Ernest Walter Saunders (born 21 October 1935) is a British former business manager. He became known in the UK as one of the "
Guinness Four
The Guinness share-trading fraud was a major business scandal of the 1980s. It involved the manipulation of the London stock market to inflate the price of Guinness shares to thereby assist Guinness's £4 billion takeover bid for the Scottish dri ...
", a group of businessmen who attempted fraudulently to manipulate the share price of the
Guinness
Guinness () is an Irish dry stout that originated in the brewery of Arthur Guinness at St. James's Gate, Dublin, Ireland, in 1759. It is one of the most successful alcohol brands worldwide, brewed in almost 50 countries, and available in ove ...
company. He was sentenced to five years' imprisonment, but released after 10 months as he was believed to be suffering from
Alzheimer's disease
Alzheimer's disease (AD) is a neurodegeneration, neurodegenerative disease that usually starts slowly and progressively worsens. It is the cause of 60–70% of cases of dementia. The most common early symptom is difficulty in short-term me ...
.
Personal life
He was born Ernest Walter Schleyer in
Austria
Austria, , bar, Östareich officially the Republic of Austria, is a country in the southern part of Central Europe, lying in the Eastern Alps. It is a federation of nine states, one of which is the capital, Vienna, the most populous ...
and moved to the United Kingdom in 1938 when his parents – a
Jewish
Jews ( he, יְהוּדִים, , ) or Jewish people are an ethnoreligious group and nation originating from the Israelites Israelite origins and kingdom: "The first act in the long drama of Jewish history is the age of the Israelites""The ...
gynaecologist and an Austrian mother – emigrated to escape Nazi rule. He was educated at
Emmanuel College, Cambridge
Emmanuel College is a constituent college of the University of Cambridge. The college was founded in 1584 by Sir Walter Mildmay, Chancellor of the Exchequer to Elizabeth I. The site on which the college sits was once a priory for Dominican mon ...
. He married Carole Ann Stephing in 1963, and has two sons and one daughter.
Professional life
He had a career in management with
Beecham Beecham is a surname. Notable people with the surname include:
* Audrey Beecham (1915–1989), poet and niece of the conductor
* Betty Humby Beecham (1908–1958), British pianist and wife of the conductor
* Earl Beecham (born 1965), American foo ...
,
Great Universal Stores
GUS plc was an FTSE 100 retailing, manufacturing and financial conglomerate based in the United Kingdom. GUS was an abbreviation of Great Universal Stores, the company's name before 2001, while it was also known as the ''Glorious Gussies'' amon ...
and
Nestlé
Nestlé S.A. (; ; ) is a Switzerland, Swiss multinational food and drink processing conglomerate corporation headquartered in Vevey, Vaud, Switzerland. It is the largest publicly held food company in the world, measured by revenue and other me ...
before becoming chief executive of
Guinness
Guinness () is an Irish dry stout that originated in the brewery of Arthur Guinness at St. James's Gate, Dublin, Ireland, in 1759. It is one of the most successful alcohol brands worldwide, brewed in almost 50 countries, and available in ove ...
plc (now a part of
Diageo
Diageo plc () is a Multinational corporation, multinational alcoholic beverage company, with its headquarters in London, England. It operates from 132 sites around the world. It was the world's largest distiller before being overtaken by Kweich ...
plc) in 1981, remaining in the position until 1986. He was renowned for his ruthless cost-cutting efficiency, earning from his employees the sobriquet 'Deadly Ernest'.
Under his charge, early in 1986, Guinness plc launched a friendly takeover bid for Edinburgh-based
Distillers Company
The Distillers Company Limited was a leading Scottish drinks and pharmaceutical company and, at one time, a constituent of the FTSE 100 Index. It was taken over by Guinness & Co. (now part of Diageo) in 1986 in a transaction which was later f ...
plc, which was being stalked by a hostile bidder. This was effected by quietly boosting the Guinness share price. Subsequent to the bid, which resulted in success for Guinness, Saunders was charged (along with
Jack Lyons,
Anthony Parnes
Anthony Keith Parnes (born 1945) is an English ex-stockbroker, who was convicted and jailed with Ernest Saunders, Gerald Ronson, and Jack Lyons (financier), Jack Lyons in the Guinness share-trading fraud of the 1980s; they collectively became kn ...
and
Gerald Ronson
Gerald Maurice Ronson, CBE (born 27 May 1939) is a British business tycoon and philanthropist. He became known in the UK as one of the 'Guinness Four' for his part in the Guinness share-trading fraud of the 1980s as a result of which he was conv ...
) and convicted on 27 August 1990 of counts of conspiracy to contravene section 13(1)(a)(i) of the Prevention of Fraud (Investments) Act 1958, false accounting and theft, in relation to dishonest conduct in a share support operation (see
Guinness share-trading fraud
The Guinness share-trading fraud was a major business scandal of the 1980s. It involved the manipulation of the London stock market to inflate the price of Guinness shares to thereby assist Guinness's £4 billion takeover bid for the Scottish dr ...
). A series of appeals was finally dismissed in December 2002, although a ruling by the
European Court of Human Rights
The European Court of Human Rights (ECHR or ECtHR), also known as the Strasbourg Court, is an international court of the Council of Europe which interprets the European Convention on Human Rights. The court hears applications alleging that a ...
in ''
Saunders v. the United Kingdom'' declared that the defendants were denied a fair trial by being compelled to provide potentially self-incriminatory information to
Department of Trade and Industry (DTI) inspectors which was then used as primary evidence against them. This breached their privilege against self-incrimination.
