By Jonathan Stempel
NEWYORK -U.S. authorities on Tuesday introduced prison and civil fees in opposition to the previous head of a now-defunct British firm for making a fraudulent bid to purchase U.S. aerospace and protection firm Textron Inc for about $13.8 billion.
The Division of Justice and the Securities and Change Fee (SEC) mentioned Melville ten Cate and his London-based Xcalibur Aerospace Ltd have been by no means ready to finish a young provide for Textron, together with as a result of they lacked financing.
Prosecutors mentioned ten Cate, 53, a twin U.S.-Dutch citizen now dwelling in Dubai, is at giant. He couldn't instantly be reached for remark.
The defendant was accused of constructing overtures to Textron over practically two years earlier than inserting a Nov. 9, 2020 commercial within the New York Occasions – which he by no means paid for -offering to purchase Textron shares at $60.50 every, a 56% premium.
In keeping with the SEC, ten Cate falsely claimed on Xcalibur’s web site to have lined up $11 billion in financing, and in an interview with the regulator’s employees lied in regards to the financing and his firm’s means to finish the tender provide.
Xcalibur claimed to have produce high-speed unmanned plane methods.
Shares of Textron rose as a lot 15.9% after the tender provide, which the Windfall, Rhode Island-based maker of Beechcraft and Cessna enterprise jets dismissed as “fictitious.” Textron reported having 228.9 million shares on the time.
The Justice Division individually accused ten Cate of attempting to defraud banks and traders out of $500 million by inflating Xcalibur’s financials and prospects, and saying the corporate had practically 9.8 billion British kilos ($12.8 billion) in money.
“Fraudsters discuss massive and hope nobody seems too intently on the backside line,” U.S. Lawyer Damian Williams in Manhattan mentioned in a press release.
The Justice Division charged ten Cate with tender provide fraud, securities fraud and two counts of wire fraud. Every rely carries a most 20-year jail time period.
The SEC filed associated civil fees and is searching for a high quality. Each circumstances have been filed in Manhattan federal court docket.
A British court docket put Xcalibur into liquidation final July, the U.S. authorities mentioned.
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