Assetco: The negligent privatisation audit that has cost Grant Thornton over £20m in damages

Top accountancy firm loses appeal over failing to spot forged documents in huge London fire brigade privatisation scandal

A London fire engine -once owned by Assetco

The big four accountancy firms make a fat living from auditing the large number of private companies taking over public services.

But a Court of Appeal ruling last month suggests that if they don’t do the job properly they could now face huge damages claims from directors of companies who were duped by their negligent auditing.

The Assetco saga has been extensively covered on this blog. It involved the sale and leasing of the entire fire engine fleet of London and Lincolnshire to a gang of spivs and fraudsters – who were last known to still be evading justice nearly a decade after swindling investors and conning the London Fire Brigade. The Fire Brigades Union also took up the issue on behalf of its members.

ban after causing fraud

A separate investigation by the Financial Reporting Council found Assetco’s chief executive John Shannon ” causing or facilitating fraud. He was banned as practising as a chartered accountant  for 16 years – a new British record – fined £250,000 and ordered to pay £300,000 in costs.

Raymond “Frank” Flynn (former Chief Financial Officer) for  banned from practising for 14 years and Matthew Boyle (former Financial Controller) for 12 years. Additionally, £150,000 and £100,000 respectively have been imposed and they share paying  part of the £400,000 costs bill.

Grant Thornton, and the accountant who audited the company Robert Napper,  has led to a £3.7m fine for  both of them for professional misconduct. ( Napper was fined £120,000) Neither Grant Thornton nor Mr Napper made any financial gain out of the scandal. The accountant took early retirement and now lives in a bucolic Oxfordshire village developing his hobby as a wine buff.. See here.

Now the Abu Dhabi directors of Assetco who took over in 2011- straight after the London and Lincoln operations collapsed have successfully sued Grant Thornton for £22m and their case has been upheld by the Court of Appeal.

The first trial lasted 20 days, involving extensive evidence from factual and expert witnesses and consideration of a large volume of documents and of 877 pages of written submissions as well as oral submissions.

Grant Thornton appealed but lost the case. The court was told that if Grant Thornton had audited the accounts properly they would have found evidence of forged documents which