How was this new company created? Answer: With 50,000 pounds borrowed by Raymond Keene and Donald Morris from a rival company in which they are both directors and shareholders. Keene is an International Grandmaster and the chess correspondent of "the Times", "The Sunday Times", and "The Spectator".
The 'loan" was transferred on December 14th 1999 from the bank account of London based company Mind Sports Olympiad Ltd. of which Keene is the CEO and Morris is the commercial director. The instructions, signed by Keene and Morris, direct the Company's bankers (Midland Bank) to transfer £ 50,000 to Bank Cantrade in Switzerland, for the benefit of a Swiss Company called Giloberg Finance Ltd. Keene has admitted that the money was used to set up the company now called Brain Games Network PLC. As further proof of the money transfer see the attached bank statement of Mind Sports Olympiad Ltd., showing the £ 50,000 paid out to Giloberg Finance Ltd. on 14th December.
These are the bare facts of the situation. The following open letter to Keene from his long time friend (now ex-friend) David Levy provides the background.
by David Levy
We have known each other for 37 years. We have collaborated in various commercial ventures for 30 of those years. We have organized two world chess championships together, two man vs. machine world checkers championships, three Mind Sports Olympiads and several other events. We have written more than a dozen books together. Over the years I have stood by you loyally, giving you moral support when others attacked your reputation. We have shared many birthdays together. You are the uncle of my children and I of your son. Yet all of this obviously means nothing to you when you see a possibility based on selfish greed. Have you really reached a point in your life when nothing is more important than making money, not caring how you make it or who you hurt in the process.
Although the original idea for the Mind Sports Olympiad was mine, I came to you in 1986 and invited you to join me in making it a reality. After a while, we invited your friend Tony Buzan to join us. The road to the launch of the event was a long one and along the way you invited your friends, and people who were to become your friends, to join our venture. Sir Brian and Lady Mary Tovey, Don Morris, Lord Hardinge.
In addition, and at Don's instigation, you brought Bob Bishop into the company we had formed, Mind Sports Olympiad Ltd. Bob came in as an investor, as did Philip Bond who you persuaded to make an investment as recently as August of last year. We all thought that we were your friends. We all trusted you. We made you the CEO of our company. You were our hero.
Last summer we in Mind Sports Olympiad Ltd. formed a joint venture with a Swedish consortium. The joint venture is Mind Sports Organization Worldwide Ltd. Through our shareholdings in Mind Sports Olympiad Ltd. each of us is, in effect, a shareholder in Mind Sports Organization Worldwide Ltd. Your role in the whole structure has always been to promote and publicize our activities and to create financial opportunities for us, both of which you have done very well, until late last year.
You are a director of both companies and, as such, you have a fiduciary duty to both companies, as well as legal obligations because of our shareholders arrangements.
What we have all built together and the efforts and sacrifices we have all made along the way - none of this means anything to you when you see an opportunity to enrich yourself.
For more than a half year our company has been trying, through your own efforts, to raise money for a World Chess Championship match. In the 4th quarter of last year I worked with you on various budget and proposal documents for potential sponsors. I went to a couple of meetings with you, I met with Gary Kasparov and discussed the company's plans to find the sponsorship for a match against a human challenger in October 2000 followed by a match against a computer in 2001. All of us in both of our Mind Sports companies thought that you were working diligently, on our behalf, to raise the necessary money. That is what we fervently believed.
But you and Don Morris had an entirely different idea. You decided to set up a new company in which the two of you would have shareholdings but not the rest of us. You decided that to provide the 50,000 pounds needed to set up that company, rather than to use your own money you would use ours - the money in the bank account of Mind Sports Olympiad Ltd. And why not? After all, the bank statements are sent only to your house and no-one else in the company sees them because we all trust you.
After you had "borrowed" the company's money you continued to pretend that your efforts to secure sponsorship for the world chess championship were being made on behalf of our business, but all along they were being made on behalf of your business. And all during this time you were being paid 10,000 pounds per month to work for our company.
You told no-one else in Mind Sports Olympiad Ltd. or Mind Sports Organization Worldwide Ltd. what you were doing. Until March 6th, none of us had a clue. Then "The Times" published an article in its computer section, "Interface", which gave the game away. At first you tried too deny that most of the article was true. When Lady Mary Tovey, your good friend of several years, rang your home and spoke to Annette, Mary was told: "Don't worry darling. It isn't true. There is no company." Had you lied to your own wife or had you asked her to lie for you?
As the truth came out, bit by horrible bit, we learned that the only inaccuracy in the article was the date of the press conference, given as April 4th when it should have been April 5th. You and Don had indeed set up a company in which each of you had, by your own admission, £900,000 worth of shares, shares, but none for us. Within a week we had been sent a few pages of the company's prospectus which, you subsequently told me, had been used to raise £3 million from investors. In that document, you and Don stated that you were " ... not aware of any other companies which broadly specialize on organizing and commercializing events and Internet-based competitions in the games." [The games listed are chess, draughts, Chinese chess, go and Japanese chess.]
What on Earth do you mean by saying you were "not aware". Had you both forgotten about the existence of our companies? And how can you have the audacity to lie like that in a document used to raise millions of pounds from investors? Do you have no moral qualms at all, and no respect for the law?
When confronted with the truth you tried several times to claim that you had done all this in the best interest of our companies. But the prospectus for your new company clearly states plans which make it a direct rival of ours. And if you were acting in the interests of our companies how is it that you and Don own shares but we do not? If you had any regard whatsoever for the interests of your friends and fellow shareholders in our company, would you not have put whatever shares were available into the name of our company instead of your names?
Once the cat was out of the bag on March 6th, you realized that it would only be a matter of time before your "loan" of £50,000 of the company's money was discovered. So on March 8th you, Raymond, deposited £50,000 in the company's bank account. (Bank statement attached). Covering your tracks? Putting things right? But it isn't quite that simple. What do you and Don claim you were doing with the company's money - borrowing it? If so, you have both committed an offense under section 330 of the Companies' Act, for which the penalty is a fine, or imprisonment, or both! And if you were not borrowing the money, how would you describe its removal from the company's account? An accident? An act of God? Presumably the police will be able to tell us.
So what happens Raymond? How can you ever look any of us in the eye? How can you possible expect forgiveness from those ex-friends and partners who you have so neatly stabbed in the back. And how do I tell my children that their only uncle, who they both revere, has behaved in this way?
You say that your new company will make you and Don into multi-millionaires very quickly. Will it be worth the price?
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