Mr Watkins, who resigned from his pounds 130,000-a-year job at Amstrad on Wednesday, will head the UK and Hong Kong operations of Binatone, the privately-owned electronics importing business.
Mr Watkins, who oversaw the development of many of Amstrad's best-selling products during the 1980s, was one of two directors to sell their entire shareholdings in Amstrad in December.
He disposed of 563,500 shares, raising pounds 130,000, within days of shareholders defeating a proposal from Mr Sugar to take the company private. Malcolm Miller, Amstrad's marketing director, sold 714,000 shares.
It was Mr Lalvani who in 1966 accepted a post-dated cheque from the 19-year-old Alan Sugar in exchange for a vanload of Binatone electronic goods. Mr Sugar returned later the same day to pay off his credit in cash, having sold the lot. By 1988 the business he started that day had a turnover of more than pounds 600m.
Amstrad is in much worse shape now, however, thanks to tough trading conditions in the personal computer market, and Mr Watkins's departure is a significant blow for the company.
Amstrad is in the process of recruiting two non-executive directors from a shortlist drawn up by ProNed, a lobby group promoting non-executive directors. The appointments were forced on Mr Sugar by disgruntled institutions.
Mr Lalvani said the appointment of Mr Watkins would 'accelerate Binatone's global expansion'.
The company, which grew from humble beginnings importing transistor radios from Hong Kong in the 1960s, now supplies 30 per cent of all telephones in the UK, more even than BT.