Wickes jury told of bogus letters

FIVE former executives at DIY group Wickes used fraudulent accounting to overstate profits by £22m, a court heard on Tuesday. The jury at Southwark Crown Court, in London, was told that bogus letters were shown to auditors Arthur Andersen describing contracts with suppliers that differed from reality. Wickes had been in trouble since it took over Hunter Timber in 1998.

Anthony Hacking, QC, prosecuting, said chairman Henry Sweetbaum was the driving force behind a disastrous acquisition deal that landed Wickes with £250m debt and ultimately led to the fraud.

The company signed three-year golden hello deals with suppliers conditional on the sale of a minimum number of products.

A 'two-letter' system was used - one for the supplier and another for the auditor. When the audit was due, staff were told to lose the real ones or they would suffer 'death by slow torture'.

Sweetbaum faces two charges of fraudulent trading and two of making false statements to auditors. Finance director Trefor Llewellyn faces one charge of fraud and two of making false statements.

Geoffrey Battersby, who previously audited Wickes at Arthur Andersen, faces one charge of fraud. Financial director Terence Carson and buying director Leslie Rosenthal face charges of fraud and making false statements. The men deny all the charges.

The case continues.