Sweetbaum forced to resign as Wickes chief

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The Independent Online
Henry Sweetbaum last night bowed to intense pressure from institutional shareholders by resigning as the pounds 1m-a-year chairman and chief executive of Wickes, Britain's third biggest DIY retailer.

Mr Sweetbaum has been replaced as non-executive chairman by Michael von Brentano, while another non-executive board member, Robert Burrow, becomes deputy chairman. Wickes plans to appoint a full-time chief executive in due course.

Stuart Stradling, who only became finance director a year ago, will also quit the Wickes board as soon as an investigation begun yesterday by accountants Price Waterhouse and legal firm Linklaters & Paine into the circumstances leading up to the accounting errors, announced on Tuesday, has been completed.

Arthur Andersen, the auditors who signed off last year's accounts, is quantifying the likely shortfall in the 1995 figures "and earlier years", a company spokesman said.

Until that amount is assessed Wickes will not pay a 1.5p final dividend due on 4 July. A dividend will be recommended when the size of 1995's operating profits is determined, Wickes added.

Shares in Wickes were suspended at 69p on Tuesday following the discovery of "serious accounting problems".

The problem is thought to centre on the way the company has been accounting for supplier discounts and their contributions towards in-store promotions.

Mr Sweetbaum stepped down after a series of lengthy board meetings yesterday afternoon called to discuss the accounting inaccuracies.

His departure, while sudden, was seen as increasingly inevitable. One senior fund manager, speaking shortly before news of Mr. Sweetbaum's resignation broke, said: "There's bound to be pressure for changes. If the profits have been over-stated and someone has been making huge bonuses then questions have to be asked. It brings the whole lot under the microscope."

Mr Sweetbaum incurred the wrath of powerful institutional shareholders over the pounds 1.2m salary he received last year, which included a pounds 750,000 bonus from an incentive scheme linked to the company's share price. The previous year he earned pounds 1.1m, including a long-term bonus of pounds 670,000.

Last night it remained unclear what, if any, compensation Mr Sweetbaum might receive, or whether he might have to return part or all of his previous years' bonuses to the company.