Carlton Cushnie was getting noticed in the City as a seemingly successful trade finance businessman. The company, he created, Versailles plc, together with business partner Frederick Clough, grew rapidly and during 1999 its value trebled to £600 million.
Versailles, a FTSE 250 company was promoted as a short-term bridging finance service for cash poor, perhaps small, companies. This was to enable them to buy materials to produce goods for orders from larger, perhaps blue chip, companies, i.e. secure payers, or so Versailles claimed.
Investors, creditors and banks became attracted to providing finance to a seemingly highly profitable venture. But by the end of 1999 Versailles stock exchange listing was suspended. The Versailles bubble had burst. Its shares had become virtually worthless.
The DTI, acting on a tip off had already discretely started to examine Versailles turnover calculations and in early 2000 an SFO investigation was launched. The culmination was that in 2004 Cushnie, convicted by a jury, was jailed for six years, as was Clough who admitted a number of offences. Confiscation orders were made amounting to £24 million.