THE chairman of a glass company, once lauded by the Government as an inspiration for the region’s green energy revolution, has stepped down after paying millions to the business without telling its board.

John Kennair, who was also acting chief executive, paid £3.97m into the accounts of Romag last year to offset money the business was owed by clients.

But he failed to formally disclose the transaction until earlier this week.

Mr Kennair has confirmed he has no connection with the clients and does not expect to receive any reimbursement from Romag, of Consett, County Durham.

Stock Exchange rules state that companies must issue notification without delay of a change in the company’s finances that could have a substantial impact on its share price.

It would also be normal practice for the company’s financial director to know about such a large transaction.

Romag’s board stressed it was confident finance chief David Banks was unaware of the payment, and it had full confidence in his actions.

On Monday afternoon the company’s shares were suspended from trading on the London AIM stock market.

Non-executive chairman David Gray has been appointed as chairman and accountants have been asked to discover if Stock Exchange rules have been breached.

If a breach has occurred then it is normal practice for the Stock Exchange to undertake its own investigation.

The police are not involved at this stage, but a spokesman said: “In cases such as this, the regulatory body would carry out its own investigation and notify the police should any criminal allegations come to light.”

In a statement, Romag said Mr Kennair had made the payment “which at the time he believed was in the best interests of the company”.

Romag employs about 180 people in its factory in Leadgate, near Consett.

On a visit in 2009, Nick Brown, then Minister for the North-East, hailed Romag as one of the firms set to make the region a world-class centre for renewable energy.

Regional development agency One North East helped to fund Romag’s plans as it went from being a maker of bulletproof and blast-resistant glass to become a major player in the solar energy market.

Mr Kennair, 66, who was awarded an MBE in 1990 for services to the specialised glass industry, has agreed to stay on as chief executive with the full backing of the board, until his replacement is appointed. The board also plans a shake up of its reporting function with the appointment of a financial controller.

Mr Kennair came out of semi-retirement last summer to take over day-to-day running of the business after the death in June of its head, Lyn Miles.

In December, he revealed that the company was engaged in a multi-million-pound dispute to recover money it was owed from a deposit paid to one of its long-standing suppliers.

A business contracted to supply Romag with cells for solar panels said it no longer provided the type of cells detailed in the agreement, and was demanding that Romag accept a different model.

At the time, Mr Kennair expressed his determination to pursue the recovery of money and reflected: “Hopefully, this is the last of the bad news.”

In spite of its recent difficulties, Romag reports strong demand for its products, particularly in the solar panel sector, boosted by the Government’s renewable energy feed-in-tariff scheme.

It has won several highprofile contracts, including providing solar panels for the buildings on the site of the Glastonbury music festival.