FAILED construction boss Tony Budge was accused last week of dishonestly squandering his companys cash on high living and extravagant hobbies while the firm headed for a spectacular crash that cost creditors 96 million.
But his lawyer told Leeds County Court that Mr Budge and two co-directors had been selected for blame from a boardroom that had included his brother Richard Budge who now reigns supreme over the coal industry.
Tony Budge, his wife Janet, and former right-hand man Michael Yates, are facing a court action by the Department of Trade and Industry to ban them from being company directors.
The case stems from their
alleged mismanagement of family builder A F Budge, which
collapsed in December 1992.
Mr Budges barrister, Peter Irvin, told the hearing that other directors, banks and a team of highly-paid professional advisers knew of the transactions now being questioned.
He said: If it was not all right, how come Mr Budge, his wife and Mr Yates are the only people who are being accused of impropriety? Mr Budges brother Richard signed the contract for the purchase of almost the entire coal industry on the same day that the Official Receiver launched these proceedings, by coincidence, presumably.
Mark Cawson, for the Official Receiver, alleged that Mr and Mrs Budge used 25 million of company money to make interest-free loans to hobby companies in the A F Budge group.
The court heard these firms were set up to further the couples interests but did not benefit its trading arm. It is alleged that:
5.5 million was lost in loans to a Bermuda-based firm during a speculative investment in hunting for sunken sea treasures;
8.27 million was lent to another firm handling Mr Budges military collection of tanks, guns and a scud missile; and
900,000 was diverted from the company pension scheme to prop up the ailing group.
Mr Cawson also alleged that Tony Budge and finance director Michael Yates had evaded repayment of directors loans from the firm.
All deny the allegations.
The case was adjourned to allow the defence to be prepared.