The fraud trial of ShelterBox founder Tom Henderson has heard how he awarded numerous supply contracts to his son John through various companies.

Thomas Henderson, of Barbican Way, Helston; John Henderson, 35, of Copper Hill, Hayle, and Darren Gervis, of Meadowside, Mosterton, Beaminster, Dorset; are on trial at the Old Bailey where they deny conspiracy to commit fraud between 15 January 2007 and 31 December 2012.

This afternoon the court heard the first significant confrontation between trustees and then chief executive Thomas Henderson came in November 2008.

The previous month his son John Henderson had been handed a £534,000 contract to supply 10,000 wood-burning stoves to the charity, prosecutor Walton Hornsby alleged.

John Henderson had demanded half of the total figure, £263,200, up front payment to his company Camping Solutions Ltd, who had developed the stoves with Gate International.

The prosecutor said the total mark-up on the items was 60 per cent and his explanation that he needed the money to pay Gate Internation and to buy steel was not true.

"Rumours were circulating in ShelterBox about the circumstances of this order," he said.

"One of the rumours was that it was being brought about to enable John Henderson to build a house in Cornwall or to assist him in buying a factory, and hence improper."

Trustee James Kingston stood up to Thomas Henderson at a board meeting over the cheque and even suggested he should be suspended until the issue was resolved.

But a motion defeated Mr Kingston, who retired shortly after.

The prosecutor said the deal was "indicative" of how the Henderson's had come to think at this time.

"John Henderson would be designing the stoves, there was no question he would be the designer of them, his stoves would be chosen and there was no question of anyone else's stoves being compared."

He told jurors the destination of the funds "appears to support the suggestion that Thomas Henderson needed the money at that time."

The court heard the burners were used in the wake of the Haiti earthquake, but were problematic because there was virtually no wood or natural fuel available in the disaster-hit country.

"Thomas Henderson would have none of it, no criticism of his son John's products and to the surprise of quite a few an order for a further 3,000 stoves was made in April 2010," the prosecutor continued.

"The opinion of some in ShelterBox is that this had been railroaded through."

The court heard in the fallout of the wood-burning stoves deal the charity went through a "professionalisation" process, including the formalisation of the Camping Solutions Ltd payment in the end of year accounts.

One major donor, who spotted the payment, withdrew her support for the charity and made a complaint to the charity commission.

Questions were again raised when a trustee spotted a £20,000 invoice for another of John Henderson's companies, Ocean Fabrications.

It resulted in a letter from the chair of the board of trustees warning Thomas Henderson of the dangers of breaching the charity's new policy on "related party transactions."

"Thomas Henderson never seems to have accepted or understood  that continuing to use John Henderson could cause serious damage to Shelterbox and that his continuing involvement would have to be severely constrained," said the prosecutor, who described the letter as an important milestone.

"The prosecution say it instigated Thomas Henderson and John Henderson to go on to devise increasingly elaborate devices to circumvent this policy to conceal the fact it was John Henderson that was continuing to be the supplier."

Mr Hornsby said this resulted in the changing of company names from Camping Solutions Ltd to Camping Solutions Online Ltd in early 2010, when Gervis entered the picture as company director.

The court heard items would be supplied by John Henderson, but invoiced by Camping Solutions Online Ltd, through Gervis in return for a commission.

In one £192,465 deal Gervis received a 3 per cent cut, £5,875, of the total amount "simply for lending his name," it was said.

"Camping Solutions Online Ltd was a sham, it was a fraud, it was simply a device to hide the fact it was John Henderson who was supplying the items."

"That pattern was established in August 2010 and continued for a year."

The new company supplied more than £500,000 of goods to the charity, but by autumn 2011 it was decided to change the name of the company to Found International.

Gervis continued to be the sole director and  shareholder of the company.

In early 2012 Thomas Henderson was quizzed about his son's involvement in Found International in relation to an order for 2,000 tents, but assured trustees he was not connected, it is claimed.

But it came as a "bombshell" to those at the charity when Gervis revealed John Henderson was financially involved in the company, jurors were told.

"When Thomas Henderson was confronted with that he was dismissive his son was involved and became quite angry," said the prosecutor.

A decision was taken not to proceed with the order, but Mr Hornsby said: "An attempt to include John Henderson had failed, but not for want of trying and in the face of repeated warnings.

"The fact they are prepared to tell lies about what they were doing we invite you to consider whether that is an indication as to whether what they were doing was wrong, or to put it another way, dishonest."

Jurors heard Thomas Henderson tried to brush off the scandal, but it was "the last straw."

"Ultimately in the middle of 2012 Thomas Henderson ceased to be the chief executive officer and ceased to have any executive role in ShelterBox and was effectively excluded from it," said the prosecutor.

The Charity Commission was informed and as the extent to John Henderson's involvement emerged the police became involved

Each of the three defendant's was arrested in June 2013 and later interviewed.

Mr Hornsby added: "All of them during the course of these interviews denied there was a conspiracy to defraud and none of them accepted that their conduct could in any way be categorised as dishonest.

"Their view was that they only had the best interests of the charity at heart and they simply couldn't see or accept it could be categorised as being dishonest."

Thomas Henderson did accept their had been a "blurring of boundaries', but insisted it was not intentional or criminal."

The trial continues tomorrow.