The boss of a listed company who was slammed by a High Court judge over a “fraudulent” business deal walked away from the firm with a pay-off of nearly £500,000.

Hampson Industries’ former chief executive Kim Ward stepped down last year before the court case that saw his behaviour branded as “truly extraordinary” after the Brierley Hill-based firm sold a subsidiary without telling the buyer that it had just lost its biggest customer.

According to the company’s latest accounts, Mr Ward received compensation for loss of office of £475,755 on top of his salary, pension contributions and taxable benefits of £147,718 for the year up to his resignation.

As well as the court case, Hampson has also seen its share price slip through the recent challenging economic period.

The last year has seen the company’s share price fall from a high of 61p a share in August last year to a low of 18p a share after issuing a profit warning.

It then jumped almost 30 per cent at the back end of last year after Hampson secured its largest ever tooling contract, but shares have since slipped back and are trading around 21p per share.

Shareholder and Midland businessman Graham Hampson Silk, whose father founded Hampson Industries, said it was time for the company to return to the principles that had seen it grow into one of the region’s premier companies.

“For years, Hampson had an excellent reputation but recently the company has had a track record of failure with underperforming management only being shored up by fund raising through placings on the stock exchange," he said.

“Unfortunately, these funds seem to have been finally used up and, despite all this fund-raising, the share price is now floundering.

“Apart from being a reward for failure, the pay-off seems to be particularly inappropriate given the strong criticism by the judge in the case that Hampsons lost following the automotive business sale.

"I can only hope and assume that the new management will learn lessons and that the business will now be run properly in the future.”

The High Court case earlier this year saw executives at Hampson Industries – including the financial director Howard Kimberley who has also since left the business – accused of agreeing to sell Hampson Precision Automotive (HPA) for £3.1 million to Erlson Precision Holdings without disclosing the fact that it had lost its contract with the company’s largest client.

Mr Ward testified in court that, while he had been told by the boss of Cummins Turbo Technologies of its intentions, he believed it was merely a negotiating tactic.

The judge accepted that he did not see the formal paperwork ending the two companies relationship until after the deal was done with Erlson.

Nevertheless, Mr Justice Field described it as “truly extraordinary” behaviour for the chief executive of a publicly listed company.

Mr Ward, who the judge said “knew all too well” what Cummins’ termination would do to HPA’s prospects, “kept silent” about it, with the result that potential buyers of HPA would continue to rely on misleading sales forecasts – and that, ultimately, Erlson Precision Holdings had paid £3.1 million for HPA on the basis of “false and misleading” sale forecasts and that the sale “was achieved by fraudulent misrepresentation”.

Ruling in favour of Erlson, the judge gave the investors the option of returning HPA back to Hampson with a full refund and interest. In the end both parties agreed to the HPA remaining in Erlson ownership with Hampson paying a further a £1.5 million to Erlson as well as a contribution towards its legal costs.

The court case brought to a close a challenging period for the company that also saw Hampson challenged at its AGM last year by industrial heavyweight David Groves – a Hampson shareholder as well as the driving force behind Erlson – after Mr Kimberley did not take up his entitlement to shares of around £11,000 when the company was attempting to raise £60 million from shareholders.

Hampson defended Mr Kimberley, saying the firm had acted on advice that it was not necessary to take action after the oversight came to light.

“The fact that Howard Kimberley did not subscribe for his entitlement under the open offer was an administrative oversight,” said a statement issued following the AGM.

A spokesperson for Hampson said: “Kim Ward announced his decision to resign from the board of Hampson Industries on April 6, 2010.

‘‘Following his resignation, the board agreed terms of settlement consistent with his contractual entitlement after 10 years of service in the company.

‘‘This was unrelated to the subsequent litigation case against Erlson.”