Probe launched into alleged
multiple financing scam linked to fruit company. Brendan Malkin
reports.
Go deeper with GlobalData
Once again the UK leasing industry has found itself to be
the victim of an alleged multiple financing scam.
The latest one, involving around £30m (€34m) of
alleged multiple and fresh air financings, has sparked a rash of
legal actions, bankruptcy petitions, and at least one winding-up
application by lessors seeking to make recoveries.
The case centres on claims that a
Worcester-based supplier of polytunnels issued several invoices for
single items of equipment.
Also, in some instances, invoices were issued
by the supplier even though the equipment was never delivered to
the lessee.
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By GlobalDataUp to 25 leasing companies are believed to have
been victims of the scam.
They include: European Corporate Finance (ECF),
SG Equipment Finance Ltd, Bank of Ireland, CIT Vendor Finance, GE
Capital Equipment Ltd, Hitachi Capital Business Finance, Siemens
Financial Services, Barclays Asset & Sales Finance, Clydesdale
Bank Asset Finance, Lombard North Central, Lloyds TSB, Bank of
Scotland, Summit Asset Management and Eastern Credit Limited and
Kingsway Asset Finance.
Concerns mounting
With concerns mounting that the money forwarded
to the supplier has disappeared, SG Equipment Finance Ltd and
Cheshire-based ECF, as well as BDO Stoy Hayward, the accountancy
firm, are understood to be “leading an investigation” into where it
has gone, a source involved in the case said.
Both ECF, run by Garry Ridsdale and Richard
Jackson, which is believed to have been stung for as much as
£750,000, and also SG Equipment Finance Ltd did not respond to
requests for comment on the matter.
It was unclear at time of going to press
whether lease brokers were involved in the chain of
transactions.
The lessee is believed to have been a
Barnstable-based company with links to three other companies,
Well-Pict European, Advanced Marketing Services and Hiller Farms,
which all entered administration last August.
BDO Stoy Hayward, the administrator of these
companies declined to comment.
According to sources connected to the scandal,
the perpetrators found it reasonably easy to carry out the alleged
fraud.
Serial numbers were not stamped on all the
polytunnels’ aluminium frames – on top of which was placed
transparent polythene to protect crops from inclement weather
– making it hard for leasing companies to identify which tunnel
belonged to them.
“If there are 50 of these tunnels, how do you
know you are the owner of numbers one to five,” said one source
connected to the case.
“Some of the frames were serialised, but not
all of them,” he added.
The perpetrators are believed to have used a
number of different companies to carry out the alleged scam.
“There were a number of inter-company
transfers,” said another person with knowledge of the matter.
Petitions for bankruptcy
Various petitions for bankruptcy are believed
to have been issued by leasing companies against at least one
director alleged to have been involved in the case
Commenting on the bankruptcy claims, one person
involved in the case said: “One financier is ahead of the curve in
presenting a petition for bankruptcy.”
The source added: “This case is similar to
Global EPP [see box, right] in that the view being taken is that
the alleged perpetrator should be made bankrupt.
“But I do not believe there is much light at
the end of the tunnel,” he added.
Kingsway Finance, which is believed to be a
creditor of Well-Pict, is understood to have issued a winding-up
petition against one company linked to the fruit growing
company.
Various legal actions have also been launched.
These are believed to include allegations of breach of contract for
non payment of lease rentals.
Allegations of forgery are also being
investigated, one of the sources said.
Lessors contacted for comment did not return
calls.
