David Levy on the Brain Games Scandal, 2000-2003

How Could You Do This Raymond? An open letter to Raymond Keene
4 April 2000

Raymond Keene and a Matter of £50,000 – The Full Truth Emerges
8 August 2001

Is Fraud a Brain Game?
6 January 2002

A ‘Pump-and-Dump’ Fraud from Brain Games
21 November 2003

How Could You Do This Raymond?

An open letter to Raymond Keene

[First published on 4 April 2000 on the website www.ishipress.com]


We have known each other for 37 years. We have collaborated in various commercial ventures for 30 of those years. We have organized two world chess championships together, two man vs. machine world checkers championships, three Mind Sports Olympiads and several other events. We have written more than a dozen books together. Over the years I have stood by you loyally, giving you moral support when others attacked your reputation. We have shared many birthdays together. You are the uncle of my children and I of your son. Yet all of this obviously means nothing to you when you see a possibility based on selfish greed. Have you really reached a point in your life when nothing is more important than making money, not caring how you make it or who you hurt in the process.

Although the original idea for the Mind Sports Olympiad was mine, I came to you in 1986 and invited you to join me in making it a reality. After a while, we invited your friend Tony Buzan to join us. The road to the launch of the event was a long one and along the way you invited your friends, and people who were to become your friends, to join our venture. Sir Brian and Lady Mary Tovey, Don Morris, Lord Hardinge.

In addition, and at Don’s instigation, you brought Bob Bishop into the company we had formed, Mind Sports Olympiad Ltd. Bob came in as an investor, as did Philip Bond who you persuaded to make an investment as recently as August of last year. We all thought that we were your friends. We all trusted you. We made you the CEO of our company. You were our hero.

Last summer we in Mind Sports Olympiad Ltd. formed a joint venture with a Swedish consortium. The joint venture is Mind Sports Organization Worldwide Ltd. Through our shareholdings in Mind Sports Olympiad Ltd. each of us is, in effect, a shareholder in Mind Sports Organization Worldwide Ltd. Your role in the whole structure has always been to promote and publicize our activities and to create financial opportunities for us, both of which you have done very well, until late last year.

You are a director of both companies and, as such, you have a fiduciary duty to both companies, as well as legal obligations because of our shareholders arrangements.

What we have all built together and the efforts and sacrifices we have all made along the way – none of this means anything to you when you see an opportunity to enrich yourself.

For more than a half year our company has been trying, through your own efforts, to raise money for a World Chess Championship match. In the 4th quarter of last year I worked with you on various budget and proposal documents for potential sponsors. I went to a couple of meetings with you, I met with Gary Kasparov and discussed the company’s plans to find the sponsorship for a match against a human challenger in October 2000 followed by a match against a computer in 2001.

All of us in both of our Mind Sports companies thought that you were working diligently, on our behalf, to raise the necessary money. That is what we fervently believed.

But you and Don Morris had an entirely different idea. You decided to set up a new company in which the two of you would have shareholdings but not the rest of us. You decided that to provide the 50,000 pounds needed to set up that company, rather than to use your own money you would use ours – the money in the bank account of Mind Sports Olympiad Ltd. And why not? After all, the bank statements are sent only to your house and no-one else in the company sees them because we all trust you.

After you had “borrowed” the company’s money you continued to pretend that your efforts to secure sponsorship for the world chess championship were being made on behalf of our business, but all along they were being made on behalf of your business. And all during this time you were being paid 10,000 pounds per month to work for our company.

You told no-one else in Mind Sports Olympiad Ltd. or Mind Sports Organization Worldwide Ltd. what you were doing. Until March 6th, none of us had a clue. Then The Timespublished an article in its computer section, “Interface”, which gave the game away. At first you tried to deny that most of the article was true. When Lady Mary Tovey, your good friend of several years, rang your home and spoke to Annette, Mary was told: “Don’t worry darling. It isn’t true. There is no company.” Had you lied to your own wife or had you asked her to lie for you?

As the truth came out, bit by horrible bit, we learned that the only inaccuracy in the article was the date of the press conference, given as April 4th when it should have been April 5th. You and Don had indeed set up a company in which each of you had, by your own admission, £900,000 worth of shares, shares, but none for us. Within a week we had been sent a few pages of the company’s prospectus which, you subsequently told me, had been used to raise £3 million from investors. In that document, you and Don stated that you were ” … not aware of any other companies which broadly specialize on organizing and commercializing events and Internet-based competitions in the games.” [The games listed are chess, draughts, Chinese chess, go and Japanese chess.] What on Earth do you mean by saying you were “not aware”. Had you both forgotten about the existence of our companies? And how can you have the audacity to lie like that in a document used to raise millions of pounds from investors? Do you have no moral qualms at all, and no respect for the law?

When confronted with the truth you tried several times to claim that you had done all this in the best interest of our companies. But the prospectus for your new company clearly states plans which make it a direct rival of ours. And if you were acting in the interests of our companies how is it that you and Don own shares but we do not? If you had any regard whatsoever for the interests of your friends and fellow shareholders in our company, would you not have put whatever shares were available into the name of our company instead of your names?

Once the cat was out of the bag on March 6th, you realized that it would only be a matter of time before your “loan” of £50,000 of the company’s money was discovered. So on March 8th you, Raymond, deposited £50,000 in the company’s bank account. (Bank statement attached). Covering your tracks? Putting things right? But it isn’t quite that simple. What do you and Don claim you were doing with the company’s money – borrowing it? If so, you have both committed an offense under section 330 of the Companies’ Act, for which the penalty is a fine, or imprisonment, or both! And if you were not borrowing the money, how would you describe its removal from the company’s account? An accident? An act of God? Presumably the police will be able to tell us.

So what happens now Raymond? How can you ever look any of us in the eye? How can you possible expect forgiveness from those ex-friends and partners who you have so neatly stabbed in the back. And how do I tell my children that their only uncle, who they both revere, has behaved in this way?

You say that your new company will make you and Don into multi-millionaires very quickly. Will it be worth the price?


Ray Keene responds to accusations by David Levy

Dear Sam

Thank you for forwarding me this. Of course I never admitted any such thing! I was given full power by the MSO Ltd. board in board minutes of November 8 1999 to take any action on behalf of MSO Ltd. I am CEO Finance Director etc. — I regard myself as having played this strictly by the book in terms of my authority to act.

MSO experienced some difficulties in the latter half of 1999. I refrain from specifying what they were for fear of damaging it in public. David appears to have no qualms in this area.

All my actions – and I have both numerous witnesses and I believe majority board support – were taken with the view of saving MSO. David does not believe this but I have overwhelming evidence.

I have – sadly had to put the matter in the hands of my lawyers. It seems also from early versions of your site yesterday that David has mentioned murder attempts in this context. – That may have been a joke as he subsequently tried to explain to a few people but it does not say joke on the page we printed down.

This matter has become very serious and I would be grateful if you could maintain a balanced tone in your coverage and let the world know that I regard my actions as always having been legal – ethical – covered by board mandate and for the good of MSO. When the full truth emerges I think you will be amazed!! and perhaps a lot more sympathetic to my point of view.

With Very Best Wishes

Ray Keene

Levy responds to the response of Keene

Raymond Keene has claimed that at a Board meeting of Mind Sports Olympiad Ltd held last Saturday (April 8th) he was unanimously exonerated over the use of £50,000 of the company’s money.

A Board meeting was indeed held in London on April 8th. It was called at very short notice (less than 48 hours) and I was unable to attend due to a prior commitment in Paris. In fact I was already in Paris when the meeting was called, but I accept that there were good reasons, unconnected with this issue, for calling a meeting at such short notice.

This issue is one of the matters discussed at the meeting, but no resolution was put to the Board and no vote was taken on this issue.

At the present time there are attempts being made within the company to reconcile this matter in a manner acceptable to all those involved. I shall therefore make no further public comment on the matter unless sorely provoked.

On April 11th Raymond Keene resigned from the Board of Mind Sports Organisation Worldwide Ltd. He remains CEO of Mind Sports Olympiad Ltd.

David Levy

* * * * * * *

Raymond Keene and a Matter of £50,000. The Full Truth Emerges!

[First published on 12 August 2001 on the Inside Chess website and subsequently published on the website www.kasparov.com ]

Editor’s note: The following article originally appeared at the Inside Chess website run by Yasser Seirawan. Sadly, that site is no longer with us. International Master David Levy has worked in and around chess for decades, particularly in the area of computer chess. Raymond Keene is an English Grandmaster, organizer, and a director of Braingames.net (BGN), the company that organized the 10/2000 Kasparov-Kramnik world championship match. Keene is also the chess columnist for the the London newspapers The Times and The Sunday Times.

The Full Truth
The Clouds Gather
Enter “Mr X”
The News Breaks
Mr X Again
My Open Letter to Keene
The Aftermath of the Open Letter
Keene’s Defence and its Refutation
Summary of Chronology



On April 4th last year I published an open letter on the Internet accusing Grandmaster Raymond Keene of using £50,000 of one company’s money to set up a rival company.

In summary, my accusations were based on the fact, undisputed by Keene, that he and a fellow Director of the company Mind Sports Olympiad Ltd (hereafter generally referred to as “MSOL”), in which I am also a Director and a shareholder, sent £50,000 of that company’s money, in secret, to a Swiss bank account.

What is disputed by Keene is the purpose to which that money was put. I accused Keene of using the money to set up a rival company called Brain Games Network Plc (hereafter generally referred to as “Brain Games”), in which he and that same fellow Director, Don Morris, were given shares, but none were given to any of the other Directors or shareholders of MSOL. Keene’s stated position on the use of the £50,000 is that it was paid to someone to whom I shall refer as “Mr X” as a consultancy fee and that he and Morris were entitled to make that payment.

The seriousness of my accusation goes far beyond the misappropriation of funds. The setting up of a rival company in which Keene was and is a leading light had extremely serious repercussions for a joint venture company, Mind Sports Organisation Worldwide Ltd (hereafter generally referred to as “Worldwide”) that was 50% owned by MSOL. It also constituted personal treachery against myself, a close friend of Keene’s for more than 30 years, and against other friends of his.

