Senior members of Mensa did not know that Harold Gale, the society's executive director, was using his position to run his own business activities from its headquarters, an industrial tribunal was told yesterday.
Kenneth Sutton, secretary of British Mensa, said that its directors were aware that he had a company called Harold Gale Associates but did not know the extent of his activities.
Mr Gale, 54, who held office for 19 years, was sacked for gross misconduct last March after officers of the society for people with high IQs raided its headquarters in Wolverhampton. He is alleging unfair dismissal at the tribunal in Birmingham.
Mensa says that Mr Gale made thousands of pounds by using his position to increase subscriptions to a magazine called Mind Games run by his own company and that he sold puzzles to newspapers who thought that they were buying them from the society.
Malcolm Duthie, representing Mr Gale, told the tribunal yesterday that Mensa's directors knew about his private business activities because they both used a Mr Nigel Tinsley as their accountant.
He said: "Nigel Tinsley was the accountant for Harold Gale Associates and British Mensa Ltd. He did the end of the year accounts for both and would have to liaise with Mr Neil Goulder, the treasurer of the British Mensa Committee."
Mr Duthie asked Mr Sutton: "You said Mind Games was tolerated because it was believed to be an outside activity?"
Mr Sutton replied: "All the directors were aware of Harold Gale Associates and all knew the flyers were put out for Mind Games with the information packs.
"But Harold Gale was an executive and should be working in our best interests at all times. None was aware of him producing any puzzles for his own benefit."
Mr Duthie asked Mr Sutton: "If you had known Mr Gale had operated a company that had produced puzzles for profit using Mensa's name in a mutually beneficial relationship would it have altered your consideration of this matter?"
He replied: "I don't think I would ever allow that kind of position to occur because it is a direct conflict of interest. I don't think any such operation could have been mutually beneficial."
Mr Duthie revealed that Sir Clive Sinclair, the inventor who is Mensa's chairman, was a director of Thought Promotions, a company set up by Mr Gale in 1982. He told the tribunal it was set up to make a profit for Mr Gale but used the Mensa name to promote the society.
Mr Sutton said he was not aware of the deal but accepted that Sir Clive must have had "full knowledge" that Mr Gale set up the firm.
The tribunal continues today.