While there was no suggestion that Saunders himself sought to or actually did profit from these offences in an immediate or direct manner, the allegation was that they were committed to increase the likelihood of their company's takeover bid succeeding. His board of directors at Guinness plc was not informed of, and had not sanctioned, his arrangements, which included indemnities for unknowable amounts. He had passed $100 million to the American
Ivan Boesky
Ivan Frederick Boesky (born March 6, 1937) is a former American stock trader who became infamous for his prominent role in an insider trading scandal that occurred in the United States during the mid-1980s. He was charged and pled guilty to insid ...
to invest shortly before Boesky's prosecution and imprisonment for
insider trading
Insider trading is the trading of a public company's stock or other securities (such as bonds or stock options) based on material, nonpublic information about the company. In various countries, some kinds of trading based on insider information ...
, and following that investigation Saunders' plans were revealed to the DTI in Britain.
Sentence and appeal
Saunders appealed against his prison sentence of five years and three expert witnesses appeared at the
Appeal Court
A court of appeals, also called a court of appeal, appellate court, appeal court, court of second instance or second instance court, is any court of law that is empowered to hear an appeal of a trial court or other lower tribunal. In much of t ...
. A consultant neurologist acting for
the Crown
The Crown is the state in all its aspects within the jurisprudence of the Commonwealth realms and their subdivisions (such as the Crown Dependencies, overseas territories, provinces, or states). Legally ill-defined, the term has different ...
, Dr Perkins, said that Saunders was suffering from depression rather than
Alzheimer's disease
Alzheimer's disease (AD) is a neurodegeneration, neurodegenerative disease that usually starts slowly and progressively worsens. It is the cause of 60–70% of cases of dementia. The most common early symptom is difficulty in short-term me ...
.
One of the other expert witnesses, another neurologist, used brain scans and other evidence to indicate that Saunders's brain was abnormally small for a man of his age, an observation which he said was consistent with a brain disease diagnosis.
[Jeremy Warne]
"Profile: Ernest Saunders; Out of jail and back in business"
''The Independent'', 18 May 1996
On 16 May 1991, the sentence was reduced to two and a half years.
European Court of Human Rights
By a majority of 16-4 the ECtHR found that there was a breach of Article 6. The court rejected the argument of the British government that the complexity of large fraud cases and the public interest in securing a conviction justified the compulsion; the court also rejected the argument that power of a trial judge to exclude admissions was a defence in this case. The court stated that "the public interest cannot be invoked to justify the use of answers compulsorily obtained in a non-judicial investigation to incriminate the accused during the trial proceedings" and "the prosecution in a criminal case
ust UST or Ust may refer to:
Organizations
* UST (company), American digital technology company
* Equatorial Guinea Workers' Union
* Union of Trade Unions of Chad (Union des Syndicats du Tchad)
* United States Television Manufacturing Corp.
* UST Gr ...
seek to prove their case against the accused without resort to evidence obtained through methods of coercion or oppression in defiance of the will of the accused." Saunders was awarded damages of £75,000, which was paid in June 1997.
Later life
Saunders worked as a business consultant, including advising mobile phone retailer
Carphone Warehouse
The Carphone Warehouse Limited was a mobile phone retailer based in London, United Kingdom. In August 2014 the company became a subsidiary of Currys plc (previously named "Dixons Carphone"), which was formed by the merger of its former parent Ca ...
from its early days until prior to its flotation. He was later appointed chairman of the executive committee of a US-based multinational petrol credit-card company, Harpur-Gelco.
Saunders also acted as a consultant to Seed International Ltd, a company based in the
Cayman Islands
The Cayman Islands () is a self-governing British Overseas Territory—the largest by population in the western Caribbean Sea. The territory comprises the three islands of Grand Cayman, Cayman Brac and Little Cayman, which are located to the ...
. Seed offered investments in a variety of fields including wine, property, oil and gas exploration through Ocean International Marketing, their sales subsidiary with offices in
Rotterdam
Rotterdam ( , , , lit. ''The Dam on the River Rotte'') is the second largest city and municipality in the Netherlands. It is in the province of South Holland, part of the North Sea mouth of the Rhine–Meuse–Scheldt delta, via the ''"N ...
.
See also
* ''
Guinness plc v Saunders
''Guinness plc v Saunders'' 989UKHL 2is a UK company law case, regarding the power of the company to pay directors. It required that whatever rules exist for payment in the company's articles, they must be strictly observed.
Facts
Guinness plc ...
''
References
Further reading
* Nick Kochan and
Hugh Pym
Hugh Ruthven Pym (born 18 October 1959) is a British journalist and author. A financial and political journalist by origin, he currently works for BBC News as its health editor.
Early life and education
Hugh Pym was born on 18 October 1959 in ...
– ''The Guinness Affair: Anatomy of a Scandal'' (1987)
* Adrian Milne and James Long – ''Guinness Scandal: Biggest Story in the City's History'' (1990)
* James Saunders – ''Nightmare: Ernest Saunders and the Guinness Affair'' (Arrow Books, 1988)
* Jonathan Guinness – ''Requiem for a Family Business'' (Macmillan 1997).
* Gerald Ronson and Jeffrey Robinson – ''Gerald Ronson – Leading from the Front: My Story: The Gerald Ronson Story'' (2009)
{{DEFAULTSORT:Saunders, Ernest
1935 births
Living people
Alumni of Emmanuel College, Cambridge
20th-century British criminals
Austrian businesspeople
Austrian criminals
Austrian emigrants to the United Kingdom
British people convicted of theft
English businesspeople
English fraudsters
British people convicted of fraud
Emigrants from Austria after the Anschluss
Austrian people of Jewish descent