back at allegations that they misappropriated large amounts of investors funds.

As more cases unfold of investor anger against them and unpaid debts, the Boston-based financiers have defended their position.

They have accused The Royal Gazette of printing "false, misleading and defamatory'' allegations about them.

Rather than being the guilty parties in their long list of business failures, Dr. Beinhocker and Mr. Plunkett believe they are the real victims.

They claim that a group of interlinked business associates are ganging up on them unfairly.

In a 13 page statement, they say: "For The Royal Gazette to create the illusion that we have been the participants in independent and unrelated lawsuits is factually incorrect and misleading.'' They claim the newspaper has been "used and hoodwinked by the same group of adversaries we have been battling for a long time''.

The statement goes on: "This `tempest in a teapot' in some respects is litigation soap opera.

"The Gazette has acted irresponsibly, your article is false and mean-spirited writing which we believe required this response.

"Just as a country that has a dominant political party can suffer from abuse of power, a country that has one dominant newspaper can also suffer from the arrogance of the unfettered misuse of the pen in the hands of individuals who do not use that power in a responsible or ethical manner.'' Comments from several current and former business associates that they bled a variety of companies until they collapsed are lies, they say.

They blame other people for their company flops, which, at the latest count, include a rubber products supplier for the oil industry, two plastic parts manufacturers, a petroleum firm and three investment companies.

One by one, they attack former business colleagues who accused them of milking businesses for their own gain.

American businessman Mr. Michael Rubin had accused them of ruining oil parts supplier Paragon Plastics, a company which he had run rofitably for 20 years before selling it to Dr. Beinhocker in 1983.

But they say those responsible for the firm's demise were Mr. Rubin himself, who stayed on to run the firm on a management contract, and fellow entrepreneur Mr. Robert Bolen.

Mr. Bolen, who is suing them for over $2 million in alleged unpaid consultancy fees, had helped expand Paragon through contracts with Lever Brothers and Lipton Tea Co., in the US.

But Dr. Beinhocker and Mr. Plunkett say: "The programmes were a total failure and both Mr. Rubin and Mr. Bolen were fired for cause by the board of directors of Paragon as a result of their performance.'' Mr. Rubin's allegations that they milked the company to collapse, an allegation which has been repeated by others, is "simply false'', they say.

They added that Mr. Bolen's lawsuit was "meritless'' and claimed it was on the verge of being dismissed.

As for an allegation that Kuwait's royal family were investigating them for over $1 million, they claim this allegation exists "only in the mind'' of their US representative, Mr. Waseem Kabbara.

Like other US businessmen such as Mr. Harold LaValley, Mr. Ruben Aragon and Mr. Vijay Dandapani, they had to get rid of Mr. Kabbara because he was a negative influence, they said.

A US court has previously made a finding that Dr. Beinhocker and Mr. Plunkett performed "breach of fiduciary duty and oppressive conduct'' against Mr.

LaValley and other investors.

They claim that Mr. LaValley's allegation that they tried to hire a "salary expert'' to recommend remuneration increases for them was not true. "We never received salaries from Regal,'' they say.

Mr. LaValley, though, said that one of the purposes of the "expert'' was to recommend salaries for them on top of their expenses, which included a $10,000 monthly allowance to pay their office rent.

The financiers deny that Mr. Aragon was awarded any damages when he successfully sued them for slander/libel and received $420,000 in an out-of-court settlement.

"He was paid $420,000 due him on certain notes he held and the balance due under an employment conctract,'' they say.

Mr. Aragon, though, says this is not the case.

"I loaned the company $250,000 and was paid $420,000,'' he said. "Some of the money was owed to me, some was in settlement of an employment contract and soem was to settle a law suit in Oklahoma.

"The only claim on the lawsuit was for slander and the money I received in settlement of this was damages.'' Some of the charges made against Mr. Aragon in the statement were the same as those that he sued for slander/libel, he said.

Mr. Aragon also conflicts with the two Americans' view that "the losses in Regal and Paragon were caused by manufacturing losses''.

"Most of the losses in Regal were connected with matters totally unrelated to manufacturing,'' he said.

Regal suffered major losses as a result of some poor acquisitions instigated by Dr. Beinhocker, including Waterman Industries and Bell Petroleum (see this section).

Disgruntled investors Mr. Timothy Jenkins, a former bank officer in Bermuda; Mr. Jeremy Fitzpatrick, who grew up on the Island, and American Mr. Albert Roeper are also attacked by Dr Beinhocker and Mr. Plunkett.

They are suing Mr. Fitzpatrick for libel, accusing him of initiating The Royal Gazette's investigation.

They have not been deterred by the fact that the investigating journalist has told them that he did not know of Mr. Fitz-Patrick until after the inquiry had already started.

After previously claiming that Bermudian Dr. Ray Smith had told them that Mr.

Fitzpatrick had started the newspaper's investigation, the two Americans now say that local lawyer Mr. Perry Trott has corroborated this.

However, Mr. Trott, who is the corporate secretary of Dr. Beinhocker and Mr.

Plunkett's Bermuda-based American Russian Cosmos, denied this was the case.

He appeared surprised to learn of the financiers' claim and added: "There has been a clear misunderstanding here. I will contact them and put the matter straight.'' They accuse Mr. Jenkins of breaking Massachusetts law by secretly taping conversations with them.

In a telephone conversation after The Royal Gazette received the statement, Mr. Plunkett said: "I've been a successful businessman for over 35 years.'' Both he and Dr. Beinhocker refused to name a single enterprise they have run successfully and former business associates say there are none.

Mr. Plunkett repeated that all the allegations against them in the newspaper's article were "unsubstantiated''.

When told that he could take action in the courts if that was the case, Mr.

Plunkett said: "I'm writing this down and I have a witness here.'' After being asked about the state of his business interests, he replied: "Everything's fine, no thanks to you, you b......'' Mr. Plunkett, who had been contacted at his Boston office, then said he had another call coming in and hung up his phone.