Tag Archives: assetco

Scandal of John Shannon and Brian Coleman: Unacceptable faces of capitalism and politics

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John Shannon: dismissed by his own firm

This blog has followed  relentlessly the unfolding drama of  AssetCo, the company in charge of London and (until last week) Lincolnshire’s fire engines, which nearly went bankrupt last year and had its shares suspended until recently on the stock exchange.

But nothing can compare with the latest revelations in a dry annual report on the AssetCo website (link for anoraks who want the lot is  http://bit.ly/HVeFEN ). This much delayed report for an 18 month period – it had to be produced to allow its shares to be retraded- tells the real story behind the company’s near collapse which saw its share price drop from 60p to junk stock 1.75p. It has now emerged that dividend payments may have been unlawful, the company has been seriously ripped off by its former chief executive and the accounts were false for both 2009 and 2010.

 Revenue had been overstated by a massive £18.6m and a claimed operating profit of £17.4m was actually an operating loss of £11.4m.

But the company still owes banks a massive £43m – despite creditors taking a 78 per cent hit and its auditors, Grant Thornton  (also owed most of their fees) resigning.Even the restated figures cannot be guaranteed and PriceWaterhouseCoopers,who independently audited the firm, have qualified these accounts. Grant Thornton incidently missed all this -just as they did over MetPro-Barnet’s bust private security firm-bankrolled by Barnet Council.

As the company itself says:”errors include the effects of mathematical mistakes, mistakes in applying accounting policies,oversights or misinterpretations of facts, and fraud.”.

Worse it is quite clear that the only major source of money for the firm in Britain is the council taxpayer in London which is keeping  it afloat to the tune of £3om a year. Even here banks are going to have  to give another bail out and Lloyds have a massive interest because they currently own the London fire engine that comes out on call.

 This is where the scandal of Brian Coleman, the Tory chair of the London Fire Brigade, and John Shannon its former chief executive come in.

Coleman was entertained at least four times by Shannon and accepted an expensive Christmas hamper from Harvey Nicks (see the armchair audit of Brian Coleman in previous blog) and has been AssetCo’s cheer leader.

Now it is clear from this report that Shannon was dismissed by the board of AssetCo because of this financial shenanigans.

I quote: “The new board have been informed that under the stewardship of Mr. Shannon and Mr. Flynn there was a lack of transparent reporting, requests for information were ignored, and related party transactions were entered into without full board approval. The new board cannot be certain that all issues have been captured.

Mr Shannon was dismissed as an employee for breaches of fiduciary duty and whilst the company has not carried out a full investigation, as previously announced in May 2011 in connection with the claims against the Company by Messrs Shannon & Flynn in support of the winding up petition, it identified counter claims against John Shannon of £4.6 m and also counter claims for breach of fiduciary duty of £3.4m against Frank Flynn.

Frank Flynn was the chief financial officer and a mate of John Shannon.

The report reveals that Shannon and Flynn also shared the bulk of a £847,000 pay out in dividends that are probably illegal. And Shannon before he was dismissed managed to up his salary and benefits to a staggering £492,000 and Flynn got an unapproved £30,000 redundancy payment.

Even worse they appears to a dodgy property loan amounting to £1.5m to Shannon. This involved a property company called Jaras.

 The report says: “In respect of the ‘Jaras’ transaction, AssetCo have reviewed internal communications between the date in December 2009 when the £1,500,000 was first paid, and finalisation of the 2010 audited accounts,the management and statutory accounts for the business occupying the property and concluded that:

a) on an arms length basis it would be difficult to substantiate effectively paying six years rent in advance in respect of the property,

b) the payment was originally classified as a Directors’ Loan and was subsequently reclassified as

prepaid rent in order to satisfy audit disclosure requirements, and

c) the business occupying the property is now in Liquidation. ”

It adds: “there is sufficient doubt that either Jaras (where a Receiver has been appointed) or John Shannon will repay the amount.”

The report also reveals that London AssetCo which has assets of the London fire brigade has been moved to another off the shelf company and the firm’s  Middle Eastern operations (see another blog they are servicing the military in the United Arab Emirates)  are now based in a Bermuda tax haven, to keep them secure from any other collapse in Britain. Wise move, as Lincolnshire have sacked AssetCo.

