The name of David Bick, a director of Financial Dynamics and part of the Regan advisory team on the Co-op bid, appears as a witness on the payment slip together with that of Mr Regan himself. At the time of the payment in January 1995 Mr Bick was a director of Buchanan Communications, the advisers to Hobson, Mr Regan's food manufacturing company.
The pounds 2.4m payment was made to Ronald Zimet, a mysterious businessman, in return for assistance in negotiating an extension of a contract between Hobson and the Co-operative Wholesale Society.
Mr Bick said his involvement was perfectly in order: "I was a witness signatory to the extension to the supply agreement." However, he denied he had in any way authorised it. "How can I when I am not a cheque signatory."
The payment is becoming a key issue on the Co-op bid as the CWS says its representatives say they know nothing of Mr Zimet or his company Trellis International. They say all negotiations were conducted directly with Mr Regan.
Mr Zimet, who is thought to be in Israel, has been instructed by his lawyers not to comment.
News of the unusual authorisation came as fresh details of the payment to Mr Zimet emerged. It is understood that the non-executive directors of Hobson expressed concern about the offshore deal. The two non-executives on the board were David Wigglesworth, the non-executive chairman, and Martin Bunting, chairman of Bluebird Toys and former chairman of Inn Business pubs group.
Hobson's auditors, KPMG, have already admitted that they had expressed concerns about the payment. KPMG said it only agreed to sign off Hobson's 1995 accounts following assurances from Mr Regan and fellow director, David Lyons, that the Zimet payment was in order.
Hobson's financial advisers, Swiss Bank Corporation, said it did not "clear" the payment to Trellis. It said it was told of the extension to the supply agreement with the Co-op in January 1995 but not the pounds 2.4m payment. When it was told two months later it resigned as Hobson's financial adviser.
Mr Zimet is said to have approached Mr Regan in early 1995 saying he could re-negotiate the deal for pounds 5m. He said that if he arranged it for less he would keep the difference. The deal was completed for pounds 2.85m.
The CWS recently wrote to Mr Regan asking for details on Mr Zimet's role and why it was worth pounds 2.4m. Mr Regan replied saying that Mr Zimet had been involved in the negotiations "for some weeks". He was employed "because Hobson had not succeed in negotiating an extension [to the supply contract] without assistance". It felt it could therefore "usefully use Mr Zimet".
Mr Melmoth wrote back pouring scorn on this explanation, saying that Mr Zimet had spent just three days on the negotiates and had been paid pounds 2.4m for his trouble.
Mr Melmoth sent a second letter to Mr Regan yesterday saying: "I find it extraordinary that you did not appear to ask Mr Zimet how he was able to overcome the CWS resistance to your proposed terms. Were you not curious? Didn't you ask him what effective new strategy or tactic or argument he had employed in order to obtain the CWS agreement?"Reuse content