Keene responded on the same web site as I had published my open letter, denying my accusation, and claiming that, “When the full truth emerges I think you will be amazed”.

I then replied to his response, saying that I would write no more on the subject unless sorely provoked. Since then Keene has repeatedly protested his innocence in the media, including the Internet, which is tantamount to calling me a liar. Furthermore, he has added considerably to this provocation by repeatedly and publicly deriding my attempts to keep Worldwide alive, for a year after his treachery against that company and his desertion of it.

As Keene has not seen fit during the past 16 months or more to reveal “the full truth”, I have done so here. This is prompted in part by some recent postings on the “Chess Café” Web site bulletin board (http://www.chesscafe.com/). One of the postings by Keene on this topic is:

317-39(2) Mr Church’s post: I have never embezzled any money in my life. I am CEO of MSO Ltd and I believe what he is referring to is the occasion when I invested £50,000 of its money in trying to get a world chess championship match going which would benefit MSO Ltd.

Keene’s response here is an interesting slip. His defence (see below) to my accusation that he used the money to set up Brain Games, is that the money was in fact paid for financial advice. In posting 317-39 Keene says that he invested the money “in trying to get a world chess championship match going which would benefit MSO Ltd.” But if he knew at the time he was “investing” the money that the purpose was to get a World Championship match, why did he need to pay Mr X £50,000, as he claims, to be given the advice to do just that?

Other examples of the postings in the same thread on Chess Café include:

317-41 I was very disappointed by Mr Keene’s answer on David Levy’s embezzlement charges because only one of the three paragraphs in his answer has anything to do with my question, and even in that paragraph he has added nothing not already contained in his brief denials of last year.

The point is that in those earlier denials Mr Keene relieved the pressure he was under by promising that there would be dramatic disclosures in his favour later on. He wrote last spring, “When the full truth emerges I think you will be amazed!! and perhaps a lot more sympathetic to my point of view.”

I should like Mr Keene to amaze us now by telling the full truth. Montgomery Church [5-13-01]

317-44 It is amusing to see, how Ray Keene stubbornly refuses on the ChessCafe.com Bulletin Board to give more details on a matter that was brought to public attention one year ago, when it was reported that £50,000 was transferred on December 14th 1999 from the bank account of Mind Sports Olympiad Ltd. The instructions, signed by Keene and Morris, allegedly directed the Company’s bankers (Midland Bank) to transfer £50,000 to Bank Cantrade in Switzerland, for the benefit of a Swiss Company called Giloberg Finance Ltd. (I was not able to find a phone number for Giloberg Finance in Switzerland; does the company actually exist?) Keene has also reportedly admitted that the money was used to set up the company now called Brain Games Network PLC. Gerald Schendel [5-15-01]

317-52 In 317-41 I referred to Keene’s claim last year, on the £50,000 affair, that “When the full truth emerges I think you will be amazed!! and perhaps a lot more sympathetic to my point of view.” I asked for this “full truth” to be revealed.

Keene has replied (317-47) with something wholly unexpected: the “full truth” is simply that he foresaw last year that Mind Sports Organisation Worldwide would eventually go bankrupt. Is that really it? Montgomery Church.


This document represents what I believe to be the definitive account of what happened. Please consider the evidence and chronology very carefully and then ask yourself – who is telling the truth, Keene or Levy?

I have included here Keene’s attempt to rebuff the principal allegation that he used £50,000 of MSOL’s money to set up Brain Games, together with what seems to me to be a very clear refutation. The reader will have to judge whose explanation to believe, mine or Keene’s.


Before examining in detail the setting up of Brain Games it is necessary to give some background, so that the roles of the companies and some of the individuals referred to in this document will be understood.

The annual event known as the Mind Sports Olympiad was an idea of mine originally conceived in the mid-1980s, though it took more than a decade before we were able to achieve the sponsorship necessary to organize the first event. In 1997 Keene and I formed a UK company, MSOL, together with Tony Buzan (who lectures and writes on the human brain), Sir Brian Tovey (formerly Director of GCHQ in Cheltenham – the British Government’s “communications centre”), Lady Mary Tovey and Don Morris (an entrepreneur with an events organizing background). Sir Brian was the founding Chairman of the company, the rest of us were all Directors. A shareholders’ agreement was drawn up by the company’s lawyers and signed by all shareholders. Subsequently we invited others to join the venture, including Lord Hardinge of Penshurst who became Chairman when Sir Brian retired.

The first Mind Sports Olympiad took place at London’s Royal Festival Hall in August 1997 and attracted 2,050 entries. The following year the event was held at the Novotel in Hammersmith, London, where the number of entries increased to 2,370.

Over a period of several months, starting in late 1998, a joint venture agreement was negotiated between the company and a group of investors. A joint venture company was set up in June 1999, owned half by those investors and half by MSOL. A detailed shareholders’ agreement was signed by all the investors and by their two management executives, as well as by those Directors of MSOL who were also to be Directors of the joint venture company. As one of the conditions of signing up to the joint venture the new investors insisted that Keene and I sign individual “Consultancy Deeds” that incorporated requirements that each of us: “use his best endeavours to promote the interests of the Company” [Clause 4.2(d)] Without wishing to appear boastful I think it is true to say that the investors saw Keene and myself as key personnel whose expertise and dedication to the company were absolutely essential if the venture was going to succeed. Keene is unsurpassed at raising sponsorship for chess and other mind sports events, having raised approximately £10 million prior to 1999. He had also been extremely successful at creating publicity for events in which he had a leading role. My own roles in the joint venture were twofold – to put together a team to develop and run what we hoped would be the world’s best mind sports web site ever and to organize the annual Mind Sports Olympiads.

During the first three months of the joint venture Keene drew fees totalling £25,000 from MSOL for his consultancy services performed for Worldwide. Similarly, during the period from October 1999 to February 2000 inclusive he drew fees of £10,000 per month (four of the monthly payments coming from MSOL and one from Worldwide). One might therefore assume that, during the entire period in question, he would have worked to the best of his endeavours on behalf of Worldwide.

Initially the joint venture was set up as an offshore company, incorporated in the Netherlands Antilles, but the venture was quickly brought on-shore and named Mind Sports Organisation Worldwide Ltd (“Worldwide”). To recapitulate briefly, Keene was a director of Worldwide and had a consultancy contract with this company, while still retaining his position as CEO of the UK half of the joint venture, MSOL.

The aims of Worldwide were to develop the web site, to continue to organize the Mind Sports Olympiad and to capitalize on both facets of the business. The investors made available a loan of £1 million as starting capital. Given the booming “dotcom” market it was reasonable at that time to have a business plan that called for more finance early in the life of the company. The Board was led to expect, by one of the original management executives of the company, the influx of substantial sponsorship from various companies with which, he said, he was negotiating. That same executive also led the Board to believe that he was successfully negotiating significant investment finance from a private placement of some of the company’s shares with one of the world’s leading investment banks.

When the joint venture started it was relatively easy to raise money for an Internet venture. From the start the company’s management had a rapid expansion plan because of the perceived necessity for speed to market in order to capture market share.


By the end of August 1999 the web site was up and running (on time and within budget) and the 3rd Mind Sports Olympiad had taken place, attracting a record 4,015 entries, but no sponsorship had been found. It was agreed by the Board early in September 1999 that the company needed more funds and that each partner would provide loans of £500,000, in stages. (The original investors of the joint venture did provide £500,000 in stages up to the end of February 2000 while MSOL provided approximately £318,000.)

From August 1999 onwards Keene was trying, on behalf of Worldwide, to raise sponsorship to pay for the cost of hosting Kasparov’s next defence of his World Chess Championship title in London. I was helping Keene but this was very much his area of expertise and my role was one of support. I worked on some proposal and budget documents with Keene, joined him at one or two meetings with a potential sponsor, and met Kasparov for lunch on November 17th during which he said that, if the money could be found, he would happily defend his title, in London, in October 2000, with Worldwide as the match organizers.

On November 8th 1999 a Board meeting of MSOL took place at which a seemingly innocuous matter was raised by Don Morris, that company’s Commercial Director. Morris pointed out that Keene, as CEO, was being slowed down in his activities on behalf of the company by the feeling that he needed to consult the Board before taking important decisions. Keene was held in high regard by the Board at that time and so a motion was proposed by the Chairman, Lord Hardinge of Penshurst, which I quote from the minutes of the meeting:

“…whereby Raymond Keene should be given full authority to act on behalf of the Company as he saw fit without recourse to all members of the Board. This motion was passed unanimously and RK was thus given full power to act accordingly.” [The underlining is mine – DL]

It is important to note that the powers given to Keene by that mandate were given by the Board and related to decisions that would or might normally be made by the Board. These powers do not in any way override the provisions of the shareholders’ agreement of the company, which require a “Special Majority Approval” of the shareholders, i.e. a 60% majority vote, for many types of transaction (clause 5.1 of the shareholders agreement). The significance of this difference will become apparent later.

In November 1999 it was discovered that the management executive who had claimed to be well advanced in his attempts to raise investment funds had been systematically lying to the shareholders and directors about his sponsorship and investment negotiations on behalf of Worldwide. At the end of that month he was summarily fired. Soon afterwards the company sought the help of a major European Internet consultancy who were given the task of developing a viable business plan that would take advantage of the still booming “dotcom” market. Their plan contained some good ideas but was rejected as being much too expensive to implement.


At Keene’s instigation a breakfast meeting took place in the fashionable Mayfair district of London on December 2nd 1999 with someone to whom I shall refer as “Mr X”, a man who had been introduced by Keene as a long time friend of Don Morris and someone with whom Keene had dealt some 13 years previously. Keene explained when proposing the meeting that Mr X is a “financial genius” who had an idea for “making us all into multi-millionaires”. Present at the meeting from Worldwide’s side were Keene, myself, one of MSOL’s investors and the co-ordinator of Worldwide’s investment group.

