Archer's mayoral fund-raiser faces auditors' inquiry

The treasurer of Lord Archer of Weston-super-Mare's aborted campaign to be Mayor of London is being investigated by the company he works for over allegations that his wife and housekeeper were on the payroll and that company jets were used for family holidays.

The treasurer of Lord Archer of Weston-super-Mare's aborted campaign to be Mayor of London is being investigated by the company he works for over allegations that his wife and housekeeper were on the payroll and that company jets were used for family holidays.

Greg Hutchings, the chief executive of the blue chip industrial group Tomkins, the owner of gunmakers Smith & Wesson, faces the inquiry by the auditors Arthur Andersen after a number of corporate investors expressed disquiet.

David Newlands, who had taken over as chairman of Tomkins from Mr Hutchings, said a number of issues had to be resolved including who authorised various facilities enjoyed by Mr Hutchings and what submissions, if any, were made to the Inland Revenue.

Mr Hutchings, who earned £1.46m last year, is said to have used a company flat at Peninsula Heights, a Thamessidecomplex overlooking the Houses of Parliament, to host fundraising dinners for Lord Archer, who has an apartment in the same block. Before the collapse of his campaign, Lord Archer had sought contributions from figures in industry and commerce. The wealthy author was keen not to be seen to be "buying" the post of mayor. Subsequently, he was charged with perjury and perverting the course of justice over a 1987 libel trial.

Mr Hutchings chaired the Greater London Forum, a think-tank set up by Lord Archer when he ran for mayor.

At the time Mr Hutchings, a former corporate development executive for Lord Hanson, refused several requests from journalists to discuss his role in the forum. His business colleagues said he was apprehensive about the possible reaction of Tomkins shareholders to his involvement with Lord Archer.

There was ambiguity about how and where the money raised by Mr Hutchings and the forum would be spent. Lord Archer and his supporters had consulted the Neill Committee on Standards in Public Life about campaign donations, and his camp insisted the funds were "pre-campaign" not "campaign" donations.

Labour Party sources say the matter of funding would have been raised with Lord Neill had Lord Archer continued with his candidacy. A number of fund managers questioned Mr Hutchings' role in the mayoral campaign after Lord Archer pulled out. Earlier this year investors forced Mr Hutchings to split his role between chief executive and chairman with Mr Newland's appointment as the latter. Mr Hutchings had built up the company to be one of Britain's top 100, but in the past two years its market value had fallen from £4.4bn to £1.5bn.

Mr Hutchings' wife, Caroline, and their housekeeper had been paid by the company for several years, but the arrangement has now been cancelled, according to company sources. Concern has also been expressed over the ownership of four company jets by a Tomkins subsidiary, Chauffair. Mr Hutchings is alleged to have used the planes to fly to his holiday home in Portugal. The company said the aircraft were in the process of being sold.

Apart from Peninsula Heights, Tomkins owns another London flat at a prestigious address, Eaton Place in Belgravia. Shareholders want to know why the company owned two such expensive properties and who else, besides Mr Hutchings, had access to them.

Mr Newlands is also thought to be investigating the group's charitable donations. For the past five years Tomkins had given about £40,000 a year to a charity called United Response. It is run by Su Sayer, a close friend of Mr Hutchings whom he once nominated for a Businesswoman of the Year award