been fully briefed on the company's position he said. I need to do that very soon. I believe if they knew what we had achieved lately they would be interested in buying more For hard evidence of the recovery, Sinclair points to the major sales deal he has sewn up with the Dixon's retail chain in Britain, claiming the High Street combine which also owns Curry's, will spend more than 10 million on Sinclair home computers and pocket televisions over the next three months. Sir Clive's claim to have this major sales deal has been confirmed by Mark Souhami, the chief executive of Dixon's.

Although he will not confirm the figure of 10 million sales for the next three months. Before flying off on holiday to Venice, Souhami said: 'From next week we shall be mounting a major sales and promotional exercise for the QL and Spectrum computers and the Sinclair pocket Sinclair claims other retailers are poised for similar promotions. 'This is a seasonal business and all the major retailers have plans of different sorts. We have some very large orders coming he said. Meanwhile sales overseas appear to be picking up sharply.

We have had 26,000 mail order inquiries from the United States for the QL model where we have just completed a test Sir Clive says. We are still the biggest exporter of home computers We can claim 70 per cent of the Spanish home computers The problems with his other company, Sinclair Vehicles, makers of the controversial C5 electric car, remain as serious as ever. Sales in the home market appear to have virtually dried up despite some savage price cutting from the original 399. Instead the company is relying on sales of around 100 units a week to keep the South Wales factory ticking over. Sinclair Research's sudden plunge into crisis earlier this year wrecked plans to float the company.

Almost no sales in January and February caused a cash-flow crisis with the company's main creditors, Timex and Thorn-EMI, and bankers Barclays and Citicorp, staunching the flow. In June it was felt 15 million was needed for a financial reconstruction. Now Sir Clive claims no such reconstruction is needed but cash is required to finance new product ventures including telecommunications products and the ambitious joint venture with ICL chairman Rob Wilmot to develop the so-called wafer scale microchip. DTV's new Chat show German lead in new printing technology as well as in editorial design. Chat will be printed by the cold-set web offset process at Development Workshop printers at Diss in Norfolk.

The process gives good quality colour economically for large runs. Half Chat's 32 pages will be in full colour and half will have spot colour. ITP is investing 4 million on the project. Intriguingly, the link with Axel Springer may lead to further joint ventures with Britain's ITV companies. Axel Springer, a private NEW DIRECTIONS In hearing aids, Ironing, security Bid ready for Tl page 24 In my vlewRobln Marrls page 26 World's fastest-growing company page 27 Your money page 28 K4M.hm.MM4 I THE ITV companies' publishing offshoot, Independent Television Publications responsible for TV Times is to launch a new women's weekly in October called Ghat.

Chat will be launched with a print order of between one and one and a quarter million copies and ITP's managing director, Alwyn Wise, hopes for steady sales of at least 750,000 a week during the initial few months of the publication's life. ITP's move comes as both the ITV companies and the BBC await the verdict of the Monopolies Commission investigation into the duopoly of the broadcasting publications market held for so long by TV Times and Radio Times. The Commission's six-month-long investigation was by PAUL BARRETT completed at the end of last month and is now with Trade and Industry Minister Norman Tebbit. The BBC and ITV fear the Commission will recommend an end to their exclusive publishing domain and allow others to enter the marketplace. At present only Radio Times and TV Times give full television and radio programmes for a week ahead.

The BBC owns the copyright on its programme schedules and copyright for the ITV companies is assigned to ITP. Fears that the Government will end this arrangement explain ITP's brave decision to enter the highly competitive market for women's magazines dominated up to, now by Reed International's IPC offshoot. But ITP's managing director Alwyn Wise makes it clear he is not going it alone. He has signed a consultancy agreement with Axel Springer, the privately owned German publishing empire. The concept of the magazine is distinctively new to the UK according to Wise.

It is a colour magazine for women, packaged and presented as a tabloid Chat will be published on Tuesdays and have a cover price at 18p closer to popular tabloid dailies than the glossy women's magazines. The editorial style will verge on the short and snappy. The target readership is women aged 25 to 45 in the socioeconomic groups CI, C2 and D. The concept of Chat, owes much to another Axel Springer publication called Bild der Frau. The German women's magazine market is as competitive as that in Britain but Springer, Germany's largest newspaper group, has managed to raise the circulation from an initial one million to 2 .4 minion over two years.

