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Court battle over missing millions
SHAREHOLDERS in Langbar International, one of the biggest business scandals in Yorkshire history, went to the High Court yesterday in a civil trial to recover millions of pounds in stolen funds.
The former AIM company 'lost' a staggering 365m two years ago at a time when Langbar was run out of Yorkshire by the ex-Baker Tilly financier Stuart Pearson.
The proceedings of Langbar International v Rybak & Others are due to be heard over the next few weeks in the High Court.
Nigel Smith, co-ordinator of the Langbar Action Group, which represents 25 per cent of the shareholders, said: "This is the civil trial to recover the funds stolen in the biggest fraud on the London Stock Exchange to date and a lot of the regulatory bodies have egg on their face on this one.
"We anticipate that there will be a lot of juicy revelations about the fraud and the failure of the Nomad, Nabarro Wells – recently fined by the LSE over this very matter – and others like the brokers, lawyers, the Stock Exchange, the Financial Services Authority and the complete failure of the Serious Fraud Office to arrest anyone, in spite of the fact that the fraudsters' whereabouts are known and the evidence against them is overwhelming. Langbar was at one time worth over $1bn – a quarter of the value of Enron, but unlike Enron, no-one has ever been arrested," he said.
The action group claims that shareholders have still not received their shares as a result of market abuse.
The case against Langbar founder Mariusz Ryback and others opened in the High Court yesterday. It has been adjourned for a week so the judge can read the hundreds of pages of evidence and will reopen on November 19.
"This is a massive fraud and no-one seems to be taking any notice," said Mr Smith.
He added that the shareholders believe that now Nabarro Wells has been fined 250,000 by the London Stock Exchange and publicly censured for its conduct it is now 100 per cent liable for any losses the new Langbar chairman can't recover. The rest will be paid out in insurance.
Technically shareholders could get 100 per cent of their money back, but Mr Smith said a more likely scenario is they will only get back 30p in the pound.
"If Langbar win, the scheme shareholders who form the majority of the investors will only get a downpayment of 3p in the pound. It will then be up to the company to recover the rest of the losses from the Professional Indemnity Cover for the City companies involved. The Langbar fraud is a great injustice," he said.
The new Langbar chairman David Buchler is trying to recover money for the scheme shareholders while Mr Smith is acting for 132 shareholders who opted out of the scheme and retained their rights to bring independent legal action to recover their investment.
The Langbar Action Group represents both scheme and independent shareholders.
Mr Buchler was unavailable for comment yesterday, but in a letter to shareholders dated October 19 he said a huge amount of work has been going on in the background.
In the letter he said: "The company has recently exchanged witness evidence with the Rybak defendants and preparation for trial is progressing well. As you will be aware the trial is set to commence in early November and by the New Year we will have an idea of where we stand in relation to the litigation against Mr Rybak and the other defendants."
In 2005 Langbar revealed that 365m in cash in banks in Brazil and Holland had disappeared. An investigation was conducted by Kroll Associates which concluded "a serious fraud affecting the relevant assets" appeared likely.
Background material can be found at www.langbaractiongroup.com.
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Saturday 11 February 2012
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