Mr. Ashcroft, who has dual British and Belize nationality, has attracted a great deal of attention through his roles as treasurer and major donor to the UK Conservative party. The fact that he operates many of his business affairs, seemingly unfettered, from the tax haven of Belize has drawn a lot of criticism in the UK and many of his dealings have come under intense scrutiny.

The suit has been filed in New Hampshire by unhappy Tyco shareholders. They claim that the directors made false and misleading statements to the public and used deceptive accounting to falsely boost the company's share price. They also claim the directors profited handsomely by selling over $242 million of shares they owned in the company.

The document filed with the court alleges Mr. Ashcroft and the other named directors took part in a "fraudulent scheme'' to "cover up and conceal Tyco's real business prospects and artificially to inflate the price of Tyco's stock so that it would be attractive... and to personally benefit by selling a substantial portion of their holdings.'' One claim relates specifically to Mr. Ashcroft stating he `sold 827,400 shares of Tyco common stock at artificially inflated prices for proceeds of $37,472,947.' A spokesman for Tyco said the allegations against the directors are without any foundation and the directors will vigorously defend themselves.

Mr. Ashcroft became a non-executive board director and major shareholder of Tyco when that company bought his Bermuda based ADT security firm for $6 billion in 1997. He still retains around $300 million of shares in Tyco.

The sale of ADT, a burglar alarm company, to Tyco, a diverse manufacturing company, was not without its own tussles because there was also a hostile bid for the company from Western Resources, which at the time owned 27 percent of ADT's stock.

When the deal was agreed with Tyco Mr. Ashcroft said, "The combination will enhance ADT's ability to continue its growth, not only in North America and the United Kingdom, but in all parts of the world utilising Tyco's established infrastructure. This transaction represents the best opportunity for current ADT shareholders.'' The events involving Tyco began in October 1999 when David Tice, a Dallas-based fund manager, published a critical report of the company. He did not charge Tyco with anything illegal or improper under established accounting standards, but advised people to sell stock based on the belief that Wall Street had been blinded by billions of dollars in special charges the company had taken in recent years.

As a result the market got very jittery and two months later the US Securities and Exchange Commission said it was going to investigate Tyco. The announcement wiped $14 billion off the company's value and investors' shares that had been worth more than $50 fell to only $23. But when Mr. Ashcroft sold his shares he received $40 each.

In July 2000 the SEC said it would not be fining the company or prosecuting any of its directors, but it did force Tyco to redo its financial accounts. It is based on this that the current lawsuit was begun.

Last October Mr. Ashcroft was granted his peerage under the condition that he would return from Florida and Belize, where he lives, to live and pay taxes in Britain. It is not clear exactly what his current residency status is, but a report in February this year suggested he was still not registered to pay UK tax.

UK Labour MP Peter Bradley has consistently criticised Mr. Ashcroft. After learning last Friday of Mr. Ashcroft's involvement in the lawsuit he called for Mr. Ashcroft to resign: "If Ashcroft is guilty of what is being alleged then this is a terrible indictment of Hague's (William Hague -- leader of the UK Conservative party) lack of judgment. Ashcroft should quit until the case is cleared up. He won't be sacked because he practically owns the party and has a stranglehold over its leadership.'' Mr. Ashcroft raised $42 million this month through sales of an additional one million Tyco shares. In a separate issue KPMG is to investigate for the UK government whether anti-poverty work in Belize is being undermined by tax breaks enjoyed by two companies. One of these companies, which enjoy 30-year tax exemptions, is Carlisle Holdings of which Mr. Ashcroft is the majority shareholder.

BUSINESS BUC