ITP has learned from a IRELAND IE1.212 ITALY 2,530 lira NETHERLANDS 4.25 guilders PORTUGAL 222 escudos SPAIN 218.5 pesetas SWITZERLAND 3.125 francs AUSTRIA 26.55 schilling. BELGIUM 77.15 francs CANADA SC1.79 DENMARK 13.66 kroner FRANCE 11.55 francs GERMANY 3.78 marks company, began selling shares to 'approved' buyers last month. One of the reasons for doing so was to raise new finance for further investment in Germany's television industry now being deregulated to allow for the expansion of cable and satellite broadcasting. UNITED STATES $1,335 GREECE 176 drachma Selling rates at Barclays, Heathrow, on Saturday morning. On ths week, the trade-weighted index of the pound fell from 81.1 to 80.7.

The Al-Fayeds: A $300m question by MELVYN MARCKUS, City Editor, and LORANA SULLIVAN THE MANAGING director of a major subsidiary of Unigate, Ray Turner, faces charges of conspiring with unknown persons unlawfully to produce a controlled drug. Turner, 43, runs Turner's Turkeys of Spalding in Lincolnshire which was acquired by Unigate for several million pounds in 1981. He was not in court last week to hear that the case had been adjourned until 1 October. Ian Thomas, prosecuting, told Spalding magistrates This is a serious matter which can only be treated at Crown The case was adjourned to give the defence time to examine prosecution reports being prepared. The offence is alleged to have occurred at Spalding or elsewhere between 1 January and 1 June.

Unigate' finance director, Daniel Hodson, told The Observer on Friday This is a personal matter for Mr Turner. He is continuing to work for For details, see page 28 Also, neither the Sultan's statement nor that from Allen Overy refers to the role as a director of Hyde Park SA of Christopher Hanbury, the Sultan's representative here. Hanbury is a director of the company which owns the land relied on in making this assertion. The letter says 'On 27th August 1984 Mohamed Al Fayed wrote on his own headed paper to Credit Suisse, Zurich, instructing them to transfer million from the Sultan's account to the account of Hyde Park Investment Holding SA at Compagnie de Gestion et de Banque Gonet SA in Geneva. Hyde Park Investment Holding SA is an Al Fayed company in Liechtenstein which opened an account at Compagnie de Gestion et de Banque Gonet on 27th August 1984.

The transfer of million was made by Credit Suisse on 28th August 1984. On Sth September 1984 a further million was transferred, on the Sultan's instructions, from accounts at Morgan Guarantee (sicj to the account of Al Fayed Investment and Trust SA at Compagnie de Gestion et de Banque Gonet SA. On 7th September 1984 a further million was transferred, on the Sultan's instructions, from accounts at Citibank Corporation to the FURTHER new information concerning dealings between the Sultan of Brunei and Mohamed Al-Fayed prior to the Al-Fayed brothers' take-over of House of Fraser has been provided to the Government. The information comes in a letter sent by Sir Edward du Cann MP, the chairman of Lonrho, owners of The Observer, to the Trade Secretary, Norman Tebbit, on 1 August. The letter details five cash transfers totalling $300 million made from bank accounts connected with the Sultan to a Swiss bank associated with the Al-Fayeds in August and September last year, two months' prior to the Al-Fayeds' purchase of Lonrho's 29.9 per cent interest in the Harrod's stores group for 138 million.

It also claims that $284 million was then instructed to be transferred to Kleinwort Benson in London for the benefit of AlFayed Investment Trust SA, the Liechtenstein company whose U.K. subsidiary ultimately made the 615 million take-over bid for HoF. These detailed allegations were made, though not publicly, before recent statements responding to The Observers' earlier disclosure of the first transfer of $127 million from a Swiss account of the Sultan to the Swiss bank, Compagnie de Gestion et de Banque Gonet. One statement was made in unusual circumstances by the Sultan himself. Others came in letters sent by the Al-Fayed's lawyers to both The Observer and its four independent directors.