Brian Coleman: AssetCo cheer leader and entertained by John Shannon

The real scandal in this story is that this woefully badly run company has been kept afloat by politicians in London. Coleman and Gareth Bacon should shoulder this blame -with their blind belief that privatisation is the only answer.

 But Coleman is more culpable because of his personal  links with Shannon and acceptance of gifts from a man  now dismissed from the firm. Shannon may get away with all this but you do have a choice next month to make sure that Coleman never darkens the London fire brigade again.

Removal  would be a service to  Londoners  and you have a vote at the Greater London Assembly elections in Barnet and Camden.

Update: Danes and British firms entertain Coleman to eye up AssetCo mess

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The new foreign shareholders of AssetCo could well be soon approached by British and Danish companies keen to take over  their business in London and take on new private fire contracts in the capital.

 The gift and hospitality logs of  Tory fire chairman Brian Coleman, and Boris Johnson’s fire adviser , David Cartwright, show they have recently been entertained by the top people from both firms.

David Cartwright had lunch with Richard Bond, development director of Serco, at the East India Club, the private schoolboy’s favourite haunt in St James’s Square, where he is chairman. While Brian Coleman was entertained by Jeroen Weimar – managing director of Serco at Livebait – a slight bit of a restuarant climb-down for Coleman.

The Danes not to be outdone sent their chief executive ,Allan Larsen, of Falck Danmark A/S. who met the £150 bill for both Coleman and Cartwright for dinner at Butler’s Wharf, Chop House.

 Both companies are known to see the fire service as a new target for privatisations once the new Localism Bill becomes law later this year.I also know that Boris Johnson, the mayor, is well aware of Serco’s interest.

 Meanwhile in the run up to the election Brian Coleman shows he has no intention in slacking on  his expenses claims – he has already notched up £1621 on taxis, mileage, accommodation and we are only just half way through the financial year. It looks as though he will  match his £3500 plus claim  last year without too much sweat. I have updated my armchair audit of Coleman on this site to take account of these new developments.

Exclusive: London fire company former bosses investigated as shares suspended

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John Shannon , ex ceo, high flying and an alleged trail of AssetCo debts

Update: Judges are expected to approve tomorrow( wed july 28)) a deal allowing to dilute shares by 1000 per cent, raise fresh cash from foreign investors and pay off creditors so the company can save its Middle East operations and plan to sell off its London and Lincolnshire fire brigade contracts. Advisers, the current chairman,Tudor Davies, will also get big success fees for pulling this off.

Update:  Trade creditors- from American Express to Grant Thornton – today (Thursday) accepted a 23p in the pound settlement for over £1.5m owed -writing off over £1m debts and AssetCo subsidiaries -including London- accepted a  peanuts settlement (0.1p in £) for the £100m owed -paving the way for first step to save firm from total collapse but also pointing to sale of London and Lincolnshire fire contracts.

An investigation into the  financial dealings of  former bosses  of AssetCo, the private owner of London and Lincolnshire’s fire engines, is underway by the firm, shareholders have been told.

A statement from the company says: “”The Company has recently received details of allegations in respect of the activities of its former management team. The Company is investigating these
claims and following the completion of its investigation may initiate proceedings.”

The disclosures come as shares have been suspended after  the company sought yet another £14m from investors and massively diluted  junk status share price, last traded at a mere 1.75p. The move comes as Bob Neill, the fire minister, will be urging fire authorities across England to privatise their services and hand over their equipment , training and vehicles to  any private company that wants to make a profit from them.

Arcapita, the only bidder for the stricken company, walked after demanding auditors crawl over AssetCo’s accounts before it would talk any further about a take over. A statement was issued today saying it was not proceeding with the take over.

Worse, documents released to creditors reveal  up to £5m of unpaid bills – including unpaid debts for corporate entertaining at sports fixtures ( £31,000 )and the use of  private jets (£7000). The company blamed its former management and senior staff for leaving this trail of bills for high living, running up an unpaid card credit bill to American Express totalling £134,000.

