Lord Black's deputy at Hollinger International arranged $9.5 million (€7.86 million) in tax-free payments to himself, Lord Black and two others by incorrectly telling the company's general counsel the money had been cleared by the board, investigators have been told.

Mr David Radler, who until last month was the newspaper publisher's chief operating officer, was paid about $4.3 million of the $9.5 million in 2000.

The money was the largest tranche of $15.6 million in payments to the four executives that the company recently admitted had not been approved. Lord Black, who stepped down as chief executive last month, also received about $4.3 million of the $9.5 million.

The money was tax-free because it was styled as "non-compete" payments, which qualify for tax breaks under Canadian law.

Several buyers of Hollinger titles paid non-competes to prevent the group and, in some cases, individual executives, from competing with them.

The $9.5 million related to the sale of Hollinger newspapers to Community Newspaper Holdings Inc (CNHI) in Alabama for about $98 million, but several people close to the investigations say the acquiring company had at no stage requested non-compete arrangements.

Mr Mark Kipnis, Hollinger's general counsel at the time who also quit the company last month, has told investigators he arranged the $9.5 million after Mr Radler incorrectly told him the non-compete had been approved - (Financial Times Service)