A HERITAGE railway business was in a “dire” financial situation when new owners took control, a court was told yesterday.

Consultant Michael Owen made the frank assessment while giving evidence on the third day of the trial of Corina Heslop, the former management accountant for British American Railway Services (Bars), which runs the Weardale Railway, in County Durham, and similar lines elsewhere in the country.

Mrs Heslop is accused of stealing £36,781 from Bars by paying company cheques, purporting to be to pay suppliers, into her own bank accounts.

Durham Crown Court heard that following her arrest she told police she merely reimbursed herself for payments made on behalf of the company from her own funds.

However, company finance director Kevin Warren Busath told the court this would “never”

be how creditors were paid.

The court was told the alleged thefts were against a background of the firm fighting to make a success of a newly-acquired business.

Mr Owen said he has worked as a management consultant “trying to turn the company around”

since before the Bars took over in 2008.

“I felt I was thrown in at the deep end,” he said. “I would say it was one of the most difficult roles I have had in my career.

“We managed to keep the company going until we found a suitable buyer. That was Bars, who bought the company knowing it was still in difficulties. It was just about washing its face.”

Mr Owen said cash-flow was “dire” and one supplier would only provide sleepers after he personally handed over a cheque in a motorway service rendezvous.

He said cheques to pay creditors were issued by Mrs Heslop and colleagues at the Stanhope accounts office, in County Durham, but had to be signed by himself or other managers.

Asked how closely he scrutinised outgoing cheques, Mr Owen said he “diligently” looked at each payment, but he would only query them with fellow managers if it was not to a company “in our regular pool of suppliers”.

The prosecution allege the companies Mrs Heslop purportedly paid were all previous suppliers of the business.

Mrs Heslop, 42, denies eight counts of fraud.

She and her husband, 45-yearold James Raymond Heslop, both of Rookhope Grove, Bishop Auckland, deny possessing articles for use in fraud and damaging property at the company office.

The trial continues today.