Now one of the creditors, Bookajet, has told this website that it was left with unpaid bill of £7000 for a hired jet from John Shannon, the former chief executive, after AssetCo refused to pay it. According to a spokesman Mr Shannon appeared to have taken the jet for a personal trip and not on company business. AssetCo are not commenting about this but it looks like Mr Shannon is contesting it.

Bookajet say they have contacted debt recovery lawyers with the aim of seizing AssetCo’s assets.

A taxpayer owned Lloyds Bank fire engine

It has also been revealed by AssetCo and the London Fire Authority that all the capital’s fire engines have never been owned by either of them – they are the property of state-owned Lloyds banking group- owners of the Halifax and Bank of Scotland. The new difference is that Lloyds along with other London banks is now a creditor as well as an owner. There are massive unpaid loans  now totalling  some £30m since AssetCo was launched.

So firefighters are combating riots and blazes in vehicles courtesy of Lloyds Bank ,giving a new  meaning to the Black Horse’s advertising slogan ” for the Journey.” Lloyds are now both the owner and creditor to AssetCo London and promise not to auction them off to get their money back. London Fire Brigade issued a  statement assuring their fire engines are safe.

Two highly embarrassing documents  (see http://bit.ly/px5djv )have been sent to shareholders and creditors revealing the dire state of the company – and pleading with shareholders to accept a massive dilution in shares and creditors accepting less than a quarter of the money they are owed. Banks are being asked to reschedule debts.

Over £100m is owed by AssetCo to its subsidiaries,there are £17m in contingent liabilities to Lloyds, Barclays, Lombard and the Co-operative banks.

Grant Thornton, their auditors – the same company that missed the MetPro security company scandal in auditing Barnet Council’s accounts – are owed £267,000. EDF owed £18,000 in unpaid electricity bills, and even McGrigors, their solicitors based at the Old Bailey who are hosting creditors’ meeting for them, are owed £52,000. The Retained Firefighters Union, is also owed £12,000.

Even  the pension scheme for London staff is at risk if it is not bailed out – the company admit taxpayers will have  to pay out 90 per cent of the cost if it collapses.

Assuming the company is saved, the scandal is not yet over. Further litigation between the firm and John Shannon  over money  will come to court on December 5 as he likely to contest allegations of misusing AssetCo’s cash. Both Lincolnshire and London fire engine contracts are likely to be put up for sale. Only the interest in Abu Dhabi, where the firm works for the military, are likely to be saved.

London AssetCo will only be able eliminate £20m of its debts and be sold off with £30.6m debts. with Lloyds holding on to the fire engines. Lincolnshire has debts of £12m.

Anyone for privatisation after this debacle? Over to you. Mr Neill.

Judge aids rescue package for ” bust ” privatised London fire firm

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Mr Justic Floyd-Helpful to AssetCo Pic courtesy:thisislondon.com

A High Court judge came to the potential rescue of AssetCo, the near insolvent owner of London and Lincolnshire’s fire engines, by granting the company  another month to negotiate an extraordinary deal with its  creditors to wipe out debts of over £100m.

Mr Justice Floyd, sitting  at the Royal Courts of Justice in London, granted applications to adjourn  moves until September 28  to wind up the firm in favour of allowing  the company to open negotiations with its creditors on a deal that will recover some of their lost investments.

Mr Lloyd Tamlyn, for AssetCo, explained that if the company went bust now, the banks and other investors would be lucky to get 0.5 per cent of their money back. But if they agreed to negotiate with the company on a deal they could walk away with 23.5 per cent. In return they would have drop any further demands for cash, wiping out the £100m plus owed by the firm.

 In effect investors in AssetCo look set to lose some £77m. Since the judge was aware that this case was being reported, AssetCo were careful not to ( as at other hearings) list who is owed what.

But from the previous hearing ( where the registrar was not aware he was being reported) the creditors named included  state-owned Halifax Bank of Scotland which is owed £12m and energy company, EDF, which suggests AssetCo may not have paid fuel bills for premises they run in London. Others include FD Direct, the Inland Revenue. They will still be big losers.

The difference the deal would make is shown by Northern Bank who are owed £1.3m and have been very active in opposing moves by AssetCo to give preferential pay outs to its lawyers and accountants.

