US car giant Ford received part of an £11 million compensation settlement from a Midland firm through discounted payments for its products made under an "atmosphere of secrecy and concealment", a court heard yesterday.

Birmingham-based TransTec, founded by Coventry North West MP and ex-Paymaster General Geoffrey Robinson, had paid £5 million of the debt in 1997 through 'debit notes' sent by Ford to its supplier, Birmingham Crown Court heard.

Anthony Hacking QC, prosecuting for the Serious Fraud Office, said "deliberate concealment" at TransTec involved the £11 million ($18 million) settlement being hidden from shareholders, auditors, the company's board and the Stock Exchange.

He claimed the figure was agreed in 1997 after a faulty product manufactured by TransTec caused delays in the rollout of Ford's new Explorer model over the previous years.

TransTec chief executive Richard Carr (53), of Snitter-field Road, Bearley, Warwickshire, denies seven counts of fraud.

The jury was told Bill Jeffrey, the company's finance director, has already pleaded guilty to seven similar counts against him. Mr Robinson left the Birmingham-based company in May 1997 and is not implicated in the alleged fraud.

Mr Hacking said $5 million was paid by the end of 1997, $7 million by the end of 1998 and $6 million by the end of 1999. The last instalment was the only one not paid.

He said the $5 million 1997 payment was evident in debit notes that were being sent by Ford to TransTec.

Mr Hacking said: "That was how it was done - through the debit notes sent by Ford to TransTec, so Ford, instead of paying $Xm for the parts, had paid $Xm, less $5 million."

TransTec had started production of overhead camshaft cylinder heads for the engines of the Ford Explorer in late 1995. Following a fault, production stopped briefly but started again in May 1996.

The delays caused Ford in Europe and the US to lose $101 million in costs.