Imperial pair 'trousered' cash from sale of jet

Disbarred directors Lincoln Fraser and Jared Brook of the failed finance group Imperial Consolidated sold the company's $1m (£620,000) executive aircraft on the day they placed Imperial into administration. They then put the proceeds of the sale of the aircraft into their own bank account, according to administrators.

Philip Lyon of the accountants Mazars Neville Russell said: "I believe Lincoln Fraser and Jared Brook have literally 'trousered' the money to which, I believe, they are not entitled."

Mr Lyon has just returned from the United States, where he has started proceedings in the New York bankruptcy court to help trace Imperial's activities in that country. Approving a Section 306 order, Judge Prudence Carter-Beattie said she wished she had the power to stop Imperial's directors moving monies. "These sort of people should be locked in a steel cage and denied telecommunications," she said.

Imperial Consolidated, the controversial UK-based offshore finance group, went into administration in June. Investors face losses of up to £200m.

Evidence presented in a British court revealed that although Mr Fraser, 31, and Mr Brook, 32, had resigned as directors in advance of being disbarred by the Department of Trade and Industry, they had, in fact, continued to run and own the group.

Imperial Consolidated bought the aircraft, a Beech Super King Air 200, for more than $1m. The plane was registered to the group's holding company in Delaware, but operated from the UK.

Documents show that the aircraft was sold to an American aviation company on 10 June 2002. "This was the day I was appointed administrator to the UK companies," Mr Lyon pointed out. The aircraft was shortly afterwards flown to America via Goosebay in Newfoundland.

In the British court document, Mr Lyon says that a payment of some £800,000 was placed in a Scottish bank account personally controlled by Mr Fraser and Mr Brook.

"Quite apart from the misappropriation of the proceeds of sale, I am concerned that the aircraft was sold for proceeds substantially lower than [the price] for which it was bought just six months earlier," said Mr Lyon.

In response Mr Fraser said: "The aircraft was legitimately sold, for a fair market price, from a company not in administration or liquidation, and the proceeds returned to the owner."

Mr Lyon says that the administrators are still seeking much of the $300m invested by individuals in the group. A large proportion is said by Mr Fraser and Mr Brook to have gone to purchase mining rights in Argentina.

The Serious Fraud Office and the Department of Trade and Industry, assisted by the Lincolnshire Police, are investigating the running of the Imperial Consolidated Group. The SFO has set up a website to keep investors informed.