Wickes launches investigation

PATRICK TOOHER

A formal investigation was begun yesterday by accountants Price Waterhouse and law firm Linklaters & Paines into the serious accounting problems unearthed at Wickes, the troubled do-it-yourself retailer whose pounds 1m-a- year boss resigned abruptly earlier this week.

Wickes said it had traced the accountancy errors to a small group of employees who had "elaborately disguised" their actions over a number of years.

Legal action against them was one option being considered, but a preliminary investigation had found no evidence to link former Wickes' chairman and chief executive Henry Sweetbaum to the problems, said a source close to the company.

Many staff will be interviewed by the investigators, including Mr Sweetbaum and former finance director Trevor Llewellyn, now at building materials group Caradon.

The cost of the errors, described by Wickes' finance director Stuart Stradling as "deliberately misleading" and going back at least three years, is likely to wipe more than pounds 10m from last year's profits.The developments mean investors will not get their 1.5p final dividend due next week.

Mr Stradling also revealed that the accounting problems relate to payments made by suppliers to Wickes linked to support for advertising, store openings and payments from a new supplier replacing another. "It all relates to the timing of these payments. There is no evidence that they will not eventually be recovered," he said.

Wickes hopes to quantify the losses by the end of next week when trading in the shares, which were suspended on Tuesday, may also be resumed.

The Serious Fraud Office has not yet been asked to investigate, and the Department of Trade and Industry declined to comment on the case.

Wickes has also begun the hunt for a new chief executive and a new finance director as Mr Stradling intends to resign once the internal inquiry is completed. Meanwhile, Michael von Brentano becomes the new non-executive chairman, with Robert Burrow taking on the deputy chairman's role.

Mr Sweetbaum succumbed to intense pressure from institutional shareholders by resigning late Wednesday as chairman and chief executive of Wickes.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: SThree are a global FTSE 250 ...

Recruitment Genius: Mortgage Administrator

£20000 - £25000 per annum: Recruitment Genius: We are a vibrant and establishe...

Day In a Page

Migrant crisis: UN official Philippe Douste-Blazy reveals the harrowing sights he encountered among refugees arriving on Lampedusa

‘Can we really just turn away?’

Dead bodies, men drowning, women miscarrying – a senior UN figure on the horrors he has witnessed among migrants arriving on Lampedusa, and urges politicians not to underestimate our caring nature
Nine of Syria and Iraq's 10 world heritage sites are in danger as Isis ravages centuries of history

Nine of Syria and Iraq's 10 world heritage sites are in danger...

... and not just because of Isis vandalism
Girl on a Plane: An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack

Girl on a Plane

An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack
Why Frederick Forsyth's spying days could spell disaster for today's journalists

Why Frederick Forsyth's spying days could spell disaster for today's journalists

The author of 'The Day of the Jackal' has revealed he spied for MI6 while a foreign correspondent
Markus Persson: If being that rich is so bad, why not just give it all away?

That's a bit rich

The billionaire inventor of computer game Minecraft says he is bored, lonely and isolated by his vast wealth. If it’s that bad, says Simon Kelner, why not just give it all away?
Euro 2016: Chris Coleman on course to end half a century of hurt for Wales

Coleman on course to end half a century of hurt for Wales

Wales last qualified for major tournament in 1958 but after several near misses the current crop can book place at Euro 2016 and end all the indifference
Rugby World Cup 2015: The tournament's forgotten XV

Forgotten XV of the rugby World Cup

Now the squads are out, Chris Hewett picks a side of stars who missed the cut
A groundbreaking study of 'Britain's Atlantis' long buried at the bottom of the North Sea could revolutionise how we see our prehistoric past

Britain's Atlantis

Scientific study beneath North Sea could revolutionise how we see the past
The Queen has 'done and said nothing that anybody will remember,' says Starkey

The Queen has 'done and said nothing that anybody will remember'

David Starkey's assessment
Oliver Sacks said his life has been 'an enormous privilege and adventure'

'An enormous privilege and adventure'

Oliver Sacks writing about his life
'Gibraltar is British, and it is going to stay British forever'

'Gibraltar is British, and it is going to stay British forever'

The Rock's Chief Minister hits back at Spanish government's 'lies'
Britain is still addicted to 'dirty coal'

Britain still addicted to 'dirty' coal

Biggest energy suppliers are more dependent on fossil fuel than a decade ago
Orthorexia nervosa: How becoming obsessed with healthy eating can lead to malnutrition

Orthorexia nervosa

How becoming obsessed with healthy eating can lead to malnutrition
Lady Chatterley is not obscene, says TV director

Lady Chatterley’s Lover

Director Jed Mercurio on why DH Lawrence's novel 'is not an obscene story'
Farmers in tropical forests are training ants to kill off bigger pests

Set a pest to catch a pest

Farmers in tropical forests are training ants to kill off bigger pests