Key figures in the £2.6 billion Guinness scandal in 1986 were guilty of "the cavalier use of company monies and a contempt for truth and common honesty", a British Department of Trade and Industry report concluded yesterday.
But despite the condemnation of the former chief executive in Britain, Mr Ernest Saunders, and Mr Gerald Ronson, Mr Anthony Parnes and Mr Jack Lyons for their part in the share-support scheme - designed to inflate the price of Guinness's shares during its attempt to take over the drinks company, Distillers - the President of the Board of Trade, Mrs Margaret Beckett, has ruled out further legal action against the men.
The 309-page DTI report, which was delayed while criminal proceedings against the men and their subsequent appeals were concluded, bitterly attacked the "cynical disregard of laws and regulations" that allowed the illegal share scheme to go ahead.
In a warning to the City of London, the report's authors, Mr David Donaldson QC and Mr Ian Watt, a chartered accountant, said: "Even at this remove in time, some in the City may experience shock at what they see, and perhaps recognise, in the mirror of this report."
It would be easy, the report continued, to regard Mr Saunders "as a man corrupted by a milieu. Such an assessment would contain an element of truth". However, the report added that Guinness's takeover of Distillers, in particular Mr Saunders's role in the share-support scheme was "cavalier" and criticised him for paying "breathtakingly high" sums of money to Mr Parnes. "It was Mr Saunders who decided what company he should keep and what advice he should accept," the report added. "It demonstrated a quite wanton approach to his stewardship of company funds, even ignoring the illegalities and improprieties involved in much of the work for which the payment was made."
Meanwhile, Mrs Beckett said she had received "strong legal advice" that further prosecution was out of the question. However, moves to tighten regulation of the City may be one consequence of yesterday's report.
Mr Saunders, who was released from a five-year prison sentence in 1991 because doctors certified he was suffering from the symptoms of pre-senile dementia, insisted in a statement yesterday that he was a "convenient scapegoat". He criticised the DTI report as a "highly selective and blinkered version" of Guinness's bid for Distillers.
As chief executive at the time of the take-over, Mr Saunders said he was prepared to accept responsibility for "what went on in the company", but he denied "actual knowledge" of the financial transactions involved in the Distillers takeover.
Now living in the affluent London suburb of Putney, Mr Saunders collects an £80,000-a-year pension from Guinness. Mr Ronson has also made a successful recovery from the scandal after spending one year in prison. He runs the Heron property business in London - one of the largest private companies in Britain.
The stockbroker, Mr Parnes, who was accused of recruiting the others into the share scheme, lost most of his £10 million personal fortune after he was released from a 21-month prison sentence. Escaping a prison sentence because of ill health, Mr Lyons, was fined £3 million for his part in the Guinness affair. He is living in retirement in Florida with his wife.
