The Scotland-based George Wilson Group, which includes several timber frame house manufacturers, has gone into receivership after an internal review revealed it had overstated earnings.
Receivers moved quickly to cut costs last week by making 50 of the 280 group staff redundant.
The group has three businesses, Wilson Manufacturing Holdings, George Wilson Homebuilders Group Ltd and Watson Dallas Group Ltd, where World Cup referee Hugh Dallas is a director.
The manufacturing business incorporates timber frame builders Kildonan Homes of Stirling and Lesmahagow-based Nethan Valley Homes Ltd, which both supply the homebuilding business.
Nethan Valley, which took over Kildonan in 2001, has been making inroads into the English market where it has found a niche constructing student accommodation.
The 28-year-old company has predicted a 50% increase in turnover within two years (TTJ February 9) and plans to relocate to a single site manufacturing facility.
Watson Dallas has a door production facility at Perth. Its window plant at Cambuslang uses only uPVC.
Receivers Bruce Cartwright and Iain Bennett at accountants PricewaterhouseCoopers hope the businesses will be sold as going concerns, with memorandums of sale going out this week.
Mr Cartwright said: “The business has not been as profitable as the directors had thought. There have been some issues regarding the true profitability of the business and that has caused cost pressures.”
He dismissed any comparisons with WorldCom, the troubled US telecommunications giant whose recent profit overstatements sent shares plummeting worldwide, but said he could not give specific details on the figures involved.
Mr Cartwright said the companies continue to trade as normal and have “good order books”.
The group recorded pre-tax profits of £500,000 on turnover of £38m in the year to June 2001.
