Directors threaten action over papers

The Aitken affair: Refusal to grant access to documents could take BMARC receivers to court

CHRIS BLACKHURST and

TIM KELSEY

The receivers of BMARC, the company at the centre of the arms to Iran storm, could face court action to force them to grant wider access to documents seized by Ministry of Defence police (MDP).

Two former directors of the failed company, which once counted Jonathan Aitken MP on its board, are threatening the move, which will add to the Government's growing embarrassment over the arms-to-Iran scandal. The papers being sought by Gerald James, BMARC's former chairman, and John Anderson are thought to contain briefing reports for company directors and progress reports on sales contracts.

Around 1,600 storage boxes of documents were seized by MDP from BMARC in 1990. Most have been handed to Coopers & Lybrand, the company's receivers. To the embarrassment of the Government, the MDP admitted at the weekend that it had recently discovered more papers which would also be sent to Coopers & Lybrand.

Nicholas Soames, the Armed Forces minister, said last night that the discovery was made during "re-sorting of all the property stores" at the force's headquarters in Wethersfield, Essex.

In a written parlimentary answer, Mr Soames said the papers had been obtained during an investigation into corruption in MoD procurement contracts. Opposition MPs demanded to know how many other BMARC documents the ministry held.

Mr Soames told Labour's defence spokesman, David Clark, that an MoD police inquiry would ensure no further documents relating to the investigation remained in their hands and would investigate how they came to be wrongly located. It would also establish what action was needed to ensure similar "mistakes" did not occur again.

Mr Aitken has repeatedly denied having any knowledge that naval guns from BMARC were illegally destined for Iran.

It was a handful of company papers that sparked the controversy last March when the Independent reported they showed Mr Aitken had attended board meetings and received reports mentioning Project Lisi, codename for the Singapore contract.

Access to the remainder of BMARC's documents has been strictly controlled. Chris Barlow, the Coopers & Lybrand receiver, said he would only release them to the "competent authorities" or under court order. So far, only the Scott inquiry has received any BMARC papers to see if they are relevant to its arms to Iraq investigation.

"I could take out a court order," said Mr James. "Coopers & Lybrand have taken it upon themselves to act as though they are a government department. The fact they are only preprared to let government departments take copies is incredible."

Kevin Robinson, Mr James's solicitor, is demanding a full list of all the company's papers. If needs be, Mr Robinson said, he will resort to court action.

Mr James and Mr Anderson are among six former board members of Astra, BMARC's parent company, facing proceedings to disqualify them as directors. They claim they require a list of all the papers to help their case. They also allege that when the MDP raided their offices, personal papers were taken. Mr Anderson is preparing to issue a summons.