Polly Peck

Polly Peck International (PPI) was a small British textile company which expanded rapidly in the 1980s and became a constituent of the FTSE 100 Index before collapsing in 1991 with debts of £1.3bn, eventually leading to the flight of its CEO, Asil Nadir to Northern Cyprus in 1993. Polly Peck was one of several corporate scandals that led to the reform of UK company law, resulting in the early versions of the UK Corporate Governance Code. On 26 August 2010 Nadir returned to the UK to try to clear his name. Prosecutors alleged that he stole more than £150m from Polly Peck and he faced trial on 13 specimen charges totalling £34m. Nadir was found guilty on 10 counts of theft totalling £29m. On 23 August 2012 at the Old Bailey he was sentenced to 10 years in prison. Polly Peck began in 1940 as a small fashion house, founded by the husband-and-wife team of Raymond and Sybil Zelker. The clothes were designed by Sybil, and the business end was handled by Raymond. By the end of the 1970s the fashion house was struggling. Early in 1980 Restro Investments, a company Nadir controlled, bought 58% of the company for £270,000. Asil Nadir took over as Chief Executive on 7 July 1980. On 8 July 1980 Polly Peck launched a rights issue to raise £1.5m of new capital for investments abroad. In 1982 Nadir began the early ventures. These included Uni-Pac Packaging Industries Ltd, Voyager Kibris Ltd, and Sunzest Trading Ltd, three companies incorporated in the Turkish Republic of Northern Cyprus. Uni-Pac was a corrugated box manufacturer and packaging company formed to take advantage of surplus citrus fruit being grown in Cyprus, which was forecast to produce a minimum of £2.1 million profit. Voyager Kibris Ltd was used to purchase the Sheraton Voyager Hotel in Turkey and to build resort hotels in Northern Cyprus. In September 1982 Nadir acquired a major stake of 57% in a textile trader, Cornell, whose shares were considered penny shares. Cornell rose from 26p to over 100p as soon as Nadir's interest was confirmed.