Three former senior executives of Alfred McAlpine Slate Ltd were given jail sentences, after admitting they had deliberately overstated the company's production and sales figures for some years.

Around 44% (over £10 million) of the company's reported debtors were fiction.

An example of deception included showing auditors a stockpile of crates of roofing slate; the outer crates full but the inner crates empty. Customer letters were created to give the impression that debtors' payments were in the pipeline, delivery notes and transportation invoices for non-existent consignments were forged.

Alfred McAlpine Slate Ltd ("Welsh Slate") was wholly owned by Alfred McAlpine Plc. It represented about two or three percent of the Plc's turnover and employed around 400 workers at its quarry near Bangor. Welsh Slate was a self contained operation, seen by the parent company as low risk. However, in February 2007, the Plc informed the stock market it had uncovered systematic deception. Falsified production and sales figures in previous Welsh Slate submitted financial reports would require a restatement of its 2005 assets and a reduction in expected pre-tax profits for 2006.

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The Plc also handed over the results of its internal investigation into its subsidiary to North Wales Police, who alerted the Serious Fraud Office (SFO). A joint SFO/police investigation opened in September 2007. In November the following year, three Welsh Slate executives were charged; Christopher Law; Managing Director, Geraint Roberts; Operations Director and Paul Harvey; Head of Sales. All three subsequently pleaded guilty to fraudulent trading contrary to s.458 of The Companies Act 1985 and at Caernarfon Crown Court they were sentenced to two and a half years, 16 months and 10 months imprisonment, respectively.

(CD/KMcA)