CITY INDEX, the spread-betting firm, alerted the authorities eight times about the activities of Wing Kit Chu, the accountant who stole £9m from the engineering firm Charter to fund his addiction to gambling.

Chu was jailed for five years in January after pleading guilty to theft. Over a five-year period the accountant stole £9,237,312 from Charter to cover his gambling losses.

Court documents filed by Charter to support a £9m High Court claim against City Index, reveal that the company’s compliance department contacted both the National Criminal Intelligence Service and the City of London Police fraud squad on eight separate occasions between 2000 and 2004 to raise concerns about how Chu was financing his run of losses.

In one e-mail City Index wrote: “Whereas we have no evidence of money laundering or any criminal damage, we are surprised at the ease at (sic) which Mr Chu is able to pay large sums at short notice to cover these losses.”

Despite the repeated warnings by City Index, Chu’s deception was only discovered after he handed in his notice in July 2004 and was asked to help his successor resolve some inconsistencies in the past three months’ transfers.

After repeatedly failing to explain the discrepancies, he finally sent an e-mail to one of his bosses on August 18 effectively confessing his guilt. He turned himself in at Belgravia police station in central London the following month.

City Index is expected to defend itself against Charter’s claim. The firm believes that it acted properly at all times.

Charter, which has managed to recover only £5m from its insurers, refused to comment.

Described as quiet and unassuming, 32-year-old Chu squandered most of the money betting on the future performance of the FTSE and Nasdaq indexes. Originally from Hong Kong, he stole amounts between £2,000 and £250,000 at a time by logging on to in-house computers and using the passwords of company executives on more than 100 occasions.