In 1940, a new fashion house was formed in London, which traded in a modest way for four decades under the name Polly Peck. What followed was spectacular. Turkish Cypriot Asil Nadir bought a majority stake in 1980, then used Polly Peck as a vehicle for overseas investments. Rights issues raised the capital necessary to create or purchase enterprises of extraordinary diversity in fields such as packaging, food, fruit, resort hotels, textiles, mineral water, housewares and electronics – the latter category including the first recorded foreign takeover of a major Japanese player.
The stock-market rise from zero to hero was astonishing. In ten years Polly Peck went from a market capitalization of £300,000 to £1.7 billion, becoming a member of the elite Financial Times 100 Share Index in 1989. It then had around 17,000 employees and was making an annual profit of over £160 million. Financial institutions and wealthy individuals whose investments supported this soar-away success story congratulated themselves on their acumen and collected handsome dividends.
And then Polly Peck hit a brick wall – at speed. Asil Nadir tried to take the operation private, but when the attempt failed it quickly became apparent that the company was in deep financial trouble. The Nadir holding company was raided by police and Polly Peck shares went into free fall. The business collapsed in 1990 as Nadir faced 70 charges of theft and false accounting.
Though strenuously denying the charges – which were sufficiently grave to justify bail set at £3.5 million – Asil Nadir didn’t stay around to argue the point. Bail was allowed to lapse (as a result of official negligence rather than the conspiracy in high places that some alleged) and the disgraced entrepreneur slipped out of Britain in a private plane, to find refuge in his native Northern Cyprus – which conveniently lacks an extradition treaty with Britain.
Toll: Numerous investors lost megabucks and thousands of workers lost their jobs.
You should know: Asil Nadir was able to flee from the short arm of British justice because police detectives who were supposed to be watching his every move were not on duty, having been stood down during a public holiday to save the cost of their overtime pay.