Mr X arrived at the meeting with the following written proposal (reproduced here verbatim):

* Form Newco Plc. In the first instance this will be a UK Plc

* Distribute founder shares pro-rata between existing shareholders that reflect shareholdings in both companies

* Shareholders who have put in cash should receive the same amount of shares again i.e. diluting founders

* Create a new, streamlined board

* Structure an exit via a bid from my group

* My group will float on a European exchange by March/April 2000 and raise a minimum of $5m capital for the MSO division to move forward.

The essence of Mr X’s idea was this: The company he was proposing we set up (“Newco Plc”) should be a “Plc” (public company) rather than a “Ltd” (private company) so that a stock market flotation would be quicker and cheaper to achieve. He explained that the cost of setting up a new Plc included a legal requirement for £50,000 – yes £50,000. Newco Plc would take over three existing “Ltd” companies, one of which was to be Worldwide. No money would be paid for the takeover – instead Worldwide’s shareholders would own 20% of Newco Plc, as would each of the other two companies similarly acquired. Mr X would then arrange the flotation of Newco Plc on the Athens stock market and guarantee that, following the flotation, Worldwide would receive $5 million to use as we pleased for developing the business.

When I asked Mr X about the other two companies he was intending to bring into Newco Plc he responded that he had not yet started to look for them – we were the first. When I asked Mr X how the $5 million “guarantee” would be underwritten he said that it would not exactly be underwritten but would instead be guaranteed by his Swiss company. When I asked what we could find out about his Swiss company he said that we wouldn’t be able to find out anything.

With this proposal Mr X was asking us to part with the entire value built out of the £1.4 million (approximately) that had already been invested in the venture, in return for a guarantee from his Swiss company about which we could learn nothing. It is hardly surprising that Worldwide rejected Mr X’s offer, despite Keene’s enthusiasm for accepting it.

When we rejected the offer Keene said that he would stay in contact with Mr X. Don Morris explained this continued contact in a fax to me on December 12th 1999, which he copied to all the other Directors and shareholders of MSOL: “Raymond is doing what he can to keep the possibility of some sort of deal with this group open for a while longer.” Remember the date of this fax – December 12th.


On the afternoon of February 17th 2000 Keene arrived in Worldwide’s office beaming from ear to ear. Lady Mary Tovey and I were there and he told us that he had just agreed a deal with KPMG, with whom we knew he had been negotiating for some time. The deal would solve all of our company’s concerns about future financing, cover the cost of the Olympiad, pay for the next World Chess Championship match and “make us all into multi-millionaires”. In the early evening the three of us went to Blakes Hotel in South Kensington where two of the investors were staying. We were joined by Sir Brian Tovey and that evening the champagne flowed. Keene was very much the hero of the hour. He even told us that he had Kasparov’s signature on a contract, agreeing to play the World Championship match.

Within a couple of weeks the KPMG “deal” appeared to have stalled.

At the end of February 2000 the original investors of the joint venture provided the final £120,000 of the £500,000 loan agreed in September. Only a few days later, on March 6th 2000, an article appeared in the “Interface” section of “The Times” announcing a new web site called “Braingames.net” and, by implication, a new company to operate it. The article stated that the site is: “…run partly by Raymond Keene, this paper’s chess correspondent. It aims to be the world’s centre for “brain games” – chess, Chinese chess, Japanese chess, draughts and Go.”

The article described some of the new venture’s planned activities:

“For the first time ever you will be able to compare just how good you are in relation to the Grandmasters – on the official rankings. To that end, Braingames has signed exclusive five year deals with Garry Kasparov, the World Chess Champion, Vishwanathan Anand, the chess number two and Ron King, the World Draughts Champion, and will be hosting the World Championships in every one of the Braingames.”

I read the article at 8am and immediately telephoned Keene in utter amazement. I couldn’t believe it. I was sure that somehow a journalist had got the wrong end of a stick. Keene’s reaction surprised me. “Oh shit!” he exclaimed. “I was hoping that it wouldn’t come out yet.” He tried to play down the significance of the proclaimed Web site and claimed that setting up Brain Games was something Mr X had done and which Keene believed would be “very good for MSO”. After a short while he said that he had to cut our conversation short and speak to someone else.

A few hours later the Tovey household, which also takes “The Times”, read the same article. Lady Mary Tovey tried immediately to telephone Keene but he was out and Lady Mary spoke to his wife, Annette, who told her: “Don’t worry darling. It isn’t true. There is no new company.”

Clearly panicked, Keene sent me a 3-page fax later that day which includes the following statement, (reproduced completely in upper case as was Keene’s style when sending faxes). On page 2, point 8:


And in the final paragraph on page 3:


The question we must now ask ourselves is this. Was the creation of the Brain Games venture a new opportunity, set up some time after February 17th, and created only because the KPMG deal had been lost?

No it was not. A quick examination of a register of web site owners that day (http://www.register.com/) revealed that http://www.braingames.net/ had been registered as long ago as December 14th 1999. December 14th? What a coincidence! Just two days after Don Morris’ fax from which I quote above. Remember that date, December 14th, because it appears again with great significance later in this account.

As one would expect, our original investors were equally astounded at the news and extremely angry at Keene. They had by now invested £1.5 million (approximately $2.25 million at that time) partly or largely on the basis of their faith in Keene and myself. Now they had learned that one of their two key consultants, the one with the money raising skills, had been working to set up a rival company. I discussed the situation with some of the investors and with two Directors of both MSO companies, all of whom were aghast at what we had learned.

I decided to take legal advice and a meeting was arranged with counsel. The advice we were given did not encourage us to litigate. Counsel advised us that the shareholders’ agreement for Worldwide prevented the company from taking any legal action (other than for the recovery of trade debts) without the agreement of both shareholders – i.e. both the investor group and the original UK company, MSOL. Keene was CEO of the latter company and, through his links with Morris and his friendships with some of the other shareholders, he exercises what, in effect, is a blocking vote, so there was no hope of getting agreement between the shareholders of Worldwide for taking legal action against Keene and Morris. Furthermore, counsel advised, there would be no point in seeking damages in court until we could prove that Brain Games had made money which we, in Worldwide, would have expected to have been made by our company had Keene not acted as he had done.


Not knowing about the legal discussions which were then in progress, Keene suggested that I meet with Mr X. Keene told me that Mr X, the man behind braingames.net, had a plan to help Worldwide which, by then, had mounting trade debts. A meeting was arranged for the morning of March 11th at the London Hilton in Park Lane.

When I arrived for that meeting the first thing Mr X said to me was that he hoped “… you will join us” and that Keene had told him that he regarded me as an essential part of the organisation. Mr X’s offer was that his Swiss company, Giloberg Finance Ltd, would pay £250,000 in cash plus £1,750,000 in shares in Brain Games to purchase all the assets of Worldwide. The £250,000 would wipe out our trade debts and the £1,750,000 in shares would ensure that “we will soon be multi-millionaires” (Keene’s words). I would be given stock options. I would be retained on a salary. I would be put in charge of the organisation of the World Chess Championship match and all the other world championships they were planning. Mr X said that they had already raised £3 million. Mr X also said that he had a meeting scheduled on March 20th with someone from Lehman Brothers’ New York office with whom he had a “virtually done deal” to invest between £5 million and £8 million in Brain Games, thereby immediately multiplying the value of our shares if we accepted his offer. There would then be a share split in April and an IPO in May/June.

I explained to Mr X that I did not feel our Board and our investors would like his offer. He suggested that I present it as the only way for our company to avoid liquidation and that, as such, the Board would have little option but to accept. I told Mr X that, before putting his offer to our Board, I would need to see some sort of business plan and tentatively arranged to meet with him again on the following Thursday. A few hours after the meeting ended Mr X sent me an e-mail, attaching “a section of the PPM” [Private Placement Memorandum – the document used to raise the £3 million from the investors in Brain Games Network Plc– DL.]

The 4 pages of the PPM that Mr X sent me available upon request

The most surprising part of Mr X’s attachment is the fourth paragraph of the “Background” section: “The directors are not aware of other companies which broadly specialize in organizing and commercializing events and Internet-based competitions in the Games.” Earlier in the same section “the Games” are defined to include “Chess, Draughts, Chinese Chess, Go, Xiang Qi and Japanese Chess”, and the directors who were “not aware” included Keene and Morris, CEO and Commercial Director respectively of MSOL and, in Keene’s case, a Director of and consultant to Worldwide. When I asked Keene how he and Morris could tell a lie like this in such a document he replied that it wasn’t important because the document, “was only used to raise money”!

On March 22nd a Board meeting of Worldwide was held in London. We discussed Mr X’s offer and the following day the co-ordinator of our investor group met with Mr X who increased the paper part of his offer to £2.75 million worth of shares in Brain Games. Had Mr X’s forecasts turned into reality and had our Board accepted his offer then “all of us” would indeed have “become multi-millionaires”. As it turned out we did not accept his offer. None of the Lehman Brothers £5-£8 million materialized and Brain Games’ hoped-for IPO is still in the future.

On March 24th, I suddenly felt an intuitive need to examine the bank statements of Mind Sports Olympiad Ltd. Hitherto the bank statements had been sent only to Keene, at his home. We had all trusted him so what need was there for anyone else to see the statements? I contacted the company’s bankers, HSBC, who quickly prepared duplicate statements. I looked at the most recent statement to see how much was currently in the account and immediately noticed a deposit on March 8th of £50,000. Yes, March 8th, just 2 days after the cat had been let out of the bag by the “Oh shit!” article in “The Times”. What a coincidence! The size of this deposit surprised me, as Keene had not mentioned any money being due or owed to our company and I was not aware of any.

I telephoned Keene that same day, a Friday, to ask him about the deposit. He said that the money was nothing important, just the repayment of some legal expenses. I was extremely busy at the time and left the matter there but over the weekend I started to wonder – what legal expenses? When I reached the office on the Monday morning I looked again at the recent bank statement and again telephoned Keene to ask about the deposit. On being questioned further he repeated his assertion that the money was a repayment of some legal expenses and said that the expenses were incurred “late last year”. I then looked back to the statements of the 4th quarter of 1999 and there, on December 14th, found a payment of £50,000 to Giloberg Finance Ltd, Mr X’s Swiss company.

