Alpha accounts scandal claims scalps of top two

The crisis at Alpha Airports deepened yesterday when the chief executive and finance director quit amid an investigation into the company accounts.

Shares in the business - which supplies food and retail services to 100 airlines and 70 airports - have been suspended since April, when the auditors suddenly withdrew their approval of the accounts.

At the centre of the scandal is a curious contract signed in October 2005. According to a release to the stock exchange, Alpha "consciously assisted ... (a) customer to put itself in a position in which it might have been able to manipulate its own financial statements".

PricewaterhouseCoopers said it had "valid concerns" over the accounts, and pulled its approval at the last minute, a highly embarrassing decision for Alpha.

Yesterday Kevin Abbott, the chief executive, and Heather McRae, the finance director, resigned with immediate effect.

They have been replaced by Peter Williams, formerly chief executive of Selfridges, and Tim Redburn, who has held senior positions at Simon Group and Henlys. Mr Redburn has been appointed on a three-month contract initially.

A special committee has been set-up to investigate the dubious contract. This committee is in "constructive discussions" with PwC, according to Alpha.

A law firm has also been appointed to "investigate the matter fully". A spokesman said he did not know if the issue could eventually involve the police.

The shares were halted at 84.5p, at which price Alpha is worth £147m. It made profit last year of £18.4m on sales of £550m.