The woman at the centre of a sexual harassment claim left a previous high-flying recruitment job when she fell pregnant from an affair with one of her senior managers, an employment tribunal heard.

Debbie Smith, 49, of Sutton Coldfield, has accused millionaire businessman Tim Watts, chief of the Pertemps Group, of sexual harassment when she was managing director of a subsidiary firm between September 2008 and June last year.

She was made redundant after the company she was running, CNA, made a loss of £250,000, the tribunal was told.

Mr Watts, who denies he called her a “sexy nurse” or asked her to call him as she took a shower, launched a blistering attack on the £90,000-a-year-executive as he gave evidence at a tribunal in Birmingham.

“What was a marriage made in heaven turned into a marriage made of hell,” he said of Mrs Smith’s working relationship with his company.

“We were looking into her history to see why she had been unsuccessful. During the investigation we realised something in the state of Denmark was not right.”

He claimed promises made by Mrs Smith when she took on the role about bringing business from her former position at firm Select, turned out to be bogus and that she had left another former employer after an affair with one of her bosses.

“She left under a cloud. She had an adulterous relationship and left when it became too difficult to hide because she was six months pregnant.

“There were two Debbie Smiths,” he added. “One who had a career and was doing well. However during the investigation we found she was a different Debbie Smith, the Mrs Smith we were dealing with was like Jekyll and Hyde.”

Gemma Roberts, representing Mrs Smith, asked Mr Watts if the investigation into the former employee had been carried out in vengeance for the allegations made against him.

“My reaction was one of supreme anger, justifiable and righteous anger, but we were trying to save a business that was £250,000 down,” he replied.

Mr Watts also told the tribunal an internal company investigation had found no evidence of Mrs Smiths claims, which also included him calling her “pretty” in front of colleagues, and him telling offensive jokes.

The tribunal continues.