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Former XL Leisure boss Phil Wyatt and his associates "knew exactly what was going on" in transactions leading up to the failure of Goldtrail Travel, the Court of Appeal heard yesterday.
Hilary Stonefrost, QC for Goldtrail liquidator PwC, told the appeal court: "There is abundant evidence the defendants were aware they were involved in transactions that were thoroughly wrong."
Goldtrail went into administration in 2010 owing £33 million.
Wyatt, Magnus Stephensen and Halldor Sigurdarson were found liable for £1.4 million in compensation in 2014 after the High Court ruled they had given "dishonest assistance" to Goldtrail owner Abdulkadir Aydin.
The appeal by the defendants concluded yesterday with their QC David Eaton Turner telling the court his clients had entered into "a sham arrangement" with Aydin which had "come back to haunt them".
He challenged both the finding of the High Court and the size of the payment it awarded.
But Stonefrost argued: "The defendants knew exactly what was going on."
She quoted from email correspondence between the defendants and said: "They don't trust Mr Aydin. He was doing exactly what they were doing. It is a practice they were familiar with."
Referring to payments the defendants made to offshore accounts they helped Aydin set up, Stonefrost argued: "If the defendants were honest they would have paid the money to Goldtrail.
"The £1.4 million should have gone to Goldtrail and it did not."
She said: "There has been a misapplication of Goldtrail monies."
Stonefrost opposed an application by the defendants to submit new evidence, telling the court: "I warn your Lordships to treat this evidence very carefully if you are minded to accept it."
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