THE former finance director of a company set up by Geoffrey Robinson, the Labour MP, faces up to seven years in jail after pleading guilty to fraud.

Bill Jeffrey, who was head of finance at TransTec, the specialist engineering group that collapsed in 1999 with debts of about £100 million and the loss of 4,000 jobs, will be sentenced tomorrow at Birmingham Crown Court.

Jeffrey, who pleaded guilty to seven counts of fraud, had been accused, along with Richard Carr, TransTec’s former chief executive, of concealing an £11 million hole in the company’s accounts.

Mr Carr, who had always denied any wrongdoing, was acquitted last week of seven counts of fraud.

The court’s verdict came at the end of a three-month trial, and a three-and-a-half-year investigation, which is estimated to have cost the taxpayer £3 million.

The prosecution had alleged that Mr Carr and Jeffrey concealed an £11 million compensation payment made to Ford, the American carmaker, because of fears that it would undermine TransTec’s future expansion plans. The sum was said to have been paid after TransTec failed to meet a contract to supply cylinder heads for Ford Explorer engines in the mid-1990s.

Mr Carr, a Cambridge University scholar who had made his name at Tomkins, the engineering group, argued that the money was a “cost-down payment” for future trade between the two companies and that there was no need for it to be shown in the accounts. He maintained that he had acted honestly.

The defence argued during the trial that the former finance boss had made a mistake when he pleaded guilty.

The collapse of TransTec in 1999 triggered an investigation by the Department of Trade and Industry (DTI) and, in October 2003, the department raised concerns about the conduct of senior management at the company.

The affair has also been investigated by West Midlands Police’s economic crime unit, the Serious Fraud Office (SFO) and the Joint Disciplinary Scheme (JDS), the accountancy watchdog. The JDS investigation is still continuing.

Mr Robinson, the MP for Coventry North West, set up TransTec in 1991, and was chairman and chief executive until 1994, when Mr Carr took over.

Mr Robinson, the former Paymaster General, left the company in 1997 to focus on his political career as new Labour took power. He has not been implicated in the alleged fraud and was also cleared by the DTI investigation.

The SFO said yesterday that all parties had co-operated with the investigation, with Jeffrey returning to Britain from his home in Australia to be interviewed by DTI investigators.

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