We act for Geoffrey Robinson. We have been consulted in connection with an article appearing on the front page of The Sunday Times of 7 December 1997.

  The article was entitled `Robinson's Bermuda Tax Haven'. It went on to describe, inaccurately, a transaction involving his shares in Latchuser Ltd and the International Trust Company of Bermuda.

  We are instructed that the key facts are these:-

1.  Mr Geoffrey Robinson has never had any money, shares or any assets in Trust or otherwise held in Bermuda;

2.  Neither Mr Robinson, nor his wife nor children are or have ever been beneficiaries of any Trust in Bermuda or in any way connected with such a Trust.

3.  Mr Robinson did sell shares in Latchuser Limited but he sold them in the UK and was subject to taxes on them in the normal way. There was no avoidance of UK tax.

4.  Mr Robinson's statement of 29 November is wholly accurate.

The details are as follows:-

5.  Mr Robinson agreed to sell his shares in Latchuser Ltd for a total consideration of £262,523 to his brother Noel. Noel and his brother Peter Robinson wanted to consolidate the ownership of Latchuser Ltd, a UK registered property holding company, by buying out the minority shareholders. It was also Geoffrey Robinson's brothers who requested that Geoffrey Robinson sell to the International Trust Company of Bermuda and Maxwell Quinn (a lawyer and Trustee) as Trustees for the Emily Jane Trust, the Watch Hill Trust and the Nu Start Trust. These trusts were set up by Noel Robinson, Peter Robinson and Peter's daughter Emily.

6.  Neither Mr Geoffrey Robinson, nor his wife, nor his children, are or ever have been beneficiaries under these Trusts or in any other way connected with them.

7.  Noel, Peter and Emily Robinson were at the time of the sale by Mr Robinson (April 1991) and remain non-resident for UK tax purposes.

8.  On selling the shares, Mr Geoffrey Robinson incurred a UK capital gains tax liability which was dealt with in the normal way. There was no UK tax avoidance involved.

9.  The announced changes (in 1991) to the tax treatment of offshore trusts could not have had, and did not have, any consequence for Geoffrey Robinson's tax position in relation to this transaction.

10.  Save for his interest as a discretionary beneficiary of the Orion Trust, Mr Robinson has no interest in any overseas Trusts.

  The article constitutes a most serious libel of Mr Robinson, most particularly in the suggestion that he used a Bermuda Trust as a tax avoidance vehicle for his own benefit.

  Our client requires you, therefore, to publish an apology, to be published with the same prominence in all respects as the original piece on the front page of the Sunday Times on 14 December 1997, correcting these false and defamatory statements (as the Code requires you to do anyway) the terms of which should be agreed with us in advance of publication.

  Further, apart from reserving all of his rights and remedies in relation to the piece of 7 December, if you persist in publishing ill-informed and defamatory statements concerning our client, he will launch libel proceedings against you without further warning.

8 December 1997

  We act for Mr Geoffrey Robinson MP and have been consulted by our client in connection with your piece of 7 December written by Michael Gillard under the headline `Robinson Faces Further Offshore Trust Questions'.

  The article claimed that Orion Trust brought nearly £3 million of shares in TransTec after Mr Robinson became Paymaster General in May and asserted that Mr Robinson's statement of 29 November 1997, that he was linked to Orion only as a discretionary beneficiary, was untrue.

  Your article then proceeded thus:-

  "The Stenbell Accounts also reveal another type of tax efficient trust, the Geoffrey Robinson Personal Settlement".

  "Tax experts say this year's £3 million purchase of shares in TransTec raises serious questions about the independence of Orion's trustees ... and his [Mr Robinson's] ability to influence their decisions".

  "In his statement a week ago, he indicated no mention of the £3 million post-election transaction".

In fact, Mr Robinson's statement was and remains entirely accurate.

