International Military Services Ltd (IMS)

International Military Services Ltd (IMS) was created in the 1970s by Sir John Cuckney from the military sales arm of the Crown Agents and became a company wholly owned by the Ministry of Defence (MoD). Cuckney became Chairman and served until 1985.

At that time its main business was supplying Iran with ammunition from the Royal Ordnance, and with military equipment manufactured in the United Kingdom by companies such as Vickers.

In 1985, through Sir John Cuckney, IMS placed orders with Allivane International Limited for large consignments of ammunition and a wide range of equipment, some of which would be manufactured in the United Kingdom by the Royal Ordnance and Astra Defence Systems. The items would be exported to a proxy end user with IMS not appearing on any of the paperwork. Finance for the Contracts would be through the Defence Equipment Finance Department of Midland Industrial Trade Services.

According to Terence Charles Byrne Snr, Director of Allivane, Sir John Cuckney set up the Defence Equipment Finance Department specifically to organize payment for equipment being supplied to Iran but by that time International Military Services (IMS) was increasingly involved in Iraq.

Having Sir John Cuckney, one time Director of the Midland Bank, as Chairman, it is not surprising that IMS was a customer of one of the Midland Bank's City Branches and a number of IMS' transactions were financed by the Midland Group under various facilities and structures.

From 1971-76, the government of Shah Mohammad Reza Pahlavi of Iran ordered 1,500 FV4030/1 Chieftains and 250 FV2404 armoured repair vehicles, which retrieve damaged tanks from the battlefield. The deal was made through IMS and paid for ($650 million) up front. All vehicles were manufactured by the Leyland Co. and Britain's state-owned Royal Ordnance Factories. By the time of the regime change in Iran Britain had delivered only 187 of the Chieftains. Iran wanted their money back for the non-delivered tanks which led to a 30 year court battle between Iran and IMS.

On 3rd March 2010 the following question was asked in Parliament:

However, I asked my officials to consult the managing director of IMS about this case. His advice is that discussions between the two parties continue, and are leading to resolution of all of the outstanding issues.

I will update this House when these matters are fully resolved, and it is my intention at that time to wind up IMS Ltd."

The matter was resolved at the end of April 2010 but as yet there is no evidence that IMS has been wound up.