I telephoned MSOL’s bank manager who faxed me a copy of the instruction to send the £50,000 to Switzerland. I first saw the fax the following morning – it was dated December 11th 1999 and signed by Keene and Morris. (In MSOL the signatures of two Directors are required for all cheques and other important instructions to the bank).

Note the date of this instruction to the bank – December 11th – the day before Morris’ fax to me saying that “… Raymond is doing what he can to keep the possibility of some sort of deal with this group open for a while longer.” Yes – sending £50,000 to the Swiss account of Mr X’s company would certainly help to keep open some interesting possibilities! And no doubt it was a pure oversight on Morris’ part to omit to mention in his fax that he and Keene had, just the previous day, instructed the company’s bankers to send £50,000 to Giloberg Finance Ltd.
(Both bank statements and the instruction to send the £50,000 are reproduced in my open letter published on April 4th 2000.)

I immediately telephoned Keene at home and told him that we needed to meet and that he was in big trouble. He rushed over to our office and we met in one of his clubs nearby. I told him what I knew and said to him: “You used the £50,000 to set up Brain Games, didn’t you?” He replied: “Yes.”

I then explained to him that what he had done was illegal, in breach of contract and completely immoral. He argued that he had done it “for the good of MSO”. I asked if he had any shares in Brain Games and he admitted to having £900,000 worth (approximately $1.35 million at that time). I asked him if Morris held any shares in Brain Games and he said that Morris held the same number. I then asked him: “If what you have done was supposed to be good for MSO, how is it that you and Don have shares and we, the rest of the shareholders in MSO, do not?” He was silent, and was unable on subsequent occasions to find any answer at all to this telling question.

I told Keene that I would give him until 10am the following morning to make amends by arranging for control of Brain Games to be vested in Worldwide, failing which I would make known to our entire Board what he had done, with a view to taking legal action including, quite possibly, notifying the police.

The following morning at exactly 10am, London solicitors Edwin Coe, acting for Keene, Mr X and for Brain Games, sent me a fax demanding:

“1. Your immediate undertaking that you will desist from making any further threats against or taking any other detrimental action against any or all of our clients” and

“2. Disclosure from you of any disparaging statements you may already have made about any of our clients to third parties within 24 hours of your return to this country”.

(In using the phrase “your return to this country” Edwin Coe were referring to my trip, starting that morning, to Japan, to sign the “heads of agreement” for an offer made by a Korean company to purchase 85% of Mind Sports Organisation Worldwide Ltd for between £2 million and £4 million. That deal collapsed at the end of May 2000 following the collapse of the Korean stock market.)

As a result of this fax I put the matter in the hands of my solicitors, having already notified the entire Board of MSOL as to what Keene and Morris had done.


While I was in the Far East I was in frequent communication with my solicitors who, in turn, had been exchanging faxes with Edwin Coe. One amusing piece of information which came out of this exchange was in reply to an enquiry from my solicitors as to why Edwin Coe had paid £50,000 to MSOL. (I had discovered this by asking our bank to provide a copy of the paying-in slip used when the £50,000 cheque was deposited on March 8th but I was not aware that Edwin Coe owed the company any money – despite being a Director of MSOL and that company’s second largest shareholder.) The paying-in slip is reproduced and Keene’s signature can be seen in the “Paid in by” box. The cheque is also reproduced here, albeit rather faint. (Copy available upon request.)
The answer from Edwin Coe was that they had been told that the £50,000 was money owed by Brain Games to Keene and that Keene had requested that the cheque be made payable to MSOL.

As each missive arrived at my solicitors from Edwin Coe my rage towards Keene grew and grew to the point of being incandescent. I decided to make public what he had done and how I felt about it. I decided that the best forum would be the Internet – if Keene had the temerity to sue for defamation I would be able to substantiate everything in court and I had no fears, after taking legal advice, that any jury would believe he had acted “for the good of MSO”. I wrote the open letter and faxed it from Hong Kong, on the evening of April 4th, to Sam Sloan in New York (where it was early morning). I felt that, through Sam’s web site, I would reach many of those who I would want to be informed about Keene’s actions. The open letter was posted at: www.ishipress.com/levyletr.htm; Keene’s reply www.ishpress.com/keene-re.htm. My response to his reply is at: www.ishipress.com/levyrere.htm. This response contained the news that on April 11th Keene had resigned from the Board of Worldwide.

That was the last time I wrote about the matter up to now.


My open letter was reproduced, in whole or in part, in other chess publications. “New In Chess” 2000, Issue 3 (pages 7-8), offered no comment. The “Inside Chess” Web site http://www.insidechess.com/ [Now defunct. -ed] quoted extensively from it in an excellent editorial, in which I was justifiably chided for having kept quiet in the past about some of Keene’s less impressive activities. Yasser’s editorial picked me up over a few select acts of Keeniana:

GM Yasser Seirawan Publisher’s Message April 17, 2000
Inside Chess™ Online

“On the eve of the press conference, Keene’s business partner and former brother-in-law IM David Levy charged Keene with embezzling funds from their company to fund a separate lucrative venture for himself! I’m shocked, shocked! Keene has since denied the charges, claiming that he had actually loaned money to the company and had not embezzled nary a shilling. Hardly an auspicious beginning for Braindrains, sorry Braingames. The question we will be forced to ask is, will this new initiative last longer than the WCC?

“As for David Levy and his blinding epiphany, where on earth was Levy when Korchnoi showed that Keene had broken his contract when working as his second at the 1978 world championship match? Where was Levy when Edward Winter presented irrefutable evidence of Keene’s misconduct on a whole variety of issues? Where on earth was Levy when GM Tony Miles told the world that he and Keene had jointly conspired and did in fact defraud the British Chess Federation? Wasn’t it this charge that brought a swift resignation and graceless exit from the BCF by Keene? Where was Levy when Keene was caught red-handed plagiarizing copyrighted material from Inside Chess magazine for one of his potboilers? It seems that Levy has only recently seen the light.”

Fair enough Yasser.

Yet another source that carried most of the open letter was the British magazine Kingpin, No. 32, Spring 2000, (pages 25-30) https://www.kingpinchess.net/. The article in Kingpin, which carried the title “Raymundo contra Mundum”, was an exposition on Keene’s career and gave considerable detail on some of the matters raised in Yasser’s editorial.

The Kingpin exposé includes extracts from a long article in similar vein that appeared in one of Britain’s most prominent newspapers The Sunday Times (Colour Magazine, January 13th 1991, pages 16-22), but Kingpin did not go into any detail about the plagiarism incident to which Yasser referred. For the sake of completeness Yasser has kindly provided the references regarding the plagiarism matter, all from Inside Chess: May 3rd, 1993, pages 24-25; June 14th 1993, page 19 and February 7th 1994, page 3.


After admitting to me (verbally) that he had used the £50,000 to set up Brain Games, Keene soon changed tack and denied it, claiming instead that the money had been paid to Mr X for financial advice. This was the defence he used at a hastily called Board meeting of MSOL on April 8th 2000, a meeting called with less than 48 hours’ notice and called at a time when I had already left the country for a long-standing commitment. At that meeting Keene presented a 6 page document in defence of his actions. Section D of his defence document is headed “MISUNDERSTANDINGS ARISE” and starts with the following point:


The reason Keene switched to this line of defence is not difficult to see. He was “adapting” the mandate given to him at the November 8th Board meeting of MSOL so as to override the provisions of the company’s shareholders agreement, which require a “Special Majority Approval”, i.e. a 60% shareholder vote, in order to sanction any such expenditure. Having adapted his mandate to suit his purposes Keene thereby claims that he could spend any amount of the company’s money on whatever he wished. Keene then tries to argue, on the basis of his “adaptation”, that he and Morris were entitled to send £50,000 to Mr X’s Swiss company. Not only does that argument not hold water (the 60% shareholder requirement is an absolute condition) but also, how can Keene possibly argue that the £50,000 was spent on behalf of the company, as required even by his own interpretation of the Board mandate of November 8th? For that part of his defence to hold up the £1.8 million in shares that he and Morris were given in Brain Games should have been given to Worldwide. Then his actions, despite being highly speculative, might possibly have been of benefit to MSOL, which owned 50% of Worldwide.

Let us now turn to another aspect of Keene’s defence, that the money was used to pay for financial advice. Does this have any credibility at all? In point 3 of section D we find:


This explanation is so entertaining as to be worthy of repetition, in bold: “[Mr X]’s advice, on receiving his fee, was that an attempt should be made to acquire the rights to the World Chess Championship with Garry Kasparov.” But Raymond, that is exactly what you said you were doing for Worldwide, and one of the things for which you had been paid for doing for Worldwide right up to March 6th 2000. Furthermore, his statement in Section D part 3 is totally inconsistent with Keene’s assertion in Chess Café posting 317-39 (see above) where he claims to have “invested” the £50,000 in order to try to secure the World Chess Championship. If that were true then why would he need to pay Mr X to advise him that what he should be doing was to try to secure the World Chess Championship?

At the time when Keene and Morris transferred the money from MSOL the company’s sole cash assets consisted of approximately £60,000. Would any rational CEO or Commercial Director spend £50K of this remaining £60K for “financial advice” (a claim Keene repeated in the UK newspaper “The Independent on Sunday”, on May 13th 2001)? No they would not. And what was the stunning advice that Keene claims Mr X provided for this £50K? According to Keene the advice was to organize the World Chess Championship in London, something that Keene had been trying to do on behalf of Worldwide until he decided to switch horses, or rather create a completely new horse! And if Keene could raise £3 million to organize the Kasparov-Kramnik match for Brain Games, why was he unable to do it for Worldwide?

So much for the main planks of Keene’s defence. But there are other gaping holes in his protestations. Firstly, he claims (section D2 of the defence document) that his new company was set up before the £50,000 was transferred.


This is simply not true. Brain Games was created on February 4th 2000, almost a month and a half after the money was transferred and not before the transfer as stated by Keene. On the date the money was transferred, December 14th 1999, Brain Games Network Plc simply did not exist. Brain Games was created by changing the name of an “off-the-shelf” company called Pontifex Plc which had been incorporated on November 12th 1999. Everything stated in this paragraph is a matter of public record in the UK and can easily be verified by anyone who consults Companies House, either directly or via one of several Web sites which offer such searches. [Key in “Brain Games Network” or the company registration number 03875882.]

