Loan that led to a lengthy battle

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THERE were two DTI reports into Blue Arrow, the employment agency group of which Tony Berry was chairman in the 1980s.

The first dealt with allegations of misconduct by Blue Arrow's City advisers over its pounds 837m rights issue to fund the acquisition of Manpower in 1987. It led to the Blue Arrow trial, in which 14 defendants were acquitted.

Mr Berry was not a key figure in that report but was criticised in the second report, which concentrated on a pounds 25m loan by Blue Arrow to the entrepreneur Peter de Savary for a property development on Canvey Island.

The DTI report said that Mr Berry made the loan without formally consulting the board, which was 'clearly not acceptable conduct' for the head of a public company. Mr Berry has always denied this accusation.

The report went on to say that the project was a genuine commercial deal and that no fraud or impropriety was involved. It said that in part Mr Berry was a 'victim of circumstances' and made no personal gain.

The DTI inquiry into Blue Arrow was launched on 26 May 1989 and the second report was published on 24 September 1992, almost a year after the then Trade Secretary, Peter Lilley, gave notice of his intention to start disqualification proceedings against Mr Berry.

These proceedings were started on 13 January 1993 under section 8 of the Company Directors Disqualification Act 1986. This enables the DTI to ban people from being directors based on the findings of its own reports.

The DTI handed a letter to Mr Berry's representatives 30 minutes before yesterday's hearing, saying it was dropping proceedings.