A FORMER director of an Oxfordshire company has been jailed for his part in a £1.6m fraud.

Edwin Dayan was given a 12-month sentence at Oxford Crown Court yesterday after putting non-existent revenue through the accounts of Witney firm Torex Retail in 2006.

His former colleague Christopher Ford was given a sixth-month jail term, suspended for two years, and ordered to carry out 200 hours’ unpaid work.

Following a two-month trial, both men were convicted by jurors last month of conspiracy to defraud.

Torex Retail, which employed more than 100 people in Witney and Banbury, collapsed in 2007 but Judge Patrick Eccles stressed this had nothing to do with the two men’s actions.

The Serious Fraud Office is still investigating the company’s downfall, which caused Dayan to lose about £8m.

The jury heard £756,000 and £900,000 of false income was put through the accounts of XN Checkout, a wholly owned subsidiary of Torex Retail, which provided point-of-sale equipment to the hospitality trade.

XN had a £2.1m-a-year contract with pub chain Mitchells & Butlers, but that ended in 2000 when IBM took over the contract. However, XN was kept on as a sub-contractor, but IBM began reducing its annual payment to XN from £2.1m in 2000 to 1.2m by 2006.

It was this shortfall that was plugged by phantom payments from Mitchells & Butlers to XN.

Judge Eccles said it was an unusual case, because no companies or shareholders lost any money. He told the pair: “There’s no suggestion that either of you made any financial gain or were motivated by a wish for financial gain. It was clear to me that you did not have personal gain in the forefront of your minds at all.

“This was a fraud where revenue was dishonestly recognised or accrued in circumstances where there was a risk to all shareholders, even though no loss was incurred.”

He added that such behaviour “diminishes confidence in the accounts of companies”.

Dayan, 58, of Christchurch, Dorset, was told to pay £75,000 in costs and was banned from being a director for four years.

Ford, 47, of Olney, Buckinghamshire, was told to pay £2,000 costs and banned from being a director for two years.