MATRIX Churchill, the UK based machine tool company whose activities led to the Scott inquiry, provided the Iraqi government with equipment which could be used for the development of nuclear weapons, according to a report in today's Financial Times.
The company, which was acquired by the Iraqi government in 1987 and was prosecuted in England on charges of exporting arms to Iraq, also knowingly deceived the British government about exports of equipment specifically and exclusively designed for military use in Iraq, the newspaper claims.
A court case brought by the British Customs and Excise against three Matrix Churchill directors collapsed in 1992 when it was revealed that the British government had implicitly encouraged the sale to Iraq of so called "dual use" equipment, capable of both peaceful and military applications, in breach of its own guidelines.
Mr Paul Henderson, the chief defendant in the trial, has argued that he was unjustly prosecuted. Mr Henderson, the former managing director of Matrix Churchill, has also maintained that he was opposed in principle to the sale of anything used in the manufacture of nuclear weapons.
Yet between November 1988 and April 1990 Matrix Churchill provided parts for a prototype nuclear gas centrifuge for uranium enrichment in Iraq, the Financial Times claims. The newspaper says a confidential report by the nuclear inspectorate of the International Atomic Energy Agency confirms that Matrix Churchill supplied components used in the Iraqi project.
When the order for the parts was placed by the Iraqi procurement network, they were said to be required for a compressor. Ironically, it was suspected within the company that the equipment for the project, known as K 1000, was missile related, although in reality it was for a nuclear application.
Initial consignments were described on export documentation as "goods: metal parts". Days after the Supergun scandal broke in April 1990 and four months before the Iraqi invasion of Kuwait, a final consignment was dispatched overland to Iraq. Mr Henderson is reported as saying yesterday that this went out against his instructions.
The Financial Times claims to have evidence that Mr Henderson had a meeting at that time with an M16 official using the name of John Balsom. The M16 account of the meeting says that Mr Henderson "is withholding the complete truth from us about this subject".
Mr Henderson explained to the Financial Times that he preferred not to give information to M16 about the K 1000 project until he was satisfied that he could give full and detailed particulars.
The report also says the Department of Trade and Industry was misled over another Matrix Churchill contract to build lathes for the Iraqis, which were specifically designed to machine sophisticated 155mm artillery shells.
The shells had a range far superior to anything available to British or Nato forces at the time. A false description of the use of the lathes was given on the export licence application form.