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Ian Grice, the chief executive, said Dominic Lavalle, the finance director, was not directly implicated but recognised the fraud had happened 鈥渙n his watch鈥�.

Chris Law, the slate managing director, has been dismissed, and five other senior executives have left the business.

McAlpine called in the North Wales police to investigate the issue, which Grice described as 鈥渟ystematic fraud by senior managers鈥�. The company is also closing a quarry, which will lead to the loss of 166 jobs.

One company insider said: 鈥淭he internal and external audit function report to the financial director, so while he was not directly implicated, he has to carry the can. The fraud and cover up were incredibly complex. The managing director of the business was an accountant by background.鈥�

Alfred McAlpine鈥檚 share price fell 2% after the announcement on Monday and a further 4.1% to 473.25 on Tuesday, even though its three core businesses performed broadly in line with expectations of analysts.

The company鈥檚 pre-tax profit for 2006 dropped 24% to 拢18.7m after the fraud, which cost the company 拢22.9m in profit and sales, 拢27.1m in asset impairment and write-offs and 拢6m in professional fees.

Shareholders may put pressure on the company to sell the slate business, which is not expected to break even until 2008. City sources also suggested that McAlpine itself could become the target of a private equity bidder now its stock has been hit.