`MI6 knew firm was selling arms to Saddam'

THE High Court in London will today hear allegations that the British security services encouraged a defence company to secretly channel arms to Saddam Hussein.

As diplomacy continues to avert another war with Iraq, MI6 documents are due to be presented revealing for the first time that businessman Stephan Adolphus Kock, who was on the board of Astra Holdings, had worked as a "support agent" for the security services for over 20 years.

Czech-born Mr Kock was also involved with defence contracts with Malaysia. Other documents due to be presented to the court include a letter from him about the matter to the then defence secretary George Younger in April l987.

The documents in question relate to a case in which the Department of Trade and Industry is seeking to disqualify the directors of Astra Holdings, which collapsed in 1992, for alleged malpractice and mismanagement of the company.

The directors, including the former chairman Gerald James, are claiming that the security services planted a spy on the Astra board and turned a blind eye to the company and its subsidiaries supplying arms to Iraq including components for the supergun. This was because the Iraqi regime was then seen as a bulwark against fundamentalist Iran.

Mr Kock supplied MI6 with information about Astra. He is said to have voiced his suspicion to the intelligence agency that a Belgian company, PRB, acquired by Astra was involved in supplying rocket propellants to the Iraqis. Mr James in turn claims the Government encouraged Astra towards PRB.

Mr Kock also had a relationship with MI5, the documents are believed to show. During the 1980s he was a senior consultant with the international division of the Midland Bank, and wrote to Mr Younger in this capacity.

Mr Kock joined the board of Astra in 1986. He won a power struggle with other board members including Mr James, who was ousted as chairman in March 1990. The documents are said to show he reported his victory to the security services. The DTI is not seeking the disqualification of Mr Kock as it considers him less responsible for any wrongdoing.

The documents are also told the Government of his suspicion about the supergun. But he contacted the police because he believed his home and his telephone were bugged by MI5. The security services, according to the documents, had not carried out such an operation.

The MI6 documents are said to show that the agency became concerned that Mr Kock was becoming unstable. He moved from Kent to Scotland and surrounded himself with security devices. One night in January 1990 he fired a gun over the head of two men who were repairing a van shouting " I am a soldier you know".