The serious Fraud Office suffered a humiliating defeat yesterday when the final defendant in the Wickes fraud trial was acquitted. The acquittal of the former Wickes director Leslie Rosenthal means that after seven years and more than £40m of taxpayers' money, the SFO has failed to secure a single conviction in the Wickes case.
The court decision comes seven months after three former Wickes directors, including its former chairman Henry Sweetbaum, were cleared of fraud charges after a 10-month trial. Mr Sweetbaum claimed to have been "substantially destroyed" by a "blinkered" prosecution.
Mr Rosenthal, 53, was Wickes's former chief buyer. He was tried separately and acquitted after the jury failed to reach a majority verdict on the single case of making a false statement to the auditors of Wickes Building Supplies. The SFO offered no evidence for a further trial.
The SFO denied any embarrassment over the outcomes. "It is our job to investigate suspected fraud and bring it to the courts to decide," a spokesman said. "I think we have a commendable prosecution rate."
The SFO said that over the long run it had gained convictions in more than 80 per cent of the cases it prosecutes. Seventy per cent of defendants have been convicted.
The SFO said the Rosenthal case had been "highly unusual" as the judge in the earlier trial had ruled that Mr Rosenthal should be tried separately for legal reasons. This was due to an interview with Rosenthal being ruled as admissible evidence in last year's trial at the request of another defendant.
Anthony Hacking, QC, prosecuting, said: "It is ironic that where each of the five defendants, certainly the four who gave evidence, admitted a major fraud went on at Wickes, none of them have been convicted on the basis that each of them said they played no part in it."
The clearing of Mr Rosenthal means that all five Wickes defendants have walked free. Geoffrey Battersby was discharged with no case to answer. Mr Sweetbaum, Trefor Llewellyn and Terence Carson were acquired in November last year followed by Mr Rosenthal yesterday.
The Wickes case first emerged in 1995 with the discovery of a black hole in the DIY retailer's accounts. The SFO's case was that a complex two-letter system involving suppliers allowed Wickes to inflate profits by £20m between 1994 and 1996.
Wickes was subsequently nursed back to recovery by new management with the help of a £57m rescue rights issue. The company was later sold to the venture-capital group Duke Street Capital which merged it with the Focus DIY chain. As FocusWickes the company attempted a £700m stock market flotation last year but was forced to abandon it due to volatile equity markets.
After Mr Rosenthal was cleared yesterday jurors were told of his police interviews, when he admitted he had not told accountants the truth.
Mr Rosenthal was hauled in to be questioned under special powers - and he was told to answer under compulsion. Unlike normal police interviews, questioning under Section 2 of the Criminal Justice Act 1987 demands answers, rather than a "no comment" reply.
For the prosecution, Mr Hacking said : "It will not be appropriate to put Rosenthal on trial for the third time."Reuse content