A British whistleblower who exposed alleged corruption at a European aid agency faces the sack after he told EU fraud investigators that his boss was involved in the scam.

Terry Battersby, 53, from Manchester, has been removed from his job as head of information technology at the Brussels-based Centre for the Development of Enterprise (CDE) and placed on a short-term contract.

Battersby uncovered evidence that the agency’s former director, Hamed Sow, who is now the energy minister of the west African country of Mali, approved the award of lucrative European Union contracts to a company in which he had a financial interest.

Sow is alleged to have arranged for the CDE to back a loan of nearly £3m to a textile company in Mali, without disclosing that he owned up to 20% of the company and was receiving payments from the firm.

The CDE, set up to support the private sector in poor countries, receives more than £14ma year in taxpayers’ money from the EU.

Two years ago Battersby discovered documents showing Sow’s apparent conflict of interest, and passed them to the EU’s antifraud investigators.

Brian Simpson, a Labour MEP, said Battersby had been the victim of a “witch-hunt” for having the courage to speak out. Battersby, who has worked at the CDE for 16 years, is now on a temporary six-month contract, after being denied a permanent job.

Documents seen by The Sunday Times establish that in 2001 Sow received £315,000 for advising Fitina, a cotton processor in Mali. He owned at least 15% of Fitina at the time when the European Investment Bank (EIB), backed by Sow, gave the company a loan of just under £3m.

Details of Sow’s links with Fitina emerged in a report by the fraud-busters last week. A spokesman for the EIB said: “If we had been aware of the alleged financial relationship between Sow and the company, the loan would not have been paid.”

Speaking from Mali last week, Sow denied any wrongdoing and blamed the allegations on a “disgruntled British employee”.

He said he had entered into a contract with Fitina at a time when he thought he would be returning to Mali to run the firm and had ended his relationship with the company about four years ago.

Mali is one of the poorest and most corrupt nations on earth. Sow is widely tipped to be its next prime minister.

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