Seven large boxes of internal minutes, board papers and other sensitive documents were returned to the Co-op yesterday after it obtained a High Court order against Andrew Regan, 31, the financier planning a pounds 1.5bn break-up bid for the 130-year-old movement.
The documents were obtained for Mr Regan by Allan Green, an executive of the Co-operative Wholesale Society (CWS), whom it accuses of "systematically stealing documents over many months".
The CWS claimed Mr Green routinely copied sensitive information and passed it to Mr Regan in a series of meetings, which it secretly filmed. One was held in a hotel car park in Beaconsfield, Buckinghamshire.
Graham Melmoth, chief executive of the CWS, yesterday wrote to Mr Regan and his City advisers, demanding to know if they were aware of the origins of the documents. CWS also asked what inducements or rewards were offered to Mr Green.
The affair threatens to be a severe embarrassment for several blue-chip City investment institutions backing Mr Regan. The institutions include Hambros Bank and Schroders.
In a letter to Lord Hambro, chairman of Hambros, Mr Melmoth said: "The evidence filed at court today by your clients and their fellow conspirators tells an extraordinary story. Mr Allan Green is shown as a common thief. It is clear your clients actively encouraged him to steal from the CWS and then used that stolen property for their own purposes.
"Please advise us which of these documents were shown to your people and when. Did any of them ask Mr Regan the question: where did these documents come from and how they were obtained? If not, why not?"
The CWS yesterday said it would pursue Mr Regan for "substantial damages" over the affair. Mr Regan's group continued its assault on the movement, sending details of its bid proposals to the CWS head office in Manchester.
This met with a frosty response from Lennox Fyfe, the chairman of the CWS. He said: "We intend to press on with legal proceedings and to secure a judgment for substantial damages against you and your fellow conspirators ... As for your proposal, I have given instructions that it should be returned to you unopened and unread."
The two sides are due to face each other in the High Court tomorrow where a judge will rule on whether to lift an injunction banning the use of confidential Co-op information.
The CWS also wrote to Mr Regan's key legal adviser, David Lyons, yesterday about the use of the information. It has written also to the Bar Council.
Mr Regan has been stalking the CWS, the largest part of the Co-operative movement, for months. He plans to break up the group and sell the parts to other bidders. His pounds 1.5bn bid will include a cash payment of pounds 1,000 to the 500,000 individual members of the CWS.
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