The former owner of one of the UK's largest bottled gas companies has admitted a charge of fraudulent trading.
Peter Bradley, who ran the Merseyside-based Alta Gas from 1994 until its collapse in 2001, admitted the charge while appearing before Liverpool Crown Court.
During a police investigation and earlier court hearings, Bradley had denied a series of fraud charges, totalling as much as £10 million, but changed his plea to admit one count of fraudulent trading at the opening of the case.
Financial director Peter Stott, from
The court heard that Alta Gas had expanded rapidly but when it collapsed a massive multi million-pound black hole in the accounts was discovered.
During the investigation joint administrative receiver Kevin Mawer, of Grant Thornton, told local media on Merseyside: “We reckon that in the last three years of the business there were £26m worth of false invoices and identifying them has proven to be relatively simple.
The actual business was probably no more than 60 per cent of what was in the books.”
He explained that much of the growth of the business existed only on paper.
The balance sheet also contained fictitious or overstated trade debtors. With an apparently successful business, Alta Gas was able to raise loans for expansion and eventually to sell a stake in the company to Mezzanine Management.
But it was when Mezzanine accountants began to investigate the company that the true level of the false accounting was revealed.
Auditors were able to show that loans had been raised on false accounts to keep the business going and expanding but when real on the ground checks on the business were done and its true state was discovered, it collapsed immediately.
The collapse left banks and finance companies who had lent money, estimated in the region of £10 million, unable to regain their loans.
The two men will be sentenced at the end of April.