Regan 'duped finance director

Andrew Regan, the former chief executive accused of orchestrating a £2.4m corruption scandal, duped his finance director into releasing cash to set up offshore bank accounts for the payment of bribes, a jury was told yesterday.

Mr Regan is charged with stealing funds from his own company - food manufacturer Hobson - in 1995 in order to bribe two senior executives at the Co-operative Wholesale Society into extending a lucrative supply agreement with 800 Co-op stores. Allan Green, former CWS chief general manager, and David Chambers, former chief buyer, are charged with corruption over two £1m payments into offshore accounts.

Yesterday, Hobson finance director Peter Hallet told a jury at Snaresbrook crown court in east London that he would never have authorised a payment to a firm of solicitors had he known the money was allegedly to cover the cost of setting up two off-shore companies controlled by Mr Green and Mr Chambers. Earlier in the trial, Douglas Day QC, prosecuting, had told the jury that a solicitor, Paul Thomas, had used a cheque for £4,500, signed by Mr Hallett, to set up two British Virgin Islands-registered companies, Pitchblend and Monavale - both with bank accounts in Jersey, controlled by Mr Chambers and Mr Green respectively.

Mr Thomas is charged with aiding and abetting the payment of bribes. Mr Hallett also told the court that two months after Hobson won the supply agreement extension Mr Regan had pleaded with him to help cover up details of negotiations.

Mr Hallet said that he had agreed to lie to the auditors and non executive directors in March 1995, telling them, at Mr Regan's request, that he had spoken to Mr Zimet about negotiations with the CWS. Mr Hallet told the jury that this had been "a gesture of support and solidarity with Mr Regan", who he trusted to be pursuing "a good deal for shareholders".

All four defendants deny the charges. The trial continues.