The lawyers refer to what they claim is the 'unqualified assertion' made by Lonrho chief executive 'Tiny' Rowland to the Al-Fayeds' merchant bankers, Kleinwort Benson, that several hundred millions of dollars' were transferred from the Sultan's bank accounts through accounts of Al-Fayed companies on to The du Cann letter goes into the detailed information Row Dorchester Hotel in London, bought by the Sultan for some $80 million last January. The statement from the Sultan, buried away in the middle pages of one Sunday newspaper, has yet to be received by The Observer or, seemingly, any other newspaper. Just who issued the statement is also unclear as no signed copy of the statement has been produced. It is somewhat unfamiliar for heads of state to communicate with newspapers in such a manner. The statement says that it is 'completely untrue' that the account of Al Fayed Investment and Trust SA at Compagnie de Gestion et de Banque Gonet.

On 26th September 1984 Mohamed Al Fayed gave written instructions to Credit Suisse, Neuchatel, to transfer million from the Sultan's account to the account of Hyde Park Investment Holding SA at Compagnie de Gestion et de Banque Gonet. At the end of August 1984 Mr. Carl Hirschmann Jnr, acting on previous powers of attorney from the Sultan, transferred million of the Sultan's money to Compagnie de Gestion et de Banque Gonet. On 28th September 1984, on the instructions of Mr. Martin Muller, a director of Hyde Park Investment Holding SA and Al Fayed Investment and Trust SA (AITS A), Compagnie de Gestion et de Banque Gonet transferred million from the accounts of Hyde Park Investment Holding SA and AITSA to Kleinwort Benson in London.

The million were to be held by Kleinwort Benson to the order of AITSA. Such sums would appear somewhat excessive either in relation to the 'legal matter' mentioned in the Sultan's statement or two new authorities disclosed by the Al-Fayed's $1 i 1 Sultan of Brunei, reputedly the world's richest man, has provided secret financial backing to the Al-Fayeds for the HoF purchase. But it appears to contradict the state ment made by Allen Overy in one crucial aspect. pi Referring to a power of attorney dated 24 August which Ihe Observer had reported related to the Sultan's bank account at Credit Suisse, Zur ich, and which preceded the solicitors dated 20 August and referring to a super luxury bank transfers mentioned the du Cann letter, the solicitors' state no such power of attorney However, the Sultan's state JK a 0 ment confirms the existence of a document dated August 24 and says it is an authorisation i 1 which had been given to solve in Peterborough, there no snorrage ui eipareiiwu rffiri staff Ynti'll alcr finrl an niltstandine range of office a legal matter for His Maiestv. Just what this matter was and why it could involve a sum as substantial as $127 million DLnj(sLnjD7(gS The highest level of Government incentives on the UK mainland are available here in the County of Mid Glamorgan.

Cash grants, cheap loans, rent free periods in modern advance factories, training and relocation assistance, are some of the incentives available. For further details and free copies of our new Business Location and Financial Incentives Guides, return this coupon to the Industrial Development Unit, Mid Glamorgan County Council, Greyfriars Road, Cardiff CF I 3LG or phone 0222 820708, and ask about the closest "Development Area" to London, on the M4. factorv sPace- excellent houses and good schools. And a superb range of recreational and leisure opportunities. I Pnr mir free miirie to relocation.

DOSt the COUDOn to: the transfer itself is not denied is just one of the more lohn Bouldin, Peterborough Development Corporation, PO Box 3, Peterborough PE1 1UJ. Telephone (0733) 6893L yacht. The Lonhro chairman goes on to press the Trade Secretary to either refer the Al-Fayeds' acquisition of HoF to the Monopolies Commission or to establish a Companies Act In their letter to The Observer's independent directors received by other newspapers before it reached at least two of the four directors the Al-Fayeds' lawyers, Allen Overy state 'no funds were ever transferred to Kleinwort Benson in order either to purchase Lonrho's 29.9 per cent shareholding or to satisfy the general offer made for shares in Kleinwort Benson, they say, in a letter to this newspaper, have informed them that no monies were transferred from COGEBA to the bankers on 28 September. These statements do not, however, help to clarify the purpose of the transfers mentioned in the du Cann letter. questions than answers provided by last week's statements.

Name, 0 0 The Al-Fayeds' lawyers made a number of serious allegations Position. to the independent directors of Position Name Company. Address he Observer about this newspaper's coverage of the HoF affair. In particular they ques Company Address 0 0 0 Telephone. Telephone tion the independence and reporting of Observer journalists.

These allegations are totally unjustified. The Observer is preparing to take legal action over the contents of tie The Peterborough Type of business ClDDBBE letter..