Next we come to the matter of £50,000 being deposited in the MSOL bank account on March 8th 2000. Yes, March 8th. Could this just possibly be a knee-jerk reaction to the March 6th “accident”, when the existence of Keene’s new venture was revealed in “The Times”? Or are the proximity and order of those two events mere coincidences?

Next we must ask, why did Keene deposit this money at all? One can only presume that originally he had intended to treat the money as a loan and believed that, by returning it, he would be putting matters right. However, once I confronted him on March 28th, as a result of which he took legal advice later that same day, he would have been told by his lawyers that he could not use the defence that the December 14th transfer of £50,000 was a loan to himself and Morris because such loans to Directors are strictly illegal in the UK. So Keene came up with an absolute masterstroke, explained in section G4 of his defence document:


Once again the sheer gall of Keene’s protestation here is such that his words should be studied carefully, and are repeated in bold to aid those with poor sight: “In fact this is money I have lent to MSO!!”

Now, dear reader, do you understand? Keene’s reason for paying in the £50,000 on March 8th was not that he had borrowed it illegally, nor that he had been panicked by the appearance of the article in “The Times” two days earlier, but that he was lending the money to the company MSOL!!

But why exactly did he suddenly feel the need, on March 8th, to lend MSOL £50,000? Did the company need the money? No, it was well within its overdraft limit. Did the company have a large, pressing bill to pay? No. In fact the company was due a tax rebate (Value Added Tax) and was solvent without Keene’s repayment of the £50,000.

After the MSOL Board meeting of April 8th Keene claimed that his defence had been accepted by the Board and that he was unanimously exonerated. Not only was Keene’s use of the expression “unanimously exonerated” disingenuous but also, as the reader will see from my reply to Keene’s response (both on http://www.ishipress.com/), the minutes of that Board meeting clearly show that, far from Keene being exonerated by the Board, no motion was put to the meeting on this subject and no vote was taken.


August-Sept. 1999 Keene starts to work actively, on behalf of Mind Sports Organisation Worldwide Ltd, and with some help from Levy, to seek sponsorship for organizing the next World Chess Championship title defence by Kasparov.

November 8th 1999 At the instigation of Morris a motion is proposed and carried at a Board meeting of Mind Sports Olympiad Ltd, giving Keene carte blanche to act “on behalf of the company” as he saw fit.

December 2nd 1999 Mr X (introduced by Keene) makes offer to Mind Sports Organisation Worldwide Ltd. Offer rejected.

December 11th 1999 Keene and Morris instruct Mind Sports Olympiad Ltd’s bankers to send £50,000 to Mr X’s Swiss company, Giloberg Finance Ltd. (This instruction was kept secret from all other Directors and shareholders of both MSO companies until discovered on March 28th 2000.)

December 12th 1999 Morris faxes Levy and the other Directors of Mind Sports Olympiad Ltd confirming that Keene will stay in contact with Mr X to “keep the possibility of some sort of deal with this group open”.

December 14th 1999 Bank sends the £50,000 to Giloberg Finance Ltd.

December 14th 1999 Registration of the web site http://www.braingames.net/

February 4th 2000 Brain Games Network Plc created by changing the name of Pontifex Plc

March 6th 2000 “The Times” announces the existence of http://www.braingames.net/

March 8th 2000 Keene deposits £50,000 in the bank account of Mind Sports Olympiad Ltd

March 24th 2000 Most recent bank statement reveals the deposit of £50,000 into Mind Sports Olympiad Ltd’s account on March 8th.

March 27th 2000 Scrutiny of earlier Mind Sports Olympiad Ltd bank statements reveal the transfer of £50,000 to Giloberg Finance Ltd on December 14th 1999.

March 28th 2000 Receipt of instruction letter from Mind Sports Olympiad Ltd’s bankers reveals that on December 11th 1999 Keene and Morris had issued the instruction to transfer the £50,000 of Mind Sports Olympiad’s money to Giloberg Finance Ltd.

March 28th 2000 Keene admits to Levy that the £50,000 was used to set up Brain Games Network Plc in which Keene and Morris own shares.

March 29th 2000 Solicitors acting for Keene, Mr X and Brain Games Network Plc demand that Levy desist from spreading allegations about their clients.

April 4th 2000 Levy sends open letter for publication on http://www.ishipress.com/ where Keene subsequently denies Levy’s allegation, professing that: “When the full truth emerges I think you will be amazed”. That was more than 16 months ago

Since Keene has not seen fit during the past 16 months or more to reveal “the full truth”, I have done so here. Please consider the above evidence and chronology very carefully and then ask yourself – who is telling the truth, Keene or Levy?

Is Fraud a Brain Game?

[First published on 6 January 2002 on the website http://www.kasparovchess.com/]

Raymond Keene and the London based company Brain Games Network plc (BGN) are the subject of fraud allegations made in an article entitled “Cheque Mates”, published in the current issue of the magazine Private Eye (Number 1044: Dec 28th-Jan 10th, page 27). The amounts in question total £510,000 (approximately $750,000), in addition to which the “Eye” discusses some fees totalling a further £201,000. This present contribution for Kasparovchess.com makes extensive use (by permission) of extracts and paraphrases of the Private Eye article. [Editor’s note: Those who might not be familiar with the British magazine Private Eye can find it described on Wikipedia as: “a prominent critic of public figures deemed incompetent, inefficient or corrupt, and has become a self-styled “thorn in the side” of the British establishment” The whole of the Private Eye article from issue 1044 is available on the Kingpin web site.]

When it was launched in the Spring of 2000 BGN attracted £3 million in investment, but within weeks more than £500,000 had been siphoned out of the company. Private Eye point out that Sir Jeremy Hanley, who has been Chairman of BGN since March 2000 (and is a former Chairman of the Conservative Party), “apparently did nothing to prevent” the frauds. He also appears to have decided, for whatever reason, not to bring them to the attention of the police. It was only when the company’s first set of published accounts were sent to shareholders in late November that some shareholders spotted the two transactions totalling £510,000 and their fraudulent nature.

In one transaction BGN purchased “the entire share capital” (to quote from the BGN accounts) of three virtually worthless companies for £220,000. These three companies were sold to Brain Games by Keene (its Games Director) together with a Swiss based company, Giloberg Finance Ltd. Keene, who is chess columnist of The Times, The Sunday Times and The Spectator, is not only a director of BGN but also a shareholder in the company. The phrase “the entire share capital”, used in the notes to the company’s accounts, appears to be designed to impart significant value to the three virtually worthless companies bought by BGN.

The fraudulent nature of this £220,000 transaction is transparent. None of the three companies: Praetor Ltd, Brain Games Ltd and Havendisc Ltd (now called Chess Associates Ltd), had ever traded prior to their purchase by BGN. Praetor Ltd was incorporated on December 7th 1999, only weeks before it was sold to BGN, and had a total value (capital and reserves) of £1,000. Similarly, Braingames Ltd (a private limited company, not the same company as BGN which is “public”) was also incorporated on December 7th 1999 and it too had a total value (capital and reserves) of £1,000. Havendisc had been incorporated on September 7th 1998 but was dormant thereafter. Its total value (capital and reserves) was £300. But despite these three companies having a total capital and reserves of only £2,300, Keene and Giloberg extracted “a total consideration of £220,000” from Brain Games for their sale (again, the quote is from BGN’s published accounts). Uncovering this particular fraud needed only the germ of suspicion and a visit to the Companies House web site where all of the above company details are available for anyone to see, upon payment of a very modest fee.

Another fraudulent transaction is described in BGN’s annual accounts as the purchase of “domains and a web-site for a total consideration of £290,000.” The web site in question is www.internetchess.com and was offered for sale by Chess & Bridge Ltd, a London company of excellent repute. Chess & Bridge Ltd, which owns a popular games shop in London’s Euston Road and publishes the UK’s leading chess and bridge magazines, sold this web site together with two domain names worth a few tens of pounds on May 5th 2000. However, that sale was not to BGN itself but to Giloberg, the transaction being negotiated on behalf of BGN (or was it Giloberg?) by Don Morris, a shareholder and former director of BGN and a friend of Keene’s. The sale price for the package was $100,000 (approximately £60,000 at that time). But before signing the purchase contract with Chess & Bridge Ltd Giloberg had, unbeknown to Chess & Bridge, already agreed to sell BGN that very same Web site and those very same domain names (www.brainrating.com and www.brainranking.com) for £290,000. By arranging for BGN to purchase the site in two stages Giloberg, which is itself a shareholder in BGN, made an instant profit of approximately £230,000, the difference between the asking price from Chess & Bridge and the price actually paid by BGN. Giloberg’s profit was Brain Games’ loss – all £230,000 of it.

In addition to these transactions Keene received fees of £50,000 within a few days of BGN receiving its £3 million investment income. One of the surprising aspects of this £50,000 payment is that it does not appear as a liability of the company in its Private Placement Memorandum – the document put out by BGN to attract investors. The company’s investors were therefore unaware at the time they put in their money that Keene was going to receive this payment immediately thereafter.

Sir Jeremy Hanley was appointed a Director of Brain Games on March 2nd 2000, a few days before the £50,000 payment to Keene, a few weeks before the purchase of Havendisc Ltd and two months prior to the Web site fraud. Why Hanley and some of the other members of his Board turned a blind eye to these transactions is unclear. Morris had already resigned as a director when these transactions took place but was subsequently so closely involved with the company’s activities that in any legal action involving the company he is likely to be classed as a “shadow director”. But being a friend of Keene’s it is perhaps not so very surprising that he kept his mouth shut. More bizarre is the behaviour of Dr Irving Finkel, a deputy keeper of antiquities in the Western Asiatic Department of the British Museum. Finkel is a friend of Keene’s and a man of many and varied interests, including ancient magic and the history of board games. Finkel’s fees from BGN for being a director of the company were set at £7,500 p.a. – it is difficult to understand why he would keep quiet over so much for so little. Another director at the time, Michael Gelb, is yet another friend of Keene’s. Gelb lives in Chevy Chase, Maryland, he visits London only occasionally and, I suspect, was most likely unaware of what was going on in the company.

