Robinson cleared over Transtec failure

Cleared of wrong-doing: Millionaire Geoffrey Robinson

The former paymaster general Geoffrey Robinson has been cleared of any wrongdoing over the collapse of an engineering company he founded.

Investigators from the Department of Trade and Industry said Mr Robinson was never told about a crippling £11m claim against TransTec, the car parts firm which collapsed 14 months ago.

Engineering firm hid payments from shareholders

The inquiry was launched after it emerged that the multi-millionaire Labour MP resigned as non-exective chairman of TransTec when he was appointed a minister, a few weeks before the demand by the Ford motor company.

An interim report from the DTI concludes: "Until December 1999... neither the fact of the claim, its settlement, nor the true reasons for the related payments to Ford were reported to the non-executive directors."

But it concluded there were irregularities in TransTec's accounts "which required further explanation".

A statement released on Mr Robinson's behalf welcomed the findings, saying "the interim report confirms the account he has stood by throughout".

Tory attack

But the Conservatives dismissed the findings as inconclusive and accused Labour of using delaying tactics to limit damage to the government before the expected spring election.

Last year Mr Robinson, MP for Coventry North West and a close friend of Prime Minister Tony Blair, said he had been vindicated when West Midlands police decided not to bring fraud charges over grants TransTec claimed from the government.

The interim report confirms the account he has stood by throughout

Geoffrey Robinson statement

The DTI report described TransTec's accounting as "aggressive" and said it was concerned about "euphemisms" given to items in its books.

"Another way of putting it is to say that a more conservative view could have been taken of profits."

A flamboyant figure within the Labour Party, Mr Robinson was forced from office in 1999 after the disclosure that he had leant the then trade secretary Peter Mandelson £373,000 to buy a house in Notting Hill, London.

He founded the West Midlands-based TransTec in 1981. A decade later he negotiated a reverse take-over with one of the companies owned by the late Robert Maxwell, after it ran into difficulties.

Deal kept from shareholders

TransTec went into receivership on December 24 1999 after it had been forced to pay £11m to Ford in a dispute over components.

The settlement had been kept from shareholders.

"This report concludes nothing, and leaves absolutely everything that really matters until the final report is published.

David Heathcoat-Amory, shadow trade secretary

Mr Robinson was non-executive chairman until appointed paymaster general, but he remained a 16 per cent shareholder of the firm.

The DTI is also examining how the company was founded and the activities of its subsidiaries including £1.3m of DTI grants they received.

Throughout the 1990s, Mr Robinson was at the heart of New Labour's inner circle, helping to fund the office of then shadow chancellor Gordon Brown and twice letting Tony Blair use his villa in Tuscany for holidays.

When allegations about Transtec were first raised a year ago, they were seen as damaging to the government as the opposition accused it of "sleaze".

Tory anger

Shadow trade and industry secretary David Heathcoat-Amory said: "This report concludes nothing, and leaves absolutely everything that really matters until the final report is published.

"It seems inconceivable that Geoffrey Robinson, as the largest single shareholder, did not know what was happening to his company.

"All the questions the inspectors need to address will remain unanswered until after polling day."