UK firm 'shocked' by claims it broke Iran sanctions

Situated on a small industrial estate in Middlesex, Insultec Ltd has few obvious attributes of an important supplier to Iran's secret nuclear programme. For the last 20 years, the company has quietly gone about its business selling insulation for oil refineries and gas plants. Then it found itself the subject of a secret American diplomatic telegram sent from Azerbaijan.

The company, which employs 22 people at its plant in West Drayton, yesterday declared itself "shocked" and issued a flat denial of allegations in the cable released by Wikileaks, which claims that the company had "secretly provided cladding, thermal insulation and ancillary equipment to the government of Iran".

Thrust into the spotlight of worldwide media scrutiny, Insultec and its directors were fielding enquiries from newspapers and broadcasters around the globe about their unwanted new status as an "Iran sanctions-buster".

Quoting a UK-educated Iranian businessman as its source, the American memo stated that materials allegedly sent by Insultec via Turkey and the United Arab Emirates "could be used in nuclear reactor construction" and that the British company has "maintained a sanctions-evading relationship with Iranian government companies for some time". The document was written last March in the US embassy in the Azerbaijani capital of Baku.

The cable, entitled "Iranian source names 'UK-registered' company as Iran sanctions-buster", went on to suggest that unknown materials sent in recent months under an Insultec label had ended up at Bushehr, the Russian-operated nuclear power station in southern Iran.

The only problem was that Insultec has not done business inside Iran for around a decade – prior to the imposition of trade sanctions against Tehran. A company spokesman said it would not contemplate exporting to Tehran for "a whole range of ethical, legal and practical reasons". In a sign of the pitfalls for governments generated by raw intelligence from a single source, Insultec said that it was the victim of a smear campaign by a former sub-contractor with contacts in the American diplomatic corps.

In a statement, the company, which pointed out that its client base consists of engineering and construction companies largely based in Britain, Europe and Japan, said: "Insultec Ltd is shocked and completely denies the allegations regarding supplying materials for nuclear reactors to Iran. Insultec is investigating the source of this false allegation, although it appears to be a disgruntled sub-contractor, who at the time of the allegation was engaged in tense negotiations regarding disputed claims from him for a project in Azerbaijan."

The company added: "Insultec has and always will work within the legal requirement of English law and international law."

Ian Crosby, the company's general manager, told The Independent that it had previously supplied insulation materials to Iran but the exports took place long before the imposition of United Nations sanctions in 2006.

He said the company had carried out an audit of all its orders in the last four years and nothing had been sent with its knowledge either directly or indirectly to Iran.

He described the claim that it had built up a "sanctions-evading relationship" with Iranian companies as "laughable".