Hanley’s own director’s fees were agreed at £12,500 p.a., not a vast sum for one so prominent. He has certainly given BGN its money’s worth, having been the public face of the company since its launch and presiding over the press conference in April 2000 when the Kasparov-Kramnik chess match was formally announced. In BGN’s first annual return, lodged at Companies House, Hanley was not acknowledged as being the beneficial owner of any shares in the company (nor were Finkel or Gelb). There were, however, 19 blocks of shares held by various nominees in Switzerland, the British Virgin Islands, Guernsey and elsewhere, and it is not easy to identify the beneficial owners of most of these nominee accounts.

Only one person in BGN had the courage to raise the question of fraud. Suzanne Martin, who was appointed Chief Executive Officer in mid-July 2000, came across a mass of documents in December 2000 that revealed the fraudulent transactions. But when she attempted to bring these matters out into the open in company meetings she was muzzled. So Martin turned to her solicitor who advised her to inform the police, which she did in mid-February 2001, having been fired on February 9th. Eleven days later Brain Games obtained a court order, compelling Martin to give up any company documents in her possession. Naturally this included any documents that could vindicate her allegations and prove anyone’s guilt. Martin has since launched an Employment Tribunal action against the company, due to be heard on January 14th and 15th.

Last year the police investigated Brain Games Network plc for possible money laundering and they interviewed Sir Jeremy Hanley. They found no evidence of money laundering and indeed there seems to be no reason why they should. What has been happening in BGN appears to be far simpler. It is fraud. But the evidence of this fraud only became publicly available when BGN’s first annual return was sent to Companies House in September, some time after the police investigation had been suspended. Now, with this new evidence becoming public, the police may need to think again.

In the meantime it appears to be business as usual for BGN. At an Extraordinary General Meeting held on December 18th, the company passed motions to retrospectively “ratify” the fraudulent transactions, though exactly how the word “ratify” can be used for transactions completed more than 18 months ago is difficult to understand. The company also plans to change its status from a plc (public company) to a private limited company, then to hive off assets into an offshoot called Brain Games Asia (which is registered in the British Virgin Islands) and to “reverse” into Einstein Group plc, a company quoted on London’s Alternative Investment Market. This particular brand of magic, if successful, will leave the current holders of BGN’s worthless shares owning instead some tradable stock in Einstein, possibly worth as much as £1 million. All this while BGN is being pursued, not only by Martin but also by some angry creditors. The fashionable London club, Home House, was awarded judgement against BGN at Central London County Court on October 25th, over the non-payment of £31,085.37p owed for the opening and closing parties of the Kasparov-Kramnik chess match one year ago. (Case number: CL108400. Brain Games Network plc has lodged an appeal, due to be heard on January 23rd.) Another thorn in the company’s side is Apco Asia Ltd, a Hong Kong company that was involved in Brain Games’ “sponsorship” of a major Chinese Chess tournament last June. (Chinese Chess, which differs from the western form of the game, is probably the world’s most popular board game, being played by half the population of China.) Apco Asia has been pressing for payment of invoices going back more than one year and totalling US$92,945.96 (approximately £64,000).

As it happens I am a stockholder in Einstein Group plc and am therefore entitled to ask reasonable questions about the company’s activities. In that capacity I wrote to Einstein’s CEO, Steve Timmins, on December 13th 2001, asking how his company could be seriously considering the acquisition of BGN and listing many of the reasons why, in my view, it should not happen (principally the frauds described above). I copied the letter to all of the individuals listed as being directors of Einstein Group plc, as well as to the company that advises Einstein and to the UK Financial Services Authority. Around lunchtime on December 17th I received a letter from Atlantic Law, a firm of solicitors acting for BGN. They said of my letter of December 13th:

“… quite apart from being wholly untrue, is seriously defamatory of Braingames Network Plc for whom we act and a number of parties associated with it.”

Atlantic Law’s letter gave me until the close of business that day, i.e. some 4 hours later, to:

“… retract in writing all of the allegations made in your letter …. not to repeat or publish such allegations in any form whatsoever and to make a contribution of £1,000 to a charity of Braingames’ choice…Should you not do so we are instructed to bring injunctive proceedings against you without further notice on Tuesday morning [i.e. the following day – DL] in the High Court…..”

Receiving a lawyer’s letter was not wholly unexpected and I was therefore not exactly quaking with fear when I discussed the matter by telephone with one of the partners at my own solicitors. I then sent the following reply by fax, so as to arrive in time for Atlantic Law’s “close of business” deadline. [A few typographical errors have been corrected for this publication.]

“ December 17th 2001

Atlantic Law,
1, Great Cumberland Place,
London W1H 7AL.Atlantic Law,

Dear Sirs,

I am in receipt of your letter (ref: ALG/EJH107) of December 14th regarding Brain Games Network plc (Brain Games).

I am replying to you myself as the principal partner at my solicitors is away until Wednesday.

Far from retracting all the allegations contained in my letter of December 13th to which you refer, I hereby reaffirm them. My defence to any defamation action brought by your clients will be on the basis of justification. Some of the sources on which I shall seek to rely in the justification defence are as follows:

The allegation that Brain Games bought three companies from Raymond Keene and Giloberg Finance Ltd for £220,000 is confirmed by a statement to that effect in the company’s own documents filed at Companies House.

The allegation that one of Brain Games’ directors is declared to have an interest in Giloberg Finance Ltd is confirmed by a statement to that effect in the company’s own documents filed at Companies House.

The allegation that Giloberg Finance Ltd is a Swiss company is based, inter alia, on Giloberg’s address being given as in Zurich on the list of shareholders in Brain Games filed with the company’s own documents at Companies House.

The allegation that the three companies in question are virtually worthless is based on their own documents filed at companies house. These show that in two out of the three cases (Brain Games Ltd and Praetor Ltd) the companies were incorporated on December 7th 1999 and sold to Brain Games Network plc on February 15th 2000, with no returns filed to indicate that any trading was conducted by either company during the intervening 10 weeks. Furthermore, share transfer certificates, all signed by Raymond Keene, a director of Brain Games Network plc, and dated February 15th 2000, show that 18 million shares of 1p each in Brain Games Network plc, were given by that company in compensation for the entire share capital of Praetor Ltd and Brain Games Ltd – the beneficiaries of the shares in Brain Games Network plc being: Marine Capital Corporation of Zurich, Willbro Nominees Ltd of London, Strategic Investment Management SA of Tortola, British Virgin Islands, Master Nominees Ltd of London, Don Morris (one of the company’s directors in February 2000 according to its own Private Placement Memorandum), Raymond Keene (another director of the company) and Pensacola Securities Inc of Nyon, Switzerland.

In the case of the third company, now known as Chess Associates Ltd but at the time of the transaction known as Havendisc Ltd, that company filed dormant accounts and there is no evidence filed at Companies House of it having traded at the time of the transaction in question. Furthermore, share transfer certificates, both signed by Raymond Keene, a director of Brain Games Network plc, and dated March 20th 2000, show that 4 million shares of 1p each in Brain Games Network plc, were given by that company in compensation for the entire share capital of Havendisc Ltd – the beneficiaries of the shares in Brain Games Network plc being: Raymond Keene (1 million shares) and Giloberg Finance Ltd (3 million shares).

You will note that the total number of shares in Brain Games Network plc referred to in the previous two paragraphs is 22 million, the value of 22 million shares @ 1p each being £220,000, reconfirming the consideration stated in the company’s own documentation filed at Companies House.

The allegation that Brain Games appear to be planning to have the Havendisc transaction “ratified” at their forthcoming EGM on December 18th is based on a statement to that effect in the letter from the Chairman dated November 23rd 2001 (see page 9 of the company’s own documentation sent to its shareholders).

Incidentally, although the company is seeking to have the Havendisc transaction (for 4 million shares) “ratified” at tomorrow’s EGM, it is interesting that no attempt is being made to “ratify” the Brain Games Ltd and Praetor transactions (for 18 million shares).

The allegation that Brain Games paid Giloberg Finance Ltd £290,000, in return for a web site plus a couple of domain names is confirmed by a statement to that effect in the company’s own documents filed at Companies House. The cost of the domain names in question at that time would be at most £50 or thereabouts, probably less. My letter of December 13th states that the web site was priced at approximately £60,000 – the supporting note shows that this approximation is based on the actual price of $100,000 at which Chess & Bridge Ltd sold the site and domain names to Giloberg Finance Ltd. The contract between Giloberg Finance Ltd and Chess & Bridge Ltd was negotiated on behalf of Giloberg by Don Morris and the agreed price was widely rumoured in circles surrounding the organisation of Brain Games’ match (October 2000) to be $100,000.

For the purposes of defending any legal action my solicitors would seek discovery of the sale agreement between Giloberg and Chess & Bridge Ltd, and would call as witnesses (under subpoena if necessary) Mr Henry Mutkin and Mr Malcolm Pein, the two partners of Chess & Bridge Ltd, both of whom could testify as to the date of the transaction and the amount paid by Giloberg for the site.

[NOTE: The possible need for a subpoena arose from the fact that the contract between Giloberg Finance Ltd and Chess & Bridge Ltd included a clause preventing Chess & Bridge Ltd from publicizing any details of the deal, though a court could order its Directors to testify as to its contents. – DL]

The allegation that Brain Games appear to be planning to have this transaction “ratified” at their forthcoming EGM on December 18th is based on a statement to that effect in the letter from the Chairman dated November 23rd 2001 (see page 10 of the company’s own documentation sent to its shareholders).