Adam Goodison, for Northern Bank,  who had pressed for the company to be wound up, explained to the court why the firm is now ” content”  for the deal to go ahead. This followed negotiations that changed the creditor status of Northern Bank, so it could benefit from the proposed pay out.

If AssetCo went bust the bank would be lucky to get £10,000 back from the £1.3m they put into the company. Under the revised deal the bank would get back nearer £300,000. The same would apply to other creditors.

 The question – dealt in passing during the hearing – is where has AssetCo got the cash to even finance this deal? It appears to have come from money raised from international financiers who have given another £10m cash to the company on top of money raised earlier this year which severely diluted its share price to near junk status.

At the last court hearing the financiers were named as North Atlantic Value LLP, a part of the J O Hambro Capital Management Group, Utilico Investments Limited and Henderson, which incorporates the interests of Gartmore Investments Limited.

A hint came from Northern Bank’s lawyer after the hearing when he told me that the deal could be “good news” because it could rescue the company and remove most of its debts. He thought investors were ” taking a punt” on the firm’s future.

The majority of the investors will still have to agree before the deal can go ahead and it will need final approval of the court on September 28 – but the judge’s move means that it could get Brian Coleman, Tory chair of the London Fire Brigade, off the hook from seeing London’s fire engines owned by administrators.

 Once the debt is cleared it then makes the company more attractive to a take over. Nothing more was said in court about a bidder – known to be Arcapita Bank in Bahrain – which suggests they have gone cold on the idea.

The situation is far from satisfactory and does not rule out a slow death of the company,reflected in its low  2.2p share price, valuing it at £5.52m today.

FBU general secretary Matt Wrack said: “Privatising emergency services is stupid and dangerous. The long, slow death of AssetCo is a perfect illustration of this.  We still do not know what is going to happen to London and Lincolnshire’s fire engines.  They are, we believe, going to be the property of AssetCo’s creditors when AssetCo finally goes under.  I call on the London Fire Brigade and the government to bring the fleet and their maintenance back into public ownership.”

This blog was trying to contact Tudor Davies, head of AssetCo, for a comment.

Update: Near bust AssetCo to try and stave off insolvency again

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AssetCo, the troubled owner of London and Lincolnshire’s fire engines and military contracts in the Middle East, will make a desperate attempt to stave off bankruptcy at a hearing at the High Court tomorrow (thursday).

The near bust firm will be up before Mr Justice Peter Smith in Court 61 in the Chancery Division of the High Court in the Strand pressing for yet another adjournment as it fails to clinch a take over deal with Arcapita, the Bahrain based company. The court hearing begins at 10.30 am ,though AssetCo is at the bottom of the list, and the case may not be heard until later in the day.

In another desperate move the firm will produce at the court draft  documents to be presented to its many creditors in the hope they may stave off the evil day when it will have to cease trading. Details of the documents have not been published but a majority of creditors will have to agree before the company can be saved. The last time the company appeared before the court it said it could go bust owing £140m to banks,electricity companies and suppliers.

Will the judge still be sympathetic to this ill-fated example of privatisation? We will have to wait events.

AssetCo buys a month’s grace as investors asked again to bail it out

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AssetCo, the troubled company which owns London and Lincolnshire’s  fire engines, and is £140m in debt, has managed to negotiate a further lifeline from its investors.

 The company which faced being wound up today (July 25) at a High Court hearing in London has gained another month’s grace until August 25 to conclude the deal.

A statement from the company said:””the Board of AssetCo has been in discussions with certain of its major stakeholders (being North Atlantic Value LLP, a part of the J O Hambro Capital Management Group, Utilico Investments Limited and Henderson, which incorporates the interests of Gartmore Investments Limited), ” for further refinancing of aanother £10m.

The price to be paid will be another dilution of the shares – worth just 1p before the deal and 2.50p – after the deal became public, and banks and other creditors will not get all their money back either.

The statement continued:”The strategy will focus  on developing the Middle-East business into a leading emergency services platform and on running the London and Lincoln contracts.  The refinancing proposal to be approved by shareholders will involve the ring-fencing of the LFEPA (london fire brigade)for the benefit of the London subsidiary lender group, although shareholders will retain an interest in any residual value. The Investor Group intends that following this fundraising, the Company will continue to be listed on AIM.”

