GEORGE Reynolds revealed in court yesterday that his chipboard business handed over £900,000 to Darlington Football Club - days after writing off a previous £6m on the grounds that the club would never be in a position to pay it back.

The former Quakers chairman was giving evidence on the second day of a public examination at Teesside County Court into the collapse of George Reynolds UK (GRUK).

He was asked repeatedly by barrister Anthony de Garr Robinson, representing GRUK's liquidators Deloitte and Touche, why the money was loaned to the club. Mr Reynolds said: "The reason I probably did it was because I put money in. Another reason is my main object was to get that stadium complete."

Mr de Garr Robinson said: "There was a chance that Darlington might not be able to repay it."

Mr Reynolds: "I couldn't see that it would not."

Mr Reynolds told the court that work on the car park at the Reynolds Arena was only completed after he "did a swap" with the contractors, Hall Construction.

He claimed Hall's directors agreed to carry out the work in exchange for his engineering yard at Coundon, County Durham, because he had run out of money.

The Coundon site had initially been acquired by him, he said, by doing another swap for a house he owned.

Mr Reynolds was questioned about the sale of GRUK's plant and machinery to Vertex in 2002.

He said he dropped the price of parts of the chipboard business to achieve a quick sale. Accounts showed that parts of GRUK were sold for more than £2m when they had earlier been valued at nearer £6m.

GRUK eventually went into voluntary liquidation, leaving debts of £4.7m. The public examination, called to help Deloitte and Touche recover money for creditors, was adjourned by Judge John Bailey and will sit again at a date to be set.

In the meantime, Mr Reynolds must produce paperwork he claims to have on payments to creditors, after which he will be asked to sign a transcript of the proceedings.

He said after the hearing he was "delighted" to have been able to explain his business dealings in open court.

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