Flotation cash 'used to buy mansion'

CASH raised from the flotation of collapsed trade finance group Versailles on the Alternative Investment Market in 1995 was fraudulently used to help buy a luxury London mansion for the firm's founder Carl Cushnie, Southwark Crown Court heard today.

A sum of £785,000 was put into a secret account and used to help fund Cushnie's purchase of Ellington Lodge, Kingston, Surrey, prosecuting QC Anthony Evans told the court.

He also alleged that Cushnie diverted a further £30,391 from the share sale to pay building firm Slog It for work on another property at Richmond, Surrey.

Cushnie, who denies charges of conspiracy to defraud, is also alleged to have diverted thousands of pounds to his son.

Cushnie, who is accused of falsifying the firm's accounts to inflate its value, was on paper worth £350m as shares in his firm soared. It collapsed in 1999 after a the Department of Trade and Industry began an inquiry into the business.

The case continues.