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.

Start your day with The Independent, sign up for daily news emails
Life and Style
Steve Shaw shows Kate how to get wet behind the ears and how to align her neck
healthSteven Shaw - the 'Buddha of Breaststroke' - applies Alexander Technique to the watery sport
Arts and Entertainment
The sight of a bucking bronco in the shape of a pink penis was too much for Hollywood actor and gay rights supporter Martin Sheen, prompting him to boycott a scene in the TV series Grace and Frankie
footballShirt then goes on sale on Gumtree
Terry Sue-Patt as Benny in the BBC children’s soap ‘Grange Hill’
voicesGrace Dent on Grange Hill and Terry Sue-Patt
Arts and Entertainment
Performers drink tea at the Glastonbury festival in 2010
Arts and Entertainment
Twin Peaks stars Joan Chen, Michael Ontkean, Kyle Maclachlan and Piper Laurie
tvName confirmed for third series
Cameron Jerome
footballCanaries beat Boro to gain promotion to the Premier League
Arts and Entertainment
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine