A jury was told yesterday that a businessman was "wrong" to plead guilty to charges of covering up an £11 million compensation package at a Birmingham-based company.
Bill Jeffrey pleaded guilty last year to seven counts of fraud relating to a failure to declare an £11 million ($18 million) settlement when he was the finance director at Transtec.
Jeffrey admitted that he did not declare the package, agreed with Ford, to the company board, auditors, shareholders or the Stock Exchange.
But Richard Carr, the chief executive of the company, which was set up by former Coventry North-West MP Geoffrey Robinson, denies the allegations.
Mr Robinson, a former Paymaster General in Tony Blair's Cabinet, left the company in May 1997 and is not implicated in the alleged fraud.
Carr's defence claims that the £11 million black hole in the accounts was a "cost down agreement" between TransTec and Ford which would secure future trade between the two companies.
Birmingham Crown Court heard yesterday that Jeffrey's admittance that the payment was a compensation deal does not in any way suggest the guilt of Carr, of Snitterfield Road, Bearley, Warwickshire.
Judge Derek Stanley, said: "It is relevant for you to know about that but it does not in any way decide the case in so far as Mr Carr is concerned.
"It establishes that as far as Mr Jeffrey is concerned it was his understanding that the settlement was a liability, and that was his state of mind.
"It does not establish that the agreement was, in fact a liability, and that Mr Carr appreciated that fact."
He also said the defence had claimed that "as far as Mr Jeffrey has acknowledged that it was a liability, he is wrong".
The trial continues.