 The company also said that talks were an advanced stage with a bidder-assumed to Arcapita, the Bahrain based private bank (see previous post), but significantly Arcapita has not signed the deal.

  At Monday’s hearing  the court was told  professional fees for lawyers and financial advisers amd the directors are costing £100,000 a week.

 Mr Justice Floyd warned that if the new private-sector bid failed, it could leave AssetCo with “nothing left in the kitty “.

 “If it is not successful then the assets of the company would look to be depleted by the professional fees being charged to the point where there will be nothing left in the kitty to reimburse creditors of any description “ he said.

  Professional costs to cover just a fortnight’s work restructuring and refinancing the company in the run up to a new bid were detailed in court.  AssetCo directors Tudor Davies and Tim Barrett would charge £40,000 plus VAT, solicitors £112.824 plus VAT and financial advisors would be invoicing for £50,000 plus £5,000.  

  The scale of debt-laden AssetCo’s financial meltdown was disclosed in court – £2.2M at the end of June had shrunk to just £700,020

     Creditors supporting the company’s call for the wind-up order to be adjourned included North Atlantic Value, owed £15.9M by AssetCo. The company, part of the J O Hambro Capital Management Group, which is proposing to contribute to anothedr £10m refinancing deal.. 

   Matt Wrack, general secretary of the Fire Brigades Union said : “ These assets should be brought back into public ownership. At the court today, we heard lawyers haggling over remuneration fees ASSETCO – costs soar as “new bid” staves off wind up – but still no assurances for Londoners.  

 PrIvatising essential services in crazy, as the AssetCo debacle continues to show. Fire engines in London and Lincolnshire should be brought back into public ownership as soon as possible.”

Exclusive:Are London’s fire engines to be owned by a firm whose advisers advocate jihad?

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Arcapita's swish Bahrain hq: Picture courtesy:http://thebigprojectme

Just when the appalling story of the near bankrupt company,AssetCo, which owns London and Lincolnshire’s fire engines, nears its conclusion,  there is a new and extraordinary twist to the tale.

AssetCo in desperation to stave off bankruptcy on Monday is negotiating a take over with Arcapita Bank, a Bahrain based but Arab and Indonesian privately owned company. This firm because it is owned by Saudis is governed by Shariah law and any transaction must be approved by a special committee of  Sharia advisers.

 Now an investigation by me has come across extraordinary information about their advisers and their views and connections with militant Islam. Enough for me to contact the company in Bahrain and ask for an explanation. Which is more than Brian Coleman, chair of the London fire brigade and Bob Neill, the fire minister, can do- because they have rendered themselves  powerless to do anything  under the terms of the contracts in selling off the fire engines and recruiting auxilliary staff to AssetCo in the first place.

Here are the details and the company’s response. They are three allegations, that they employed an adviser considered so dangerous by the government that he is banned from entering Britain; that they currently employ an adviser who advocates aggressive military jihad and there were involved in a big controversy in the United States over allegations that  their top man had secretly funded Osama Bin Laden.

The first case involves  Yusuf Al-Qaradawi , a man banned from entering Britain since 2008, after advocating the abduction and killing of US soldiers in Iraq and the killing of Israeli citizens. On other matters he is  tolerant, including allowing Muslims to consume a very limited amount of alcohol . He condones wife-beating as a last resort so long as it done lightly and thinks homosexual acts should be punished by the death penalty. He was chairman of  Arcapita Shariah Advisory Board.Ironically he came to Britain in 2004 and Ken Livingstone, the Labour mayorial candidate who approved the original AssetCo contract, shared a platform at City Hall which was condemned by Bob Neill, then a London Assembly member.

The company confirm his former employment: A spokesman said: ” He was an adviser only on aspects of shari’ah law and our relationship with him ended inFebruary 2002. ”

But since he has left he was had been replaced by another adviser Muhammad Taqi Usmani , a senior Pakistan Muslim scholar, and former judge who has recently advocated ” aggressive military jihad.” According to an article in The Times see http://thetim.es/pcASva– he believes Muslims should live peaceably in Britain,”  only until they gain enough power to engage in battle”. He has since corrected this impression suggesting a more ambivalent attitude to jihad.