  First, the Geoffrey Robinson personal settlement is not `another type of tax efficient trust'. It is the name of the UK blind trust created by Mr Robinson on his becoming a minister totally in line with ministerial procedures and the advice which he received from the Permanent Secretary. Mr Robinson pays tax on the income and gains of the blind trust in the normal way.

  Second, you claim that Mr Robinson's statement of 29 November was untrue because he was in some way involved in the transfer of TransTec shares to the Orion trust. Your claim is unfounded:

(a)  Mr Robinson did not own the shares

(b)  he has never owned them

(c)  he does not own them now

(d)  he was not involved in the transaction.

  The facts, as we are instructed are these:-

1.  In early 1997 the Trustees of the Orion Trust were informed that 2.95 million TransTec shares that should have been settled in the trust by the non-resident settlor had not been so settled. Accordingly our client understands that a Deed of Addition was entered into on 30 April 1997 whereby the beneficial interest in those TransTec shares were transferred to the Trustees of the Orion Trust. The form of transfers themselves did not take place until after May 1997 at which time the legal interest in the shares were transferred to the trustees (the beneficial interest having already been transferred before that time).

2.  At no time were the shares so transferred owned by Mr Robinson, nor did he have anything other than a contingent interest in them as a discretionary beneficiary in the Orion Trust.

3.  The transfer of the TransTec shares to the trustees of Orion did not involve our client and were at the behest of the trustees and the non resident settlor.

4.  Our client did not appoint the trustees of the Orion Trust who act entirely independently of him and are not controlled, or their decisions influenced, by him in any way; the trustees of Orion make their own decisions.

  You will gather therefore that the article constitutes a most serious libel of Mr Robinson. Our client requires you to publish an apology, to be published with the same prominence in all respects as the original piece, on the front page of the Observer on 14 December 1997, correcting the false and defamatory statements contained in your piece (as the Code requires you to do anyway), the terms of which should be agreed with us in advance of publication.

  Further, apart from reserving all of his rights and remedies in relation to the piece of 7 December, if you persist in publishing ill-informed and defamatory statements concerning our client, he will launch libel proceedings against you without further warning.

8 December 1997

  It is well known I have substantial business interests. On being appointed a Minister, in line with the past practice of businessmen in Government, I sought the usual advice.

  I have received and continue to receive much media interest in my financial position, including an enquiry this weekend which convinces me that there is a danger of misrepresentation. I am therefore making this statement today.

  All my beneficial interests were declared in line with the Cabinet Office Ministerial Code and placed in a blind trust on May 7th. The blind trust was drawn up by my solicitors, Titmuss Sainer Dechert and with advice from, as is established procedure, the Treasury's Permanent Secretary. I also informed him that I was a discretionary beneficiary under a trust established for my family. After advice from the Permanent Secretary and Titmuss Sainer Dechert I decided in accordance with their advice that there was no need to include this in the blind trust arrangements since I was a discretionary beneficiary.

  This trust, the Orion Trust, registered in Guernsey, was an offshore trust created by Madame Bourgeois a long standing family friend for 20 years. She was a frequent visitor to our home and regularly spent Christmas and new year with me and my family. She died in 1994. Madam Bourgeois was a Belgian National, resident in Switzerland. Therefore there was no, nor could there have been any UK tax avoidance. Moreover, at no time have I transferred capital or other assets into the Orion Trust for tax or any other purpose.

  The blind trust I set up on May 7th includes all my beneficial interests. They include nearly £18 million of shares in TransTec PLC, the company I founded in 1981. All tax is paid on dividends received from these shares and, of course, income tax was paid on my salary when I was Chairman of TransTec. The rights that arose for me from the TransTec rights issue in 1996 were bought by Orion Trust from Stenbell Limited, a company owned by me and to which I had sold them. These transactions were at the then market value and the transaction between Orion and Stenbell was on an arms length basis. I was advised by my lawyers and Wilder Coe my accountants, that this was a correct procedure. The capital gain for which I am liable will be taxed in the normal manner.

29 November 1997