Thank you for your letters of 7 and 8 July. This is an interim reply as you requested to your questions relating to Central and Sheerwood. I take your points in order:

(ii)  There was no contract of employment and I had no expectation of any remuneration until the very end of 1990 following a Board decision;

(iii)  The Board resolution states the reasons for the payment [Annex A]. You will note these relate exclusively to Central and Sheerwood and in particular to the two engineering companies—Coventry Apex and A L Dunn. Holcombe Holdings was the holding company within Central and Sheerwood that owned these two companies;

(iv)  The answer to this point is evident from the answer to point (ii) above. There is no reference to any other services and this was precisely because there was no link.

Since our last telephone conversation I have reflected on the possibility that the Committee would not wish to incur the cost of an Arthur Andersen investigation into the accounts of Pergamon. If that were to be the case then I would feel compelled to commission the work myself. I am simply not prepared to have any doubt hanging over the situation. The report can be commissioned by you and made to you. AA would owe no obligation or allegiance to me and this would be made clear to them by you.

I am urgently pursuing with Coopers the other point raised in your letter of 8 July. As soon as I have their report I will forward it to you [Annex B].

9 July 1998