Former Powerscreen chief to face trial on fraud charges

Powerscreen International's former chief executive will face a trial by jury in Britain next year on charges brought against him by the Serious Fraud Office. Mr Shay McKeown yesterday failed in his bid to have a charge of withholding information dismissed at Bristol Crown Court.

Mr McKeown is one of three former Powerscreen directors who have had charges brought against them following a three-year Serious Fraud Office investigation into accounting irregularities at Matbro, one of the Tyrone company's subsidiaries.

Powerscreen's management informed the London and Dublin stock exchanges in early 1998 that a £47 million sterling (€76 million) accounting black hole had been discovered at Matbro, a Gloucestershire-based tractor manufacturer. Just a few months earlier, Powerscreen had raised £18 million in a new share issue.

The Serious Fraud Office has brought charges against Mr McKeown, Mr Barry Cosgrove, Powerscreen's former finance director, and Mr Edward Holmes, the former managing director of Matbro, based on evidence gathered during its investigation into the Tyrone group.

Mr Andrew Trollope QC, representing Mr McKeown, argued at length yesterday that Mr McKeown's charges should be dropped. Mr Trollope said his client had been completely in the dark about Matbro's financial affairs and had no knowledge prior to the new share issue about accounting irregularities.

But Mr Paul Garlick QC, representing the Serious Fraud Office, told Bristol Crown Court he believed Mr McKeown did have knowledge of Matbro's serious financial problems prior to the placing and that he had made a decision to "keep it under wraps" until after the new share issue.

Mr Garlick said a timetable of events based on evidence gathered by the Serious Fraud Office could illustrate that Mr McKeown was "well briefed" on the financial position of the Powerscreen group, including Matbro, ahead of the December 17th share issue. He said evidence showed that Mr McKeown was sufficiently concerned about Matbro as early as November because he had asked business consultants, Cantrey Vellacott, to conduct an investigation into the situation at Matbro.

Mr McKeown's legal team vigorously rejected Mr Garlick's arguments and claimed that neither evidence nor motive existed to prove that Mr McKeown had deliberately concealed information from the market.

However, Judge Lester Boothman said he was satisfied that a prima facie case existed against Mr McKeown, and refused to dismiss the charges.