Henry Sweetbaum, Trefor Llewellyn and Terence Carson have been acquitted today of offences relating to the £18.3 million overstatement of company profits of the Wickes group of companies between 1994 and 1996.
The defendants
- Henry Alan Sweetbaum (65), was the Chairman and Chief Executive of the Wickes group.
- Trefor Wilmott Llewellyn (55), was the group finance director.
- Terence John Carson (52), was the finance director of a subsidiary, Wickes Building Supplies.
Fraudulent trading (contrary to section 458 of the Companies Act 1985)
Sweetbaum, Llewellyn and Carson were charged with fraudulent trading between 1994-1996.
False statements to auditors contrary to section 389A(2) of the Companies act 1985.
Sweetbaum and Llewellyn were also charged with making a false statement to the Wickes Group auditors (Arthur Andersen) in 1995. Sweetbaum and Carson were similarly charged in relation to 1996.
They were found not guilty on all counts
Inflated profits
The SFO alleged that the accounts were fraudulently overstated by £6.2 million in 1994 and by £14.1 million in 1995 by the use of a two-letter system. Following negotiations, 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, which was not shown to the auditors, was sent to the suppliers setting out the true terms of the deal and which would have in fact, required the income to be spread in the accounts over several years. The three defendants denied knowledge of the two-letter system.
Other defendants
Two other former directors were also charged in this case and appeared with the above three defendants throughout the early months of the trial:
- Geoffrey Brian Battersby, who was the Group Financial Controller, was discharged after the end of the Prosecution case following a ruling that there was no case to answer. The judge directed the jury to return a "not guilty" verdict.
- Leslie Rosenthal was 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.
Chronology
The SFO investigation opened in November 1996 with support from the Metropolitan Police Fraud Squad.
Charges were brought in May 1999 against Llewellyn and Carson (and Battersby and Rosenthal). Sweetbaum was charged in June 1999.
The trial, involving all five named defendants, opened at Southwark Crown Court on 22 January 2002. Battersby was discharged on 3 September 2002. Rosenthal was separated from the trial on 23 October 2002 and faces a new trial next year at a date to be determined.
Leslie Rosenthal is listed tomorrow at 10.30 at Southwark Crown Court in front of HHJ Mitting for a Directions Hearing for his trial.
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