The allegation that substantial consultancy fees were paid out within days of the receipt by Brain Games of £3 million in investment income is confirmed as follows. The company’s own documents filed at Companies House state that Raymond Keene received fees of £50,000 in the period ended December 31st 2000 (note 17 to the consolidated financial statements). The company’s solicitors at that time, Edwin Coe, were asked by my solicitors (Teacher Stern Selby) about a payment of £50,000 dated March 8th 2000 made by a cheque drawn by Edwin Coe in favour of a company called Mind Sports Olympiad Ltd, of which Raymond Keene was Chief Executive Officer at that time. Edwin Coe’s reply was that (their instructions were that) the £50,000 was money owed by Brain Games to Raymond Keene and that Keene had requested Edwin Coe to make the cheque payable to Mind Sports Olympiad Ltd. As to the date on which Brain Games received its £3 million in investment – I was told by Keene on or around March 9th 2000 that the money had been received the previous week. Brain Games bank statements will be sought by discovery and will be able to confirm the exact date in order to verify that the phrase “within days” is accurate.

The allegation that no such liabilities (the £50,000 paid to Keene) had been declared in the company’s Private Placement Memorandum is simply proved by referring to the PPM itself.

The allegation that the statement that Brain Games Network plc “owns the global rights to the World Chess Championships” is a lie, this can be refuted in very many ways, including witnesses and documentation from FIDÉ [the International Chess Federation]. Perhaps the simplest way to demonstrate that Brain Games Network own no such thing would be to refer to the various web sites reporting on the World Chess Championships, organized by FIDÉ, which are currently in progress in Moscow. So far as I am aware Brain Games has not so much as suggested that it “owns” this event, and if an officer of the company would care to do so under oath it would be extremely easy to disprove.

The allegation that Garry Kasparov has publicly castigated Raymond Keene, the Games Director of Brain Games, and the company itself, in relation to their treatment of him following the Brain Games World Chess Championship match in 2000, particularly in regard to a return match, is on the Internet for all to see. I give the reference in my letter of December 13th. Similarly, the allegation that Kasparov’s manager, Owen Williams, published an open letter to David Massey (CEO of Brain Games), on several web sites, explaining why Kasparov has declined Brain Games’ invitation to compete in a qualifying event in Dortmund next year, is also on the Internet for all to see. Again, I give the reference in my letter of December 13th.

The allegation that a court judgement was made against Brain Games on October 25th 2001 in relation to an outstanding debt of approximately £31,000 is surely beyond doubt. It is a matter of court record (Central London County Court).

The allegation that Apco Asia Ltd, a Hong Kong company, has been pressing for payment of invoices totalling USA$92,945.96, covering the period October 2000 to July 2001, can be substantiated by a fax from Apco Asia Ltd to David Massey, CEO of Brain Games Network, dated August 16 2001, subject “Outstanding account”, which starts with the words:

“Our records show that the following invoice(s) is still outstanding. We sent our statements to your office repeatedly but have not yet received the payment. I should be grateful if you could settle this immediately. Please let us know if you have any reason for withholding your payment.”

The invoices referred to are stated in that fax to be (all sums in US dollars): $243.72 from October 31st 2000, $33,157.83 from April 30th 2001, $47,416.10 from July 13 2000 and $12,128.31 from July 31st 2001.

The above refutes your assertion that my allegations are “wholly untrue” and clearly proves the contrary.

When seeking an injunction on behalf of your clients you will, of course, be presenting this reply to the Court.

Yours sincerely,

David Levy

My final sentence was to remind BGN’s solicitors of a point of English Law. Had they indeed applied to the High Court for an injunction against me they would have been legally obliged to present to the Court the correspondence between us, in order to show the Court what they had demanded of me and how I had responded.

Late that same day, December 17th, I received a fax from Atlantic Law in response to my own fax to them. Their fax began:

“We are carefully reviewing the factual information contained in your letter of 17 December 2001. We are instructed that much of it is inaccurate and in due course will respond with details.

Your letter, however, fails to address the central issue. You have alleged in your letter to Einstein that there was a fraud. None of the items referred to in your letter of 17 December in any way particularise the issue of fraud. As you are aware, allegations of fraud must be pleaded with the utmost particularity. It may be that they were commercial transactions upon which different people might take a different view but the essence of fraud is a deliberate intention to defraud. There is no evidence of this.

We therefore again call upon you to confirm that you accept that no fraud has taken place and that you wholly withdraw any such allegations.

We look forward to hearing from you by close of business tomorrow. Until we have so heard we are prepared to refrain from taking any action for aninjunction, although we have advised our clients that nothing in your letter will prevent a successful application for an injunction and an award of costs against you…..”

When I read this fax I felt that I was already making some progress. Despite assuring me that much of the factual material in my fax to them was “wholly inaccurate”, Atlantic Law had not indicated one single allegation that their clients claimed they could immediately refute. But I had to respond to this second communication and did so as follows:

“December 18th 2001

Mr Andrew Greystoke,
Atlantic Law,
1, Great Cumberland Place,
London W1H 7AL.

Dear Mr Greystoke,

I am in receipt of your letter (ref: ALG/JT6698) of December 17th regarding Brain Games Network plc (Brain Games).

I must first apologise for two very minor typing errors in my fax of yesterday. Firstly, in the first paragraph on page 2, line 7, the year should be 2000 and not 1999. Second, on page 3 paragraph 3, line 11, it should of course read “to Mind Sports Olympiad Ltd” and not “to Brain Games”. The reason for the errors is that I received your letter only at lunchtime yesterday and had only a few hours in which to discuss the matter with my solicitors and prepare a detailed response by your deadline.

I come now to your fax of yesterday evening.

I await with interest your clients comments as to which part(s) of my fax to you are inaccurate, and why.

Regarding the question of fraud, let us consider the two relevant transactions.

In the case of the £220,000 purchase of three companies that had not traded, this appears to be a simple case of fraud by Keene and Giloberg on Brain Games, with the connivance of any directors of Brain Games who knew the full circumstances, namely that the three companies purchased had not traded and were worth, at most £2,300 in toto. You say that different people might take a different view on the commerciality of the transaction – I would be most interested to know the commercial qualifications of anyone who believed that £2,300 was worth as much as £220,000. I note with interest that the Chairman’s report [In the papers sent to shareholders in advance of BGN’s Annual General Meeting – DL] refers to the company taking legal advice on the commerciality of the Havendisc transaction, but does not refer to the company taking legal advice on the commerciality of the Praetor and Brain Games Ltd transactions, which were worth far more in terms of the numbers of shares paid in compensation (18 million shares for the two as against 4 million for Havendisc alone).

Incidentally, I should also point out that although Brain Games’ own valuation of the transaction for all three companies was £220,000, the 4 million shares provided for Havendisc were transferred on March 20th, after a new share value had been established of £1 per share (the investors paid £3 million for 3 million shares). By this reckoning Keene and Giloberg received £4 million worth of Brain Games shares on March 20th!!

Let us now turn to the question of the web site transaction for £290,000. Given that not only was Giloberg a shareholder in Brain Games, but also a director of Brain Games had an interest in Giloberg, is it not fraudulent for Giloberg and that director to enter into a sale agreement at a price of £290,000 knowing that the asking price from Chess & Bridge was only $100,000? If your clients could demonstrate that the site had increased in value by almost a factor of 4 between the time that the purchase took place from Chess & Bridge and the time that the sale was made to Brain Games, then it would be a different matter. But I am 100% certain that they can not.

I suggest you remind your clients that if a court finds that a fraud has taken place, and that one or more directors (or shadow directors) of Brain Games knew that the transaction was fraudulent and did nothing about it, then they too might be liable to prosecution.

Finally, it is only fair to advise you that copies of my faxes to you have been sent to the Financial Services Authority.

Once again, I stand by every allegation in my letter of December 13th and my fax to you of yesterday.

When you apply to the High Court for injunctive relief you will, of course, present this fax to the Court.

Yours sincerely,

David Levy

On December 19th I received a further fax from Mr Greystoke at Atlantic Law. In it he advised me that their clients:

“… have decided to consider the matter further over the Christmas period but wish to make it crystal clear that they do not accept any of your allegations.”

Although no more threats were made against me concerning the possibility of an immediate action for an injunction, Mr Greystoke stated that:

“We have continued to advise the Board that it has a valid claim against you for substantial damages for defamation and it may well be that that claim will be pursued early in the New Year either by injunction or by way of proceedings.”

Hmm. I have always understood that under English Law an application for an injunction must be made without delay, and on that basis any application for an injunction “early in the New Year” would be unlikely to succeed. But then, I’m no lawyer. What I do know for certain is that the facts contained in my original letter of December 13th and in my fax/letters to Atlantic Law, not only are they completely accurate but also they can be fully substantiated.

[Editor’s note: click here for more on Andrew Greystoke and see also The Times 18 May 2010: ‘The job opportunities lessen for Andrew Greystoke, fined and banned from the City last week for his part in a boiler room scam. Greystoke is also facing action by the Solicitors Regulation Authority for bringing the profession into disrepute, because his wrongdoing was in the course of his practice as a solicitor. What no one seems to have noticed is that Greystoke already has a bad record in the City. He was behind City and Westminster, a fringe bank that went bust in 1991. The Department of Trade and Industry, as was, tried to have him disqualified as a director and this seems to have prompted him to go into the law. The solicitors’ body says that in those days there were far fewer checks made on those going into the profession.’ ]

January should be one of the most interesting months in the history of Brain Games Network plc. Already in their schedule are the tribunal action brought against the company by Suzanne Martin and their own appeal against the judgement in favour of Home House, as well as the plan to spin off the company’s Asian interests and the reverse into Einstein Group plc. Add the detailed preparation for the Kramnik-Fritz match in Bahrain and it looks as though a busy time will be had by all.”

* * * * * * *


A ‘Pump-and-Dump’ Fraud from Brain Games

[First published on 21 November 2003 on the website www.ishipress.com]

During the period February-July 2000 two Londoners, Chess Grandmaster Raymond Keene and businessman Alan Lubin, perpetrated various frauds relating to a UK company called Brain Games Network plc. Within that short period the company’s investors lost all of their 3 million pounds investment. These same individuals are currently engaged in the early stages of what appears to be a very similar “pump and dump” scam, using a US company called RTG Ventures Inc as the vehicle. RTG Ventures Inc is supposedly based at 185 Madison Avenue, New York, and is traded in the USA as an over-the-counter bulletin board stock.

