Fraud trial hears of unpopular Alliance Resources' executive

An Irish oil company executive has told a London court that he was not "popular" with City investors backing London-based Alliance Resources as he tried to boost its fortunes. Mr John O'Brien had taken control of Alliance after his company, Manx Petroleum, lent money to assist the plc with its large debts.

Mr O'Brien told Southwark Crown Court of Alliance's "exciting" assets in the United States - including a lease to exploit parts of the proven Valentine Field in Louisiana for natural gas - and plans for expansion in eastern Europe.

He said it became "inevitable" that Manx and Alliance should merge. However, that move needed the approval of the shareholders.

Accused of defrauding investors after running a £7.2 million sterling (€11.3 million) rights issue for Alliance in April 1995, Mr O'Brien said it became a priority to get shareholders to agree to the merger in 1993.

"We set about talking to the institutional shareholders of Alliance," he said. "Because of things that had gone on in the past, I was not that popular."

Earlier describing himself as "fighting Irish", he said: "I was not that experienced in giving presentations [to shareholders] and there was a lot of adverse publicity." He said the largest institutional investor in Alliance was Scottish Amicable "who were definitely anti-John O'Brien".

As a result the Scottish Amicable holding was purchased by a colleague through another company. Mr O'Brien, of Midleton, Co Cork, denies five charges of forgery, two offences of false accounting and two offences under the Financial Services Act. He is alleged to have lied to investors subscribing to the 1995 rights issue by Alliance on the London stock market over their prospects of striking lucky in the US.

The Serious Fraud Office claims Mr O'Brien lied about having a valid lease to exploit underground minerals, saying the lease had been terminated; there was no gas in what he claimed to be the flagship well; the well, in fact, was dry and needed to be capped. Mr O'Brien claims that an experienced solicitor was employed to deal with City of London regulations. He said Mr Nicholas Grey was made a director and was responsible for disclosing assets of the board and complying with City rules. He said he had "absolute" trust in Mr Grey and his professional advice, however he continued to use his own expertise in "in the field".

The trial continues.