Robinson criticised in DTI report on TransTec collapse

Geoffrey Robinson, the former Paymaster General, faced criticism yesterday in a report by the Department of Trade and Industry into the collapse of the engineering firm TransTec.

The inspectors said that Mr Robinson's "dominance of the group as executive chairman was not conducive to certain aspects of sound management and governance".

TransTec, which was founded by Mr Robinson, is also facing an investigation by the Serious Fraud Office after it went into receivership owing large sums to creditors, including £11m to Ford.

The report stated that Mr Robinson's oral evidence "swung from downright hostility and aggression to co-operation via irritation". However, the inspectors said the written evidence submitted by the Labour MP for Coventry North West was "valuable and by far the more helpful".

Mr Robinson was chairman and chief executive of the company from 1991 to November 1994 and then remained as non-executive chairman until May 1997. It collapsed in December 1999. The inspectors described Mr Robinson as "very hands-on" and "dynamic" as chief executive but added: "On the other hand, we think that Mr Robinson's dominance of the group as executive chairman was not conducive to certain aspects of sound management and governance.

"The finance function, for example, was not strong. Other board members noted 'uncomfortable differences' in the management accounts, which Mr Robinson appears to have tolerated. Mr Robinson does not appear to have fostered a culture of collective decision-making."

But the inspectors accepted that Mr Robinson knew nothing of the £11m claim against TransTec by Ford.

TransTec went into receivership in December 1999, after it became clear it could not keep up with payments to meet the claim against it by Ford. Its chief executive, Richard Carr, and finance director, Bill Jeffrey, resigned. There was controversy over the fact that the Ford liability was not shown in the company's results, and its lenders were not aware of it.

The DTI investigation mainly focused on the years after Mr Robinson left the company. The report concluded: "TransTec's demise was due to fundamental failings of executive leadership, exacerbated by poor corporate governance. It is an illustration of a dysfunctional and passive board of directors."

Mr Robinson told the inspectors, according to the report, that he felt he had put the right systems for corporate governance in place. He said yesterday: "The collapse of TransTec was a blow to many in the Midlands, particularly those that lost their jobs. I much regret this, but the DTI report demonstrates conclusively, as I have maintained throughout, that I had no responsibility whatsoever for the events leading up to TransTec's collapse. Those responsible are clearly identified in the report."