Mayfair finance director gave stolen money to charity
- Friday 30 June 2006
Smith, 43, who caused the collapse of the London merchant by selling off customers’ wines and pocketing the proceeds, actually saw very little of the £1.5m he stole.
Administrators Grant Thornton told decanter.com he gave around £60,000 to two major gay charities, which took the money in good faith.
He gave £200,000 to his partner Andrew Comer – now known as Lord Comer after changing his first name by deed poll – while £300,000 was paid directly into his account. Comer denies knowledge of the theft, claiming he thought the money was paid to him for debt collection work for Mayfair.
Grant Thornton estimates that Mayfair’s losses total around £3m.
Mayfair’s two remaining directors, David Searle and Michael Mackenzie, told creditors at a meeting last week that in a small wine merchants like Mayfair, living ‘hand to mouth’, a lot of trust was placed in Smith.
The administrators said that fraud was ‘endemic’ to finance departments. While the day-to-day administration of Mayfair may have seemed chaotic, Mackenzie and Searle ‘cared enormously’ for their company, and had no idea of the catastrophe about to engulf them. Smith’s actions, they said, were ‘a real breach of trust’.
The finance director, who filed for bankruptcy when Mayfair claimed money back from him, had not renewed the company’s Directors and Officers insurance policy and medical insurance for six years. All this, including further funds obtained by Smith through Mayfair’s accounts and dummy ledgers produced when the company was under audit, had been hidden from the directors until discrepancies in wine stocks were uncovered earlier this year.
Grant Thornton also said that although all the 2002 en primeur wines bought by Mayfair on behalf of clients had been paid off, the same could not be said of the 2003 vintage, with 105 cases half paid-for and payment of 400 cases still outstanding.
Searle and Mackenzie admitted that negociants, in this case Cordier Mestrezat, Jean-Baptiste Audy and Nathaniel Johnston, ‘cut merchants some slack’ when asking for payments of en primeur. In the case of the 2003 wines, suspicions were only raised earlier this year when one of the negociants contacted Mayfair when Smith was on holiday.