Several “amazing coincidences” have been revealed linking the creation of RTG Ventures Inc and the fraudulent methods used to set up the now bankrupt Brain Games Network plc. Some of these “coincidences” were published in the UK Magazine Private Eye (number 1093, November 14th-27th 2003). It was also Private Eye that exposed the previous frauds perpetrated by the very same people who are now involved with RTG Ventures Inc (see, for example, Private Eye number 1050, from which the relevant article is attached here). A more detailed account of the frauds may be found in the Internet article: “Is Fraud a Brain Game?”, which appeared on Garry Kasparov’s (sadly now defunct) web site http://www.kasparov.com/ and was reproduced elsewhere.

The first two stages of the Keene/Lubin methodology consists of acquiring most of the shares in a newly formed or otherwise impoverished public company through a share swap with other valueless companies, and then to hype their new company’s prospects in order to encourage potential investors.

In the spring of 2000 Keene and Lubin fraudulently hijacked 88% of the shares in Brain Games Network plc (BGN) while selling the remaining 12% to a group of hapless investors for 3 million pounds. That particular scam involved Keene and Lubin “selling” to BGN the share capital of three worthless companies. In return for all this useless paper Keene and Lubin snatched 22 million out of 25 million BGN shares while almost simultaneously selling the remaining 3 million shares to investors at 1 pound each (total = 3 million pounds). It is now only four months since BGN went into liquidation; Einstein Group plc, the UK company to which BGN sold off its chess “assets”, has since gone into administration (which is similar to Chapter 11 in the USA). Yet already history appears to be repeating itself, and this time the sale of shares to unfortunate investors seems to be planned for the USA as well as for the UK.

After the BGN investors had lost all of their 3 million pounds it was discovered that a large slice of money had been siphoned off by Keene and Lubin, mostly into the account at Bank Cantrade of Lubin’s Swiss company Giloberg Finance Ltd. With RTG Ventures, which appears to be about to change its name to Far East Challenges, the share acquisition has already taken place (see below) and the hyping process is now under way.

The hyping process itself is very much in line with one of the classic methods used in “pump and dump” scams – the company puts out several press releases designed to create interest in the market. Typically these press releases contain a mixture of false, misleading and unverifiable statements to the marketplace. In the case of RTG Ventures, their supposed business activities will lie in the Far East and it is difficult to see how prospective investors can hope to verify the company’s statements, for example those about agreements it already claims to have or is negotiating with the Chinese Sports Ministry.

The acquisition of shares in RTG Ventures is described in a change of control document (Form 8-K) filed with the Securities and Exchange Commission in Washington on June 5th 2003: “On May 21, 2003 we entered into an Agreement for the Exchange of Common Stock with MJWC, a British Virgin Islands corporation, the result of which MJWC became our wholly-owned subsidiary. On the same day, we entered into an Asset Transfer Agreement with Brain Games Asia, Inc., a British Virgin Islands corporation, in which we acquired all of the assets of Brain Games Asia, Inc. Pursuant to the two Agreements, the Company will be issuing a total of 26,475,000 shares. At the closing of the transaction, the Company will have a total of 31,683,000 shares issued and outstanding shares. As a result of this transaction, the shareholders of Brain Games Asia, Inc., and MJWC control approximately 84% of the issued and outstanding shares of the Company’s common stock.” This modus operandi is virtually identical to that used in the Brain Games Network scam. With a quick swap of paper Brain Games Asia, largely owned and controlled by Lubin (through Giloberg Finance Ltd) and by Keene, became the proud owner of most of RTG Ventures Inc. Their 84% of RTG Ventures is almost as large a holding as their 88% stake was in BGN.

The SEC Form 8-K also gives RTG’s explanation of why anyone would want to own MJWC and Brain Games Asia.

“MJWC has a contract with Chinese Sports Ministry to organize and promote the world Chinese Poker Championships until 2009. MJWC owns all the multimedia and Internet rights to the championships and the events leading up to it. MJWC also has contracts to organize and promote the world Mah Jong Championship until the games 2009.”

These particular claims are somewhat mysterious to those in the world of mind sports, given that the World Mah Jongg championships take place in Japan and not in China! And as for Chinese Poker, what world championships? Google knows of none, nor do any of the mind sports experts contacted by Private Eye. Equally dubious is the claim that:

“Because of these contracts MJWC has access to a database containing in excess of 30 million online players of the above games.”

In excess of 30 million!! Really?? Anyone planning to invest in RTG would do well to conduct more than a little due diligence before parting with their dollars.

In the case of Brain Games Asia, RTG describes its sole asset as: “the rights to organize and promote the Chinese Chess championships.” But BGN announced at its Annual General Meeting in December 2001 that Brain Games Asia owned “the worldwide multimedia rights to the Beijing Opera”? What has happened to that particular asset? Did it ever exist or was that simply another lie?

Other recent announcements from RTG raise more questions than they answer. Firstly there is the company’s Chief Financial Officer, Barrington Fludgate, who is also Chief Executive Officer of Xborder Corporate Services Inc, a company that shares the same office address in New York as RTG Ventures. A quick glance at the web site http://www.xbordercorp.com/ reveals the names of Xborder’s management, including that of David Massey. And who was the CEO of Brain Games Network from Spring 2001 until the company went into liquidation in July 2003? Right first time – it was David Massey.

A New York Business Wire announcement on October 8th stated that RTG “has partnered with MVI NOW Limited, a London-based streaming video speciality company” which will allow RTG to “provide live ‘buy now’ coverage by mobile phone of all semi-finals and the finals of the Chinese Chess Championship”. This seems extremely unlikely to happen, given that BGN’s last foray into Chinese Chess left the company owing some US$92,000 to Apco Asia Ltd in Hong Kong (as revealed in Private Eye number 1,044). But that is not the only surprising aspect of RTG’s partnership with MVI. On their web site http://www.mvinow.co.uk/, MVI claims to have developed a unique process “that enables quality video pictures to be viewed on 2.5G mobile phones” How the company developed this amazing technology so quickly is not explained – documents filed at Companies House in the UK show that MVI was incorporated as recently as June 13th 2003, the very same day that BGN announced that it would be going into liquidation! When I went to MVI’s office address in London recently I was told that the company had moved out two days earlier and had not left a forwarding address. Their telephone rings and rings – no reply and no voicemail facility.

My attempt to find out more about RTG Ventures by visiting its “office” on the 10th floor at 185 Madison Avenue was also frustrated. The company’s name does not appear in the lobby on the list of occupants of the building, nor does that of Barrington Fludgate’s company Xborder Corporate Services (whose web site proudly gives the Madison Avenue address, 10th floor). When I telephoned the number given on the Internet for both companies, my call was answered by a law firm, Raice Paykin Krieg. At first their telephonist said she had never heard of RTG Ventures but on being pressed she suddenly remembered that her firm took messages for RTG but had no idea where the company is located. When I asked about Xborder I was told the same thing – the company is not located there, she did not know where it is located, but Raice Paykin Krieg take messages for them. Finally I asked her if Barrington Fludgate was a client of her company and she confirmed that he is.

So RTG Ventures appears to have no offices, XBorder Corporate Services appears to have no offices and MVI Now Ltd is uncontactable. How strange!

What does all this mean? The recent flurry of press releases from RTG Ventures Inc appears to be part of a classic attempt to create public interest in the company and thereby to find investors unwise enough to buy the remaining 16% of the company’s shares for millions of dollars. Preparations for such a sale might also explain the company’s pretence that its assets – its “rights” in China – have real value. And why the claimed tie-up with MVI Now Ltd? Presumably this is to help convince any prospective investors in RTG that the company has access to some technology with huge earning potential, just as BGN claimed in its Private Placement Memorandum in March 2000 that it would develop a web site to attract huge pay-per-view revenues, which BGN never did.

Where exactly do Lubin and Keene fit in this new venture? It is partly through their beneficial ownership of equity in RTG, acquired via their respective ownerships of much of Brain Games Asia. But this is not the only connection. RTG announced on October 22nd that its “trading name” in Europe and China is Far East Challenges. A quick search of the UK Companies House web site reveals that Far East Challenges is much more than a mere trading name – it is a UK public company, registered at the office of Sinclair Silverman, the very same accountants in Golders Green Road, London, where Lubin and Keene registered BGN and various other companies! The directors of Far East Challenges plc are listed as Linda Perry of London SW3 (who also happens to be the CEO of RTG Ventures Inc in New York), Sir Brian Wolfson and Stephen Clifford.

Yet another coincidence is the address of the recently opened London office of RTG Ventures (also known as Far East Challenges plc). The company is located on the second floor of Berkeley Square House, in London’s fashionable Mayfair district. This is the very same building and the same floor where Einstein Group plc’s London office was located. Truly amazing! And when Private Eye telephoned the Far East Challenges office on October 31st to verify that Alan Lubin works there, the caller was told that Lubin was not answering his phone and must have “just popped out, probably for lunch”.

As for Keene – a press release on October 27th stated that: “RTG Ventures, Inc. (RTGV: OB), the interactive gaming company focused on the Far East, has appointed Raymond Keene, OBE, Games Consultant to the Company. Mr. Keene is the chess correspondent for the London Times and International Herald Tribune newspapers. He is widely regarded as the worlds leading expert on chess and mind games.” But RTG is partly owned by Brain Games Asia which in turn is partly owned by Keene, so RTG’s praise of Keene’s expertise presumably comes straight from his own mouth.

The press releases from RTG Ventures continue with one dated November 6th, relating to the company’s claim that it is “working with the Chinese Sports Ministry” to stage a three day convention in Beijing in May 2004, during which Keene “will simultaneously play 100 of China’s best players including 10 Masters and five Grandmasters, all under the age of fifteen.” As with most pump and dump press releases and SEC filings it seems impossible to verify many of the company’s statements, while other of its statements are simply lies. The claim regarding players “all under the age of fifteen” in the November 6th release is one such lie – China has not a single Chess Grandmaster under the age of fifteen, as Keene surely knows.

* * * * * * *

1 Comment

  1. seetharaman says:

    Amazing that Mr.Keene has not been prosecuted!

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