Former Astra boss and chartered accountant Gerald James is to face continued investigation by the Joint Disciplinary Scheme, despite the disclosure of a government lawyers’ letter saying the original Department of Trade and Industry investigation was flawed.
The correspondence, sent to High Court judge Mr Justice Rattee on 10 July, said key evidence that DTI inspectors recommended ‘no further action’ against all but one of ‘arms to Iraq’ company directors, including James, was not passed to former DTI president Michael Heseltine during the original investigation.
But the evidence accumulated by the DTI on Astra’s chairman is still being used by the JDS in its probe. JDS chief Chris Dickson said the inquiry into James would cover ‘much the same ground as the DTI’.
The government lawyers’ letter said the inspectors’ recommendation was ‘not brought to the personal attention of then president Heseltine when he took the initial decision in May 1994 that proceedings should be commenced.’ It is understood the DTI produced the letter in anticipation of a malicious prosecution action against the DTI by James.
The allegation that John Anderson, another Astra director, brought #236,000 into the company in 1986 to boost disappointing profit forecasts is fundamental to the JDS’ investigation. A false invoice is believed to have been created.
In the DTI investigation, inspectors said another director must have been involved but found no evidence to link James to the allegation.
When DTI president Margaret Beckett intervened in April, DTI inspectors made a written recommendation that, with the exception of Andersen, no action be brought against the directors. Yet the JDS has continued its investigation.
James’ lawyer Madelaine Abas, of Owen Mitchell, said: ‘I understand they are still looking at that transaction. There has been a conscious decision to investigate it with vigour.’
Abas said the JDS had written to James on several occasions asking for information on deals at Astra. She added: ‘The JDS seems to be investigating with some energy and enthusiasm using documents that Heseltine did or did not see’.
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