Publisher cleared of embezzlement

Ms Allan was found not guilty at Edinburgh Sheriff Court

The publisher of the children's book Maisie the Morningside Cat has been cleared of embezzling £650,000.

Katrena Allan, 51, was accused of stealing the money from East Lothian company Bindery Machinery Services, where she worked as finance director.

Her former boss claimed Ms Allan had fraudulently written dozens of cheques to herself and her company Glowworm Books which published Maisie.

She was found not guilty of all charges at Edinburgh Sheriff Court.

Speaking outside the court, Ms Allan, who burst into tears after the unanimous verdict, said: "It's a great relief and the truth is out now. I can get on with my life now."

Ms Allan began working at Bindery Machinery Services in 1999 but was arrested in 2005 after more than £500,000 was discovered missing from their accounts.

Her former boss Jim Brown claimed Ms Allan was responsible.

Abandoned trials

Ms Allan, from Broxburn, West Lothian, stood trial in November 2007 but proceedings were abandoned because the defence team was unable to get hold of vital cheques, invoices and receipts.

A new trial began in March this year but was again deserted after a few days when more documents emerged.

The third and final trial began this month.

It was alleged she wrote unauthorised cheques and made electronic payments worth £656,325 between May 1999 and January 2005, and tried to take a further £35,108 in January 2005.

Ms Allan claimed any cheques or electronic bank transfers were repayments for money she had loaned to Bindery. She said Mr Brown regularly asked her to pay thousands of pounds to his expenses, including diamond rings and holidays, to avoid tax.

She had paid machinery, suppliers, travel and personal expenses using her own and Glowworm's credit cards.

In return, she used Bindery money to pay Glowworm salaries when she was short, and paid it back when she could.

Ms Allan admitted falling behind with the salary repayments, but said it was a "commercial matter" and she never intended to cheat her employer.

Her lawyers claimed she had been forced to defend herself "with hands tied behind her back" because many of the documents she needed were lost or destroyed during the liquidation of Glowworm.

The company went bust after Bindery began proceedings against it in April 2006.

The author of the popular Maisie books, Aileen Paterson, claimed she lost £40,000 when the firm hit financial problems.

Her contract with Glowworm ran out in 2005.