Banker blew whistle on Wickes

A FORMER Warburgs banker blew the whistle on an alleged £22m fraud at DIY group Wickes, Southwark Crown Court was told on Wednesday.

The jury heard that Stuart Stradling joined Wickes as finance director in 1995. He told chairman and chief executive Henry Sweetbaum that he needed time to learn the job and, because he was not an accountant, he would be unable to do the books.

Trading at Wickes was poor and Stradling had problems with Sweetbaum's management style. Anthony Hacking, QC, prosecuting, said that while Stradling was looking at contracts of six suppliers, he got a phone call from Holland, where a drawer full of false contract letters had been found.

When he found profits had been overstated, Stradling met Wickes' advisers Warburgs, and accountants Arthur Andersen were called in. The shares were suspended on the Stock Exchange the following day.

Hacking claimed: 'In a day, the value of Wickes fell from £500m to nothing. It survived only because of a £57m rights issue in 1997.'

The jury heard how the fraud was developed with a two-letter contract system, one for the supplier and another for auditors. Five former Wickes staff plead not guilty to six charges of fraudulent trading and giving false statements to auditors - chief Henry Sweetbaum, accountants Trefor Llewellyn, Geoffrey Battersby and Terence Carson, and buying director Leslie Rosenthal. The case continues.