Aitken's fellow directors question arms denial

Minister backed by Major as he tells MPs he did not know guns' destination

BY CHRIS BLACKHURST

TIM LAXTON

and COLIN BROWN

Former board members of BMARC, the arms company at the centre of the storm surrounding Jonathan Aitken, Chief Secretary to the Treasury, were divided yesterday over their level of knowledge of the contract to supply naval guns to Iran via Singapore.

Mr Aitken, who received backing from the Prime Minister in the Commons, has said he had no recollection of "ever having heard about Project Lisi [the deal's codename] or read about it in company reports" while a director of BMARC. He has denied he knew the guns were destined for Iran.

Yesterday, the Independent contacted four former directors of BMARC. Gerald James, the former chairman, reiterated it was "common knowledge" the weapons were going to Iran.

Jim Miller, the former finance director, said: "I do not disagree with that." Mr Miller said that while Iran was never mentioned in the boardroom, "we'd heard rumours they were going to Iran".

He added that Major-General Donald Isles, a former director who was in charge of the project, had specifically been asked by others inside the company about the destination of the guns. He replied that the order "had UK [Government] approval".

Gen Isles, said Mr Miller, had said there was "nothing controversial about a contract with Singapore. We were informed by Donald Isles everything had been approved and cleared by the Government. The board did not need to go further...I certainly knew about it probably being shipped to Iran."

Another director at the time, who did not want to be named, said he was aware of rumours the guns were destined for Iran and there were discussions inside the company about their final destination. He said monthly reports detailing BMARC's order book and progress on orders, including Project Lisi, were made available for every director at the board meetings.

Gen Isles, meanwhile, admitted to having heard "certain rumours" while at BMARC that the guns were heading for Iran. "There was the odd rumour the guns were going to Iran," he said. The rumours were passed on by word of mouth around the company. He added: "As far as we were concerned, they were going to Singapore, that is all there is to it."

None of the directors contacted by the Independent have denied that Mr Aitken received the monthly board reports which clearly mentioned Project Lisi.

Stephan Kock, another ex-BMARC director, told Channel 4 News, that he fully supported Mr Aitken's position and knew he would do nothing to harm the interests of the UK. Mr Kock went on: "All contracts would be discussed in as much as when you attended [board meetings]... they were passed around so you could look at them and ensure you didn't see anything out of the ordinary ... but that's as far as it goes."

Sir Richard Scott, head of the Scott arms-to-Iraq inquiry, yesterday returned papers on the BMARC controversy that Mr Aitken had sent to him. He said it was outside his terms of reference and he could not give Mr Aitken "any opinion or conclusion about the knowledge which you may or may not have had about Project Lisi". Sir Richard said he had been aware of Project Lisi "for some considerable time" and evidence presented to him suggested that it concerned exports to Iran.

At Westminster, Mr Aitken weathered a storm of calls from Labour for his sacking and won John Major's strong support. A spokesman for Mr Aitken said he was considering legal action against Gerald James, the former chairman of BMARC.

Mr Aitken led a spirited counter-attack as Labour MPs called for his resignation. With Mr Major's backing, Mr Aitken was given a show of support by Tory MPs, who waved their order papers and cheered when he brushed aside questions about his fitness for office. Mr Aitken accused Mr James of being "bitter" and "isolated" in his allegations, which were disclosed in the Independent.

The Prime Minister's office said Mr Aitken had Mr Major's support and, in the Commons, Mr Major rejected the calls for Mr Aitken's sacking. "He has made his position absolutely clear. No evidence has been found to counter that either by the Independent newspaper or anyone else," he said.

But Jack Cunningham, the Shadow Trade and Industry Secretary, who wrote to the Prime Minister demanding an inquiry, was not satisfied. He said: "It would be better for Mr Aitken if he was independently cleared of these questions."