Wickes suspension to go on into September

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The Independent Online
Wickes, the DIY retailer whose shares were suspended after a pounds 30m profits- overstatement, will not complete its preliminary investigations into the affair until the end of September. The lengthy inquiry means the shares will not start trading again until at least three months after details of the accounting errors first became known.

The details of the investigation were contained in a letter sent to shareholders yesterday from Wickes chairman Michael von Brentano. In the company's first communication with investors since news of the problems became public, Wickes also said it had appointed a new finance director and had begun a search for a new chief executive and non-executive directors.

Mr von Brentano said discussions were continuing with Wickes' suppliers and that until those talks have been completed it would not be possible to finalise the company's revised profit figures for 1995. Only then could the shares start trading again.

The company's relationships with its suppliers are the focus of the investigation. The letter states: "As the accounting problems are linked with supplier contributions such as volume rebates, a review of underlying arrangements with a large number of suppliers is part of the brief given to our advisers. At the same time we need to address our future relationships with our suppliers in a constructive fashion."

Wickes has written to 200 suppliers asking for details on rebate payments and other buying arrangements.

Adopting an apologetic tone, Mr von Brentano's letter concluded: "Your board deeply regrets what has taken place. We are determined to identify those responsible and to take appropriate action at all levels."

Henry Sweetbaum resigned as executive chairman in June, on the day after the accounting scam emerged. Two other Wickes' directors, Les Rosenthal and Chris Miles, have been suspended pending the completion of the investigation by Price Waterhouse.

One Wickes insider said there was no evidence so far to implicate board members. But the source was more circumspect about whether there would be legal proceedings against any other employees. "That will come out as part of the preliminary investigation," he said.

The new Wickes finance director is Bill Hoskins, former finance director at chemicals company Laporte. He will replace Stuart Stradling, who has already stated his intention to stand down. Mr Stradling will relinquish the finance director's post but remain on the board as an executive director until the investigation is completed.