Ambitious director who traded in sales and intelligence

THE SCOTT REPORT

THE MATRIX CHURCHILL

MEN

When Paul Henderson started work as a 15-year-old apprentice at a Coventry machine tool factory he could have had little idea that he was to become for a time the country's best-known company managing director.

Rising from the shopfloor to the boardroom, the Catholic-educated Mr Henderson, along with at least one other Matrix Churchill director, became an informer for the intelligence services on the Iraqi arms procurement machine.

Mr Henderson began his contacts in August 1988 following the departure from the firm of Mark Gutteridge, its former export sales manager and up until then the main informant on the company's Iraqi contracts.

According to Mr Henderson's autobiography, he received a call less than a month after Mr Gutteridge had left the firm. ''We'de like to know if you'd be willing to have a word with us. A short meeting. At your convenience, of course. I work in London but I get up north quite often.'' It was these contacts with the intelligence serive that proved so crucial to Mr Henderson's trial in November 1992.

Mr Henderson's father, who worked as an electrical engineer at Land Rover, died from tuberculosis when Mr Henderson was quite young. His mother, Emily, went to work as a shop assistant to provide for her two sons. After school Mr Henderson became a toolmaker for Coventry Gauge and Tool which later became submerged into Matrix Churchill. It was the start of a career that was to climax in extraordinary circumstances.

Immediately after leaving Matrix Churchill in somewhat acrimonious circumstances - the Iraqi owners insisted he resign as managing director to pursue a management buy-out which never happened because of the raid by Customs and Excise investigators - Mr Henderson worked as a consultant to a couple of machine tool companies. One of these was majority-owned by his wife, Esther, whom he had first met when she was 16. They now have two children.

From September 1991 he worked as the chairman of a company called Sodi- Tech which won distribution rights to a Japanese brand of machine tools.

When the trial collapsed in the autumn of 1992 he set up a high pressure water-jet machine manufacturing business in the Midlands with the help of a Tory MP and a local financier.

Of the other businessmen involved in the Matrix Churchill case, Trevor Abraham, the firm's former commercial manager, and Peter Allen, for a period the sales manager, have tended to fade from the public gaze after the dramatic events of November 1992.

Mr Abraham joined a machine tool company based in Warwick after the trial and Mr Allen went to the United States to work for a company owned by the Labour MP Geoffrey Robinson. Mr Allen is now said to be back in the country.

Mark Gutteridge, the former export sales manager at Matrix Churchill until August 1988 and the man who recommended Paul Henderson as an informant to MI6, had been a lifelong friend of Mr Henderson. Together at Matrix Churchill the two men had travelled many times to eastern Europe. Their access was normally restricted to the capital cities, including Moscow, Prague, Warzaw and Budapest. Prior to 1988, Mark Gutteridge, whose wife is Polish, had been the firm's highly successful export sales manager for many years.

Mr Gutteridge spent some time after leaving Matrix Churchill working for an export consultancy firm that specialised in contracts with eastern Europe, until it got into financial difficulties a couple of years ago. Since then he has been out of work.

He says that since his role as an agent for the intelligence services was made public at the Matrix Churchill trial it has been difficult to get regular work in spite of his reputation as a good salesman.

Some of the 660 staff that were put out of work when Matrix Churchill collapsed are planning to sue the Government for compensation, saying that the machine tool company was effectively bankrupted by government intervention. They met Margaret Beckett, Labour's trade and industry spokesman, earlier this week in the hope that she might press their case.

Parts of the old company still exist, having been bought from the receivers, and in the past two years both the Matrix and Churchill brand of machine tool products have shown strong sales growth. That growth has been helped by the industrial recovery in the UK and high export demand from the Far East.

After receivership, the Churchill part of the company was bought by BSA Tools, a Birmingham machine tool company which is part of Automation Investments. The Matrix end of the company was also taken over by BSA but has since been sold to Transtec, a publicly quoted company based in the Midlands, whose non-executive chairman is Geoffrey Robinson, the Labour MP.

Roughly three-quarters of the Matrix machines made in Transtec's factory near Birmingham are sold outside the UK, particularly in India, China, the Philippines and Taiwan.

David Hellier