Three Wickes' directors acquitted

Link: Wickes financial controller cleared of fraud

Henry Sweetbaum, chairman and chief executive of the Wickes group, Trefor Llewellyn, group finance director, and Terence Carson, finance director of subsidiary Wickes Building Supplies, had all been charged with fraudulent trading between 1994-1996.

Sweetbaum and Llewellyn were also charged with making a false statement to Wickes Group auditors Arthur Andersen in 1995.

Sweetbaum and Carson were similarly charged in relation to a 1996 statement.

The acquittals followed a five-year SFO investigation, which opened in November 1996 with support from the Metropolitan Police Fraud Squad.

The SFO alleged that the accounts were fraudulently overstated by £6.2m in 1994 and by £14.1m in 1995 by the use of a two-letter system. Under the system Wickes’ suppliers were requested to sign letters drafted by Wickes that did not outline the true nature of the supplier contributions that had been agreed.

The description of the supplier contributions in these letters, which were shown to Arthur Andersen, supported the inclusion of that income in the current year thereby falsely inflating the profits.

A separate letter, not shown to the auditors, was sent to suppliers setting out the true terms of the deal and which would have required the income to be spread in the accounts over several years.

The three defendants denied knowledge of the two-letter system and all three were found not guilty today on all counts.

Geoffrey Brian Battersby, who was the group financial controller, had already been discharged after the prosecution’s case ended, following a ruling that there was no case to answer. In the case of Leslie Rosenthal, the buying director of Wickes Building Supplies Ltd, the jury was discharged from delivering a verdict for legal reasons. He is to be tried by another jury next year.