Versailles chief's fall from grace

CARL Cushnie was once lauded as a leading light of the Afro-Caribbean business community and held up by Tony Blair as a role model for aspiring entrepreneurs. Now the reputation of the 53-year-old businessman lies in tatters. The former tycoon faces jail over his part in one of the UK's biggest accountancy scams.

Cushnie, who was chairman and chief executive of trade finance group Versailles, became a business star after apparently building it into one of the greatest success stories of the Nineties.

But the truth was that the impressive figures were nothing more than smoke and mirrors.

Despite the appearance of increasing riches, it never made a penny in profit. Instead, investigators found a mountain of forged paperwork.

The Versailles case, which has sent shockwaves through the financial establishment, is a rare victory for the Serious Fraud Office, nicknamed the Serious Farce Office after losing several high-profile cases. The costs of the investigation, begun in 1999, and the legal proceedings tot up to an estimated £1.25m.

Cushnie maintained his innocence throughout, claiming he was the dupe of dishonest finance director Fred Clough. But the jury at Southwark Crown Court in London did not see it that way.

They cleared him of involvement in the fraudulent operation of the main Versailles Group, but found him guilty of a similar count concerning offshoot company Versailles Traders Ltd between 1992 and 2000. Reported sales at VTL were dramatically higher than the reality, as our table shows on the right.

He will remain on bail - with a £1m surety from his wife secured on the family home, plus another £300,000 from the couple's son - until sentencing on 8 June. He will learn his fate along with Clough, who pleaded guilty and turned prosecution witness.

The verdict will come as a bitter blow to Cushnie, who had hoped to start his career afresh. After the jury retired, he told the Mail: 'I want to rebuild my reputation. I'm already looking at a couple of business opportunities.'

A comeback by Cushnie is unlikely to be on the cards any time soon.

His current low fortunes are a far cry from Versailles' apparent glory days, when it seemed to be making millions of pounds providing bridging finance to small businesses, including fashion and engineering suppliers.

With the company riding high, Cushnie, who is married with four grown-up children, had amassed personal wealth estimated at £300m on paper. He professed to shun the limelight, prompting the media to dub him 'the black Howard Hughes' because he never gave interviews. For a while he featured on lists of the elite 100 wealthiest Britons.

Originally from Kingston, Jamaica, Cushnie set up home in Kingston-upon-Thames in Surrey, and soon found himself feted by New Labour.

Despite his self-proclaimed reclusive tendencies, he appeared in party political broadcasts for European elections.

He was a director of the Royal Commonwealth Society and was invited to sit with Princess Anne on the fund-raising committee of Save the Children. His acquisition of Pride, a magazine for black women, garnered further publicity.

These glittering appearances could not have been in starker contrast with yesterday's appearance in a grim South London courtroom. As the jury foreman delivered the verdict on the second-charge, he leant face down on the desk in despair.

Cushnie was found guilty of conspiring to defraud wealthy private investors. These 'Traders' as they were known, lost a total of £23m.

He was cleared of blame for £70m of losses by banks, and of defrauding the Stock Exchange and shareholders.

It had all looked so promising when Versailles made its debut on the Alternative Investment Market in 1995. By the time it was suspended in December 1999, the company's market value soared to £630m. A month later, it was placed in receivership and is now worthless.

As had finally become apparent, Versailles' success was a mirage.

Clough, the finance director, who had already pleaded guilty to two counts of conspiracy to defraud, had been fiddling the figures for more than a decade. The 66-year-old struck-off accountant stole £19m which he lavished on a highrolling-lifestyle. Investigators have recovered less than £1m.

As well as being exposed as a man with an expensive taste for the company of young black women, Clough, according to Cushnie, even feigned prostate cancer as an excuse for missing the deadline for filing accounts. Cushnie said: 'He'd ring me up and ask me if I realised how painful the treatment was. I'd cross my legs and tell him to take the rest of the day off.'

Clough may have been the lynchpin of the fraud. But Carl Cushnie will no doubt now be contemplating his own descent from Tony Blair's model businessman to just another disgraced director.

Versailles' hall of mirrors