He also as a former Pakistani sharia judge argued against the women’s protection law which made rape a criminal offence.

The company said ” We believe the report to be a mistranslation of what he actually said. He did not advocate aggressive military jihad.”

The final area involves a row in the US when Arcapita took over Cypress Communications – a company which manufactured a state of the art computer security kit. There was an allegation that the chairman of Arcapita,Mohammed Abdulaziz Aljomaih – was discovered on the ‘Golden Chain’ list of Bin Laden supporters and financiers which was seized in 2002 during an anti-terror raid in Bosnia.

There followed an inquiry by the Committee for Foreign Investment in the US  on whether the company -like the take-over of  US ports by a Dubai firm- and it ended with the company being allowed to run the company but not allowing non US national access to sensitive computer software. See:http://www.nationalcorruptionindex.org/pages/profile.php?profile_id=325

The company’s response is: “This claim was thoroughly investigated by the US authorities at the time and they found that Al Jomaih, chairman of Arcapita, was not the same person named in the list. Restrictions on non US citizens  were applied at the time, like any other foreign company buying a US company in a sensitive area , but these have since been lifted.”

The only person so far to raise this issue of Arcapita has been Matt Wrack, general secretary of the Fire Brigades Union. In a letter to Bob Neill he says: ” I am sure you will appreciate the importance of this at a time when we are still considering the outcome of the inquest into the 7/7 terror attacks.

“The simple truth is that this privatization has been a complete and utter disaster for all concerned. The complacency and lack of foresight of those responsible is an utter scandal as is the continuing attempt to pretend there is nothing wrong”.

My conclusion is that the arrangements which could lead to Arcapita taking over London’s fire brigade prove there is a major flaw in the government’s privatisation agenda .

If a firm that cannot be vetted can take over such a sensitive area- particularly as London Fire Brigade plays a major role in protecting the capital for future terrorist attacks, there is something seriously wrong.

 I cannot prove that Arcapita is not a fit and proper company to run the operational side of the London fire Brigade ( they own other less sensitive things like Freightliner and Viridian, N Ireland’s electricity). They also point out that their advisers are not employees of the company and they do not have any say in the operation of the company. Nor having just done a blog about the media misrepresenting Muslims, do I want to create scare stories.

But as a citizen I would want my elected representatives to guarantee that in such a sensitive area, they are safe to do so, and there is no hidden agenda behind this take over.

Anything less would be grossly irresponsible and playing with the lives of everybody who lives in London- whether they be Muslim, Jew, Atheist, Christian or whatever. I hope Mr Neill and Mr Coleman are listening.

Update: AssetCo stay of execution until July 25

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Update : AssetCo hearing  time and place fixed on court schedule

COURT 62
Before MR JUSTICE SALES
Monday, 25 July 2011
At half past 10

APPLICATIONS
Omniway Properties Ltd v Fairlamb
Bowman v Mellor
Monty Farms SA v Agrexco Agricultural Export Company Ltd
Monty Farms SA v Agrexco Agricultural Export Company Ltd
Dr Oetker (UK) Ltd v Kenshawnapier Ltd
Rowan & Dartington & Co Ltd v Davis

COMPANIES COURT
Medipharm Ltd
In the matter of Assetco PLC
Medpharma Ltd & Nafisa ATI
Medicentres (UK) Limited

Assetco, the near bankrupt company in charge of London and Lincolnshire’s fire engines, was given until July 25 to try to stitch up a take over deal or go bust.

Mr Justice Peter Smith  at a hearing in the Chancery Division of the High Court in London rejected moves to wind it up owing £140m  to creditors or going into administration.

The company is thought to be negotiating a deal with a Bahrain bank, Arcapita, owned by Saudis, but there is only a slim chance of the deal succeeding.

Arcapita are said to be offering just 2p a share – valuing the company at £5.77m – but already the shares had dropped to 1p at the close of trading, though after hours sales boosted it to 1.30p. Both are all time lows for the company and a statement from the firm warned ” there can be no certainty of an offer for the Company being made. ”

The company is worth just £3.6m – virtually a pittance because of its huge debts.

