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 drin ...

", a group of businessmen who attempted fraudulently to manipulate the share price of the

Guinness Guinness () is a stout that originated in the brewery of Arthur Guinness at Guinness Brewery, St. James's Gate, Dublin, Ireland, in the 18th century. It is now owned by the British-based Multinational corporation, multinational alcoholic bever ...

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 neurodegenerative disease and the cause of 60–70% of cases of dementia. The most common early symptom is difficulty in remembering recent events. As the disease advances, symptoms can include problems wit ...

. He subsequently recovered.

Personal life

He was born Ernest Walter Schleyer in

Austria Austria, formally the Republic of Austria, is a landlocked country in Central Europe, lying in the Eastern Alps. It is a federation of nine Federal states of Austria, states, of which the capital Vienna is the List of largest cities in Aust ...

and moved to the United Kingdom in 1938 when his parents, a

Jewish Jews (, , ), or the Jewish people, are an ethnoreligious group and nation, originating from the Israelites of History of ancient Israel and Judah, ancient Israel and Judah. They also traditionally adhere to Judaism. Jewish ethnicity, rel ...

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 mo ...

. He married Carole Ann Stephing in 1963, and has two sons and one daughter.

Professional life

He had a career in management with Beecham,

Great Universal Stores GUS plc was a 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 Swiss multinational food and drink processing conglomerate corporation headquartered in Vevey, Switzerland. It has been the largest publicly held food company in the world, measured by revenue and other metrics, since 20 ...

before becoming chief executive of

plc (now a part of

Diageo Diageo plc ( ) is a British Multinational corporation, multinational alcoholic beverage company, with its headquarters in London, England. It is a major distributor of Scotch whisky and other spirits and operates from 132 sites around the world ...

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 plc was a leading Scotch whisky company and, at one time, a constituent of the FTSE 100 Index. It was taken over in 1986 by Guinness & Co. and is now part of Diageo. History The Distillers Company origins lie in a trade ...

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 and

Gerald Ronson Sir Gerald Maurice Ronson (born 27 May 1939) is a British businessman, philanthropist, and convicted criminal. In the 1980s, he was one of the Guinness_share-trading_fraud, 'Guinness Four' involved in a trading fraud, for which he served six mo ...

) 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 Scotland, Sco ...

). 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 (ECtHR), also known as the Strasbourg Court, is an international court of the Council of Europe which interprets the European Convention on Human Rights (ECHR). The court hears applications alleging that a co ...

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 Department of Trade and Industry may refer to: Current * Department of Trade and Industry (Isle of Man) * Department of Trade and Industry (Philippines) * Department of Trade, Industry and Competition (South Africa) Former * Department of Trade ...

(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 (; March 6, 1937 – May 20, 2024) was a convicted criminal and an American stock trader who was infamous for his prominent role in an insider trading scandal in the mid-1980s. After getting caught he became a government ...

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 informati ...

, 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 An appellate court, commonly called a court of appeal(s), appeal court, court of second instance or second instance court, is any court of law that is empowered to hear a case upon appeal from a trial court or other lower tribunal. Appellate ...

. A consultant neurologist acting for

the Crown The Crown is a political concept used in Commonwealth realms. Depending on the context used, it generally refers to the entirety of the State (polity), state (or in federal realms, the relevant level of government in that state), the executive ...

, Dr Perkins, said that Saunders was suffering from depression rather than

. 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 He subsequently recovered. 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 ustseek 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 legal costs of £75,000.

Later life

Saunders worked as a business consultant, including advising mobile phone retailer

Carphone Warehouse Carphone Warehouse is 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 Carphone Wareh ...

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 Territories, British Overseas Territory, and the largest by population. The territory comprises the three islands of Grand Cayman, Cayman Brac and Little Cayman, which are located so ...

. 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 ( , ; ; ) is the second-largest List of cities in the Netherlands by province, city in the Netherlands after the national capital of Amsterdam. It is in the Provinces of the Netherlands, province of South Holland, part of the North S ...

Personal life

Professional life

Sentence and appeal

European Court of Human Rights

Later life

See also

References

Further reading