Businessmen at centre of arms-to-Iraq affair win compensation

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Indy Politics

David Blunkett, the Home Secretary, has agreed to compensate two of the businessmen at the centre of the arms-to-Iraq affair.

Nine years after their trial collapsed, Paul Henderson and Peter Allen have been told they will receive ex-gratia payments for wrongful prosecution.

On 9 November 1992, Mr Henderson, Mr Allen and Trevor Abraham, executives from Matrix Churchill, a machine tools manufacturer, based in Coventry, walked free from the Old Bailey after the Government admitted it had known what they were doing and had encouraged them.

Yesterday, the Home Office said Mr Blunkett had agreed to make an ex-gratia compensation payment to Mr Henderson and Mr Allen. The men's lawyer refused to say how much they would receive but it is thought to be substantial. Matrix Churchill folded because of the prosecution and their reputations were severely damaged.

Their solicitor, Lawrence Kormonick, of Dechert, welcomed Mr Blunkett's move. "I look forward to a decision on the level of compensation that reflects the distress my clients have suffered. They are keen to put this matter behind them."

Mr Blunkett's decision, while being sought by Mr Kormonick for some time, was unexpected. The timing is likely to be seen at Westminster as another attempt by ministers to rid the Government of potentially awkward stories under the shield of war.

It is the first ex-gratia award to be made to any of the defendants involved in the arms-to-Iraq cases. Other claimants are expected to follow suit and the total payout could run to many millions. Several other businessmen had their careers and lives ruined by a series of prosecutions brought by HM Customs and Excise for making illegal sales to Iraq. They always claimed they were acting with the approval or knowledge of government security services.

Mr Blunkett's move may mark an attempt by this Government to draw a line under one of the more unsavoury episodes in Whitehall history.

Mr Henderson now runs an engineering firm in the Midlands and Mr Allen is working in sales and marketing in the US. "My clients are both extremely grateful to the Home Secretary," Mr Kormonick.