Dunlop Haywards is being asked to repay £26m in loans made by the Nationwide Building Society on the back of alleged fraudulent valuations, the High Court heard yesterday

The prosecution outlined the extent to which a director at Dunlop Haywards, Ian McGarry, is alleged to have overvalued three properties, against the value of which Nationwide provided loans.

Dunlop Haywards is part of the listed Erinaceous group and in March was merged with two other subsidiaries, Egan Lawson and Millar Kitching, to form Erinaceous Investment.

The three properties comprised two industrial units and an office block in Camarthen, Wales, in Aston, West Midlands, and in Oldbury, West Midlands, respectively.

Justin Fenwick QC, acting for Nationwide, outlined the valuations provided by McGarry, and compared these with the lower valuations provided in a report by a Mr Farr, who was commissioned by the defence for the litigation.

The court heard that the properties were valued by McGarry between September 2005 and January 2006, although Fenwick questioned whether all the inspections outlined by McGarry in reports to Nationwide were ever undertaken.