A take over by Arcapita Bank will not be good news. Watch this space for new revelations about this firm and some disturbing stuff about AssetCo which has been sent to me by email.

Exclusive:London’s fire brigade owners to go bust owing £140m on Monday unless a take over succeeds

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AssetCo: In a even deeper hole Pic courtesy TheScottishSun

AssetCo, the owners of London and Lincolnshire’s fire engines will go under on Monday, owing a staggering £140m to creditors unless a take over deal is agreed in the next 48 hours, a registrar’s hearing was told on Thursday evening.

In an extraordinary move in advance of Monday’s Companies Court hearing to examine thecompany being liquidated or going into administration, directors of AssetCo , lawyers, and  investment bankers sought to grab £86,000 in fees before the company went bust.

 Matthew Parfitt, lawyer acting for AssetCo, revealed that lawyers and investment bankers working on potential take over bid said they would ” down tools” or ” down pens” on saving the company unless the Registrar, Mr Briggs, validated fee payments immediately.

He  said  two directors, Tudor Davies and Tim Barrett, threatened to quit the company today (Fri) unless the court authorised payments of £25,000 for a week’s work and up to £1000 for expenses for hotel bills and meals. It was revealed Mr Davies is charging AssetCo £3000 a day for his work and Mr Barrett £2000 a day.

Mr Adam Goodison, acting for creditors Northern Bank, owed over £1.3m, revealed the figures, when he opposed any move to pay out the cash. He speculated whether there was ” panic among the professionals working for the company ” that had made them seek this order. Other creditors were sitting in the Room 412 at the High Court to observe what was happening to their money.

Mr Briggs described Assetco’s submission as ” extremely unattractive” and agreed with Mr Goodison that the company was putting ” a gun to the head of the court” by threatening to ” down tools”unless they received ” a substantial amount of cash.”

He refused to authorise the payments saying ” he hoped the gun will now not go off.” Instead he adjourned any decision to Monday’s hearing which stopped directors getting preferential treatment.

The scale of AssetCo’s woes were revealed in a submission from Mr Parfitt. They show that on Monday it could  go down owing between £117m and £140m and that money was disappearing on a daily basis.

Among the  major new creditors are state owned Halifax Bank of Scotland which is owed £12m and energy company, EDF, which suggests AssetCo may not have paid fuel bills for premises they run in London. Others include FD Direct, the Inland Revenue.

 He tried to talk up the one unnamed bidder still  said to be  in advanced talks saying the deal would mean all creditors would be paid in full ,all bank loans restructured and the company recapitalised. But his statement to the court means that four out of five potential bidders have now walked out.

Mr Briggs queried why in these circumstances the company had not give in confidence details of the bid to the court – which happens in similar cases- so the court could decide itself.

 Mr Goodison went further: ” If this deal is so wonderful why is there any need for this order and it would be unnecessary if it goes ahead.”

Then he detailed the demands for payment. They included a £25,000 flat weekly fee from a foreign investment bank which will get hundreds of thousands of pounds from a success fee if  it goes ahead and £36,000 to a firm of solicitors that has drawn up  the plan for administration.

The only people who came out well were Mr Parfitt and Mr Goodison who declined to take costs for the 90 minute hearing.

Matt Wrack, FBU General secretary said: “The demands the directors and advisors made to the court beggar belief.
“The London and Lincolnshire fire brigades do not own their fire engines and kit and are in crisis because they privatized all of their operational assets. Both brigades, the Mayor of London and Government have shown extraordinary complacency.
“The entire operational assets of both brigades could be seized by creditors and sold off in full or in part. Neither brigade appears to have any fallback plan of any credibility.
“The foolish decision to privatize all fire engines and kit leaves them sitting on the sidelines with no power over what happens to their critical operational assets.
“What was put before the court is a public scandal and makes clear in whose interest private companies work. Yet the only people making an issue out of it are the firefighters on the ground who do care about what happens and the impact it could have on public safety.
“There must be an end to privatization in any critical emergency service.”

 My comment on this is simple. Apart from this being another example of City directors blatantly trying to fill up their boots with oodles of cash at the expense of other people , questions must be asked about all the people who agreed that this company should be given multi million pound contracts. In London I am afraid this includes Labour mayoral candidate Ken Livingstone and Val Shawcross ( he declined to give a quote to me for a Tribune article this week), Boris Johnson  and Brian Coleman, chair of the fire authority, who extended AssetCo’s role. In Lincolnshire I am told senior officials were involved with the firm and then there are all the former fire chiefs who taken jobs with them.

AssetCo shares dropped nearly 13 per cent today to an all time low of 2.22p making it  worth just £5.77m. If  on Monday AssetCo goes down, there must be  an official inquiry.

Predators stalk the corpse of London’s failing private fire firm

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Not their vehicle but the symbolic state of AssetCo. Pic courtesy: TheScottishSun

Like encircling vultures, bidders across the globe are now looking  at the dying corpse of AssetCo, the floundering private fire company, for a cheap buy  as it shares hover around-3-5p mark.

Virtually all the bidders are potential asset strippers looking to buy cheap and then re-sell the company for a potential fast buck. Here is the full list, as far as I can glean. They have some interesting baggage as well.

Still with a bid on the table – but nowhere near the earlier offer of 14-21p a share- is Arcapita Bank  a Bahrain based company run by a wealthy Saudi.

The bank has run up big losses because of the credit crisis and lack of easy credit from financial institutions for private equity speculations. Its latest accounts (2010) post losses of $559 million. It is currently refinancing a $ 1.1 loan by raising cash from shareholders.

It makes its money in US, UK, Singapore and Far East and the Gulf by investing in firms for about seven yrs, restructuring them, and reselling them at a profit. (can be anything from clothing, aircraft manufacturers, retirement homes, dentistry and electricity).

Its most controversial investment is in Cypress Communications, a US high tech company, providing firewalls for US companies. Its bid became embroiled in a row when Arcapita’s chairman, Mohammed Abdukaziz Al Jomaih (27th wealthiest  person in Arab rich list) was accused of secretly financing Osama Bin Laden. His name is on seized list obtained in an anti-terror raid in Bosnia. He claims that he is not the person on the named list but that it is someone with the same name who is conveniently now dead.

Despite this Arcapita found itself forced to sign a National Security Agreement banning all but US nationals holding top posts in its acquired company and only US citizens able to handle sensitive network and security info. Don’t believe me. Read it at  http://bit.ly/j0z0gO .

Abdulaziz Hamad Al Joiah is vice chairman. Another Saudi Arabian. MD of Aljomaih Holding Co and director of Bank Al Bilad, Riyadh. He is chairman of Principle Insurance Holding – a Muslim car insurance company targeting 2 million Muslim drivers in UK –run on Takaful principles – a sort of Muslim mutual co-operative.

Another bidder tipped by Bloomberg is Florida based Seacor Holdings. The Fort Lauderdale company with international interests in supplying  the offshore oil industry  suffered a bad knock  in the wake of Obama’s ban on drilling in the Gulf of Mexico after the BP oil disaster. It is trading at a loss and has had to warn shareholders of potential future losses. Not a good bet.

According to City AM there are two other interested parties. Investindustrial, an Italian based company, that invests in a wide range of companies ( from chemical companies to Ducati motor bikes) from Italy, China, Thailand and USA  and again is interested in making short-term gains.

The only British firm is Consilia Partners from  Manchester. It describes itself as a turn around company  and AssetCo would join an Ipswich catering equipment distributor and an Egyptian marble company in Cairo as its other investments, according to the Manchester Evening News.

 None of this seems to me to bode well- particularly as AssetCo is facing a new creditor, the Northern Bank, with a demand for £1.3m. What seems more likely is  a serious tip-off from City Hall – that the London Fire authority may prefer AssetCo to go bust, go into the hands of an administrator, and be picked up by Capita or Serco , both mega British companies that target public services ripe for privatisation.

Otherwise the idea that the London fire brigade’s extensive fleet of engines will fall into the hands of an Arab company whose boss was once suspected of funding al-Qaeda; an US company in trouble over the Gulf of Mexico oil spill; an Italian firm with a reputation for quick fix investments or a Manchester ” turn around” firm is hardly the best news for Londoners.