An international aid charity boss accused of securing lucrative contracts for his son created 'a culture of fear' amongst employees and was not a man to cross, a court heard.

Thomas Henderson, 64, the CEO of ShelterBox, allegedly ensured deals for camping and survival equipment were given to the companies of son John, 35, between 2007 and 2012.

Henderson set up the charity in his garage in 2000 to deliver humanitarian aid to the victims of man-made and natural disasters around the world.

He was awarded the OBE in 2010 for his work and HRH The Duchess of Cornwall became the charity's President and Royal Patron in August 2007.

But the charity, which received up to £20 million from donors to its base in Helston, Cornwall, was put at risk by 'Tom' Henderson for the financial benefit of his son, jurors were told.

When trustees of the charity, which specialised in providing relief packages to victims of disasters, began to ask questions they brought in Darren Gervis, 42, to set up 'sham' companies to hide the fraud, the Old Bailey has heard.

Peter Sykes, a former ShelterBox operations manager who has a long track record in the third sector, said: 'It was a great opportunity and there was a great need for ShelterBox, but there were a number of things that could have been so easily improved.

'For example the opportunity to chase institutional finance - from the government, from the EU, from other governments.

'But efforts to push towards institutional fund raising were just blocked, and there were huge issues to do with the management of people and hiring and firing.'

He added that there were also big problems relating to transparency, particularly around how contracts were awarded to suppliers.

'It's really important in our industry - people are giving up their earnings and I feel very strongly about this.'

Mr Skyes told the court how Tom Henderson created a 'culture of fear' amongst his employees:

'Loutish behaviour is not something I value. He created a culture of fear and intimidation.

'I have a lot of respect for Tom and it takes amazing tenacity and go-getting attitude to set up an organisation like that but it's not what he achieved but how he achieved it.

'Tom was virtually impossible, you can't cross Tom in any way - a disagreement with Tom's point of view would probably end in some form of sacking or resignation.

'I saw a lot of people come and go - it was not behaviour I was comfortable with.

'Any disagreement with Tom never went down very well and was normally received in a very hostile fashion,' he said.

'You need to demonstrate a level of competence and transparency and accountability, procurement is something we take very seriously.

'Normal practice, if you're spending millions of dollars or pounds, in the spirit of transparency, you have written down somewhere how things are done.

'For example how one makes value for money decisions - one doesn't necessarily go for the cheapest but you make a decision based on quality, availability etc.

'I've worked in many parts of the world where people have families ties - that might not be a [deal breaker] you just need to be very transparent about it and you need to articulate that.'

Mr Sykes said Thomas Henderson insisted on very expensive, top-of-the-range Vango tents in each box, without researching alternatives.

He also wanted heavy, inefficient wood burning stoves supplied by his son John, which were considerably more expensive than alternatives on the market, according to Mr Sykes.

Mr Sykes said that according to best practice; order, purchase and payment for goods would be handled by different departments within a large charity.

When asked to adhere to certain industry standards, Thomas Henderson would reply that they were 'unnecessary or too much money.

'So these things were always knocked back, no proper reasons given,' Mr Sykes said.

'If you're going to go for something that's more expensive you need to articulate a very clear value for money agreement.'

He added that in previous jobs he had been forced to sack people for failing to comply with transparency standards.

He said one of the few times the founder had paid attention to his ideas was one he raised the concept of 'transitional shelter' - midway between a tent and a house for the colder months.

'He started saying his son might have the expertise to start pulling together something on transitional shelter.'

Mr Sykes said that even after volunteers had told them repeatedly the wood stoves weren't really being used, Thomas Henderson still insisted they be included in the box.

'He said "No, this is what we put in the box, this is what we sell to the public" - he was normally very irate and hostile.

'Every one was aware of what was happening and most of us were very uncomfortable - this may be the right decision but if you can't demonstrate transparency it looks terrible.'

Prosecutor Walton Hornsby has told the court how Tom Henderson 'favoured his son at all costs and ultimately crossed the line into fraud.'

ShelterBox was established in 2000 with the help of the local Rotary Club to deliver humanitarian aid in the form of equipment and materials to disaster victims.

It had international affiliates in America, Australia and Europe and rapidly expanded with its premise of putting all the items needed for survival into robust plastic boxes to be sent to disaster zones.

Earlier the prosecutor said: 'It is a much celebrated charity and rightly so. The principle defendant, Thomas Henderson is the founder and formally chief executive officer of ShelterBox and in that capacity he authorised for a large number of supply contracts for his son, John Henderson.

'The authorisation of these supply contracts became increasingly controversial. It is the prosecution's case that when these were questioned by the management team at Shelterbox, John Henderson then recruited Darren Gervis to create various front companies in order to conceal the fact it was the chief executive officer's son who was the beneficiary of these large supply contracts.

'John Henderson was always the supplier of goods and services to Shelterbox and everything possible was done to ensure that would happen.'

He added: 'John Henderson and Darren Gervis gained financially and ShelterBox was exposed to a risk of loss in a variety of different ways.'

Gervis, of Meadowside, Mosterton, Beaminster, Dorset; Thomas Henderson, of Barbican Way, Helston, Cornwall; and John Henderson, of (8) Copper Hill, Hayle, Cornwall, deny conspiracy to commit fraud between 15 January 2007 and 31 December 2012.

The trial continues.