McAlpine directors arrested over false accounting

The troubled construction group Alfred McAlpine was thrown into fresh turmoil yesterday when two directors were arrested for alleged conspiracy to commit false accounting.

Graeme McCallum, 49, head of McAlpine's housing division, and Eric Grove, 66, a non-executive director, were detained following an investigation by the Inland Revenue. Derek Green, a consultant employed by the stockbroker Gerrard Vivian Gray, with no apparent links to McAlpine, was also arrested after tax officials visited several premises.

Alfred McAlpine said it had been informed that two of its offices had been visited by the Inland Revenue.

"The board has been assured by the Inland Revenue that the reason for this visit is not in any way related to the business or tax position of Alfred McAlpine or any of its subsidiaries but relates to the personal affairs of Mr Grove ... and Mr McCallum."

The Inland Revenue declined to give further details about the investigation because it was still continuing.

However, it is understood that the false accounting charges may be linked to recent earn-out payments arising from McAlpine's acquisition in 1988 of Solihull-based Canberra, a privately-owned housebuilder controlled by Mr Grove.

Mr McCallum was Canberra's managing director at the time of the merger.

Under the terms of the deal, McAlpine took a 60 per cent stake in Canberra for an undisclosed sum. Mr Grove, his wife, son and daughter received a total of pounds 3m in special dividends in each of the two following years.

In 1992, Mr Grove agreed to sell his remaining 40 per cent interest in Canberra to McAlpine for pounds 8.4m in cash and shares with a future earnings- related payment of at least pounds 9m to come.

According to McAlpine's latest set of report and accounts, the total deferred consideration for Canberra - since renamed Alfred McAlpine Developments Ltd. - is payable this year.

In a note to the accounts, McAlpine says the sum "is not expected to differ significantly from the amount included in the balance sheet as at 31 December 1994 of pounds 15.3m."

Mr Grove was appointed to the McAlpine board in 1990 and sits on its audit and remuneration committee. Mr McCallum joined McAlpine in 1988 following the merger with Canberra, where he was managing director. He was previously with Barratt Developments.

The arrests of two senior executives are yet another embarrassment for McAlpine, which last month reported a pounds 23m loss for 1995 following the closure of its loss-making building division. Last September a leaked letter from Hambros' deputy chairman, Sir Chips Keswick, acting on behalf of the McAlpine family trusts that own 15 per cent of the company, accused the construction group of poor management and urged it to sell out to a larger rival.

Shares in McAlpine fell 7p to 180p on news of the arrests.

News
peopleFrankie Boyle responds to referendum result in characteristically offensive style
News
news
Life and Style
Couples have been having sex less in 2014, according to a new survey
life
New Articles
i100... with this review
PROMOTED VIDEO
Voices
Holly's review of Peterborough's Pizza Express quickly went viral on social media
Sport
footballTim Sherwood: This might be th match to wake up Manchester City
Arts and Entertainment
musicHow female vocalists are now writing their own hits
New Articles
i100
News
ebooksAn unforgettable anthology of contemporary reportage
News
news
Arts and Entertainment
musicBiographer Hunter Davies has collected nearly a hundred original manuscripts
News
Blahnik says: 'I think I understand the English more than they do themselves'
people
Arts and Entertainment
Michelle Dockery as Lady Mary Crawley in Downton Abbey
TVInside Downton Abbey series 5
Life and Style
The term 'normcore' was given the oxygen of publicity by New York magazine during the autumn/winter shows in Paris in February
fashionWhen is a trend a non-trend? When it's Normcore, since you ask
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam