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

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

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.

London firefighter firm recruiting Brits for UAE military support

 

A UAE Hawk jet -part of Assetco's training programme. Pic courtesy http://www.militaryimages.com

The company that owns  and maintains London’s fire engines  is  recruiting British firefighter instructors to train the military in the United Arab Emirates.

They are offering tax-free salaries of £46,812 a year  for  British recruits just as Abu Dhabi has joined the Saudis to help Bahrain’s  rulers  put down dissent among pro democracy demonstrators in Bahrain in the most brutal way. Reports have included torture of nurses, removal of people from intensive care units so they can be left to die and intimidation and possible murder of hospital surgeons. See this Sunday Telegraph report  http://bit.ly/fNNvug

 UAE jet fighters are  also preparing to join the coalition of the willing against Colonel Gaddafi in Libya. They are planning to send 12 fighters and are blaming their civil unrest on the Iranians.

AssetCo, the  troubled fire privatisation company, is hoping to get £40m out of a £120m deal with the  Gulf State’s armed forces to boost its profitability. It has been facing severe problems in Britain, including having to raise £26m from investors and through a  share placing. Revenue and Customs has issued a winding up order against AssetCo seeking at least £4m and they have to pay off a debt to the state-owned Lloyds TSB.

The deal was one of the last negotiated by former chief executive, John Shannon, before he resigned after a huge row  with the rest of directors over the share placing.

 Now they are  desperate to recruit  trained staff so they can fulfill it. The advertisement promises a company car, free medical cover and flights home to Britain. See here. http://bit.ly/ftpdZi

The Telegraph report on Bahrain atrocities, the AssetCo contract and job advertisement can be seen together here. http://bitly.com/i4yYFk 

Matt Wrack, general secretary of the FBU, has written to David Cameron, to protest about the deal.

He said: ” The clampdown in Bahrain has resulted in a significant number of protestors being killed. The clampdown, including martial law, is supported by armed forces from Saudi Arabia and from the UAE.
… I hope you will make it clear that it is not acceptable for them to take British public money, and also to assist the armed forces of the UAE … I hope you will insist that any company which takes on such work in future, does not also undertake work for military clients involved in the suppression of democracy.
May I remind you that, in 1963, fire hoses were turned on school age civil rights demonstrators in Birmingham Alabama. Ever since that deeply alarming moment, fire services have sought to maintain an independent role as a result of their humanitarian responsibilities. We now have a UK firm providing an essential aspect of our emergency service which has close commercial links to a brutal and anti-democratic military. All the talk from politicians about support for democracy in the Arab world is so much hypocrisy if they allow UK public services to operate in this manner. AssetCo and its directors clearly have no regard for the humanitarian role of our service, and are only in it for profit.   ”

It seems extraordinary to me that a  foundering British company is poised to make millions out of Middle East  misery and recruit desperate British people to do it.

AssetCo crisis: Shares in doldrums as investors lose faith

John Shannon - forced to stand down. Pic courtesy Belfast Telegraph

 Assetco, the badly bruised owner of London and Lincolnshire’s fire engines, is still in trouble despite seeing off winding up petitions from Revenue and Customs and law firm, Nabarros, for millions of pounds.

Shareholders hoping to make a quick buck on a rebound have instead seen their investments fall below 10p a share despite attempts by stockbrokers to recommend the company as a strong buy. Shares have fallen to just 8.20p – the lowest so far.

One commented today:

” I remember posting only a few weeks ago that IMO 8.5p would be a fair price for these shares, but now I’m not so sure. Although I am sure that all the lackies at AssetCo will be posting on hear(Sic) to give all sorts of reasons why this is just another temporary blip and that soon the price will rocket on up! When will this day come? Never in my opinion”

However there are other disturbing signs in the wind – offshore investors like Bermuda Bank have been buying in – and Verdes Management, a company turn round specialist, are demanding a more ruthless management team.

 Recently Rock Nominess Ltd- a company formerly owned by Lord Ashcroft- but now owned by City stockbrokers, Sir Charles Stanley, has increased  its shareholding. The company’s  chair is Sir David Howard, former Mayor of the City of London, obviously hoping for a long term gain.

 Previous updates:

March 25: John Shannon, chief executive of AssetCo, has resigned after being defeated by other directors over the massive dilution of its shares  caused by the  placing to pay off debts and a huge Revenue tax bill. He still has a subsantial shareholding.

This followed two days of high drama with Shannon derailing the company’s meeting by refusing to vote for the extra cash, approaching Arcapita a Bahrain bank to invest, and then being forced by a court injunction brought by other directors  to let the £26m bail out through a share placing go through.

Shareholders are divided about this. Discussion on two investment sites can be shows this  and the man in charge of Assetco’s industrial relations is offering advice to investors, showing how nervous they are . See http://bit.ly/g6Qiqq and http://bit.ly/f2YTY7

March 18: Desperate AssetCo has had to raise another £10m -making £26m in all- from shareholders in a rush to pay creditors demanding their money in case it goes bust. Shareholders worried- London fire brigade should be.  Earlier update:since writing this it is reported that creditors will face delays in payments because of the debt crisis hitting the firm. See http://bit.ly/hxmAUh

The extraordinary crisis surrounding AssetCo, the private company which owns and maintains London and Lincolnshire’s fire engines, has taken a dramatic new turn with the decision of its three main directors to quit their posts.

John Shannon, the company’s founder and chief executive; Tim Wighton, chairman, and Australian Scott Brown, the recently appointed chief financial officer, are all standing down as part of a desperate move to regain public confidence in the company.

 The company has been forced to raise £16m from the stock market to reschedule its debts and fight a winding up order from Revenue and Customs after failing to pay a £4m-£8m demand for tax.

The company’s stockbrokers, Arden Partners, are confident that they will raise the cash – but it seems to have come at the price of  John Shannon losing complete control of the company that he founded. Only weeks ago he and his top directors were thinking they could become multi-millionaires by selling off the firm on the back of the London fire dispute and fire minister Bob Neill’s promotion of private companies to take over  the ownership and maintennace of fire engines across England.

Cadogan PR ,who handle the company’s financial press, confirmed the directors were going. They pointed out that Tim Wightman, the chairman, would have stood down at the annual meeting but was leaving early. John Shannon, who has a huge stake in the company will keep his big shareholding, guarantee the company’s multi-million pound overdraft, and probably stay as a  director. They did not know what Mr Brown intended to do. All are likely to be replaced by outsiders.

Shareholders , hoping to make a fast buck from privatisation contracts, are now seeing a massive dilution in their holdings and are speculating on the Interactive Investor website whether they are going to have to pay out lots of cash to the outgoing directors. They have now seen an amazing 80 per cent drop in the company’s share price and have no chance of it going back to its original high because of the massive dilution of shares.

FBU general secretary Matt Wrack said today:
“This has the feel of a company in meltdown.  But this is not any old company suffering from the economic climate.  Because of the contracts it has obtained from the London and Lincolnshire fire authorities, every person in London and in Lincolnshire depends for their safety on the health of this company.  If AssetCo goes down, the banks own all our fire engines.  Even if the fire authorities manage to buy the fire engines back, there will be no one to maintain them.
“All this unnecessary danger stems from a bit of political dogma which says that there is nothing the public sector can do which the private sector cannot do better.  We had no concerns about the maintenance of the fire engines while the fire authorities did the job themselves.”

He called for fire authorities to take back the maintenance of the engines. London Fire Brigade are unlikely to do this and Brian Coleman, the Tory chair, must be very upset to see John Shannon stand down.  No more wining and dining from him in Westminster or free £350 Harvey Nicks Christmas hampers.