The report, published on the Companies House website, blames a series of unspecified arbitration claims against Cardy, totalling £3million, for reducing the company’s liquidity to a level at which “it could no longer meet its ongoing cash requirements and pay its debts as they fell due”. The administrators will be recommending, at a creditors meeting to be held in London today (Wednesday 12 October), that all available funds recovered from the non-trading company are distributed to creditors and that the company is then dissolved via a Creditors Voluntary Liquidation process.
Documents published on the Companies House website record almost a thousand creditor claims against the company, with more likely to be in the pipeline. Many of the claims are from small/ medium sized Kent-based businesses ranging from several £100s to £10s of thousands. The administrators have identified NatWest Bank, which is owed £347,953, as a secured creditor and former employees, who are owed £165,274 in unpaid wages, as preferential creditors. This leaves an estimated £556,000 to be shared out amongst the remaining creditors including HM Revenue and Customs who alone are owed £304,000 in unpaid taxes and national insurance.
Said Driver “the collapse of Cardy Construction will have a devastating impact upon the 200 people who worked loyally for the company and the hundreds of businesses in Kent and elsewhere who will now have to absorb losses which could easily destroy some of them. This is appalling news for Kent’s economy which is ill-placed to deal with a multi-£million hit like this”.
He added “I’m extremely concerned about these revelations and the implications that they have for the controversial Ramsgate seafront Pleasurama development. In March 2015 Thanet Council's then Leader Cllr Iris Johnston and Cabinet Finance boss Cllr Rick Everitt signed on behalf of TDC a contract with Cardy Construction to become the builder of this large £30million development which includes 107 luxury flats and 60 bed hotel. The question must now be asked what due diligence did TDC and Cllrs Johnston and Everitt conduct into Cardy Construction before the contract was signed? Was TDC aware of the arbitration cases pending against Cardy and their impact on the company’s financial stability? If not why not?”
He went to say “Debts of £18million don’t accumulate suddenly overnight. It took many months for this terrible situation to develop and the warning signs must have been clear during 2014/15 when TDC was negotiating with Cardy. Did TDC spot these signs? If they did what action was taken to protect TDCs interests? If they didn’t why not?
“I’m also extremely concerned by the actions of Cardy Construction’s managing director, Mike Stannard. According to the administrators report Stannard, and I presume his fellow directors, were aware of Cardy Construction’s financial troubles long before it entered administration. So why, just a week before the company was taken over by administrators RSM Restructuring LLP, did Stannard buy the freehold of the Pleaurama site, as previously agreed by the Labour controlled council in 2015, using £3million loaned to him by the financial backer of the discredited former Pleasurama developers SFP Ventures, Mr Colin Hill. It seems very strange to me that at the very time that the company which was going to build the Pleasurama development was going out of business, its managing director buys land which it would have been unable to develop. It simply doesn’t make business sense to me. I think Mr Stannard and Mr Hill need to provide the people of Ramsgate with an explanation about this mysterious transaction.
“Furthermore why did TDC and its new political bosses UKIP who had seized control of the council from Labour in the May 2015 elections, allow the previously agreed sale of the Pleasurama freehold to go ahead? Surely the council and its political leadership must have known just before the land sale happened in July 2016 that Cardy was in serious financial difficulties. Surely the right thing to have done, if they did know, would have been to put a hold on the sale of the land until the situation had been properly investigated by TDC and its legal advisers. Sadly nothing was done. The land is now under the control of a company which is managed by a long-standing colleague of SFP’s Shaun Keegan and Colin Hill and there is a loan charge on the land for £3million from offshore Panamanian registered Mintal Services Inc. which is linked to Colin Hill”.
|Labour Councillors Everitt & Johnston celebrate in March 2015 doing the deal with Cardy's Stannard . If only due diligence had been more robust|
As my heroes the Sex Pistols Said Do you ever get the feeling you've been cheated?