On Tuesday, US authorities announced criminal and civil accusations against the former CEO of a now-defunct British business for allegedly making a fraudulent offer to buy Textron Inc, a US aerospace and defence company, for $13.8 billion.

Melville ten Cate and his London-based Xcalibur Aerospace Ltd were never in a position to complete a tender bid for Textron, according to the Department of Justice and the Securities and Exchange Commission (SEC).

Ten Cate, 53, a dual U.S.-Dutch citizen now residing in Dubai, is still at large, according to prosecutors. He could not be reached for comment right away.

The defendant was accused of making overtures to Textron for nearly two years before publishing an ad in the New York Times on Nov. 9, 2020, proposing to acquire Textron shares for $60.50 each, a 56 percent premium, which he never paid for.

According to the SEC, ten Cate falsely claimed on Xcalibur’s website that he had secured $11 billion in financing, and lied about the financing and his company’s ability to fulfil the tender offer in an interview with the regulator’s staff.

Xcalibur claims to have developed unmanned aircraft capable of flying at great speeds.

The tender offer, which the Providence, Rhode Island-based producer of Beechcraft and Cessna business jets denounced as “fictitious,” boosted Textron’s stock by 15.9 per cent. At the time, Textron said it had 228.9 million shares.

Separately, the Justice Department accused eleven Cate of attempting to cheat banks and investors out of $500 million by misrepresenting Xcalibur’s financials and prospects, claiming the business had approximately $9.8 billion in cash.

“Fraudsters talk big and hope no one looks too closely at the bottom line,” U.S. Attorney Damian Williams in Manhattan said in a statement.

Ten Cate was accused with tender offer fraud, securities fraud, and two counts of wire fraud by the Justice Department. Each offence carries a potential sentence of 20 years in prison.

The SEC has filed civil charges and is seeking a fine in connection with the matter. Both cases were filed in federal court in Manhattan.

Last July, a British court declared Xcalibur bankrupt, according to US authorities.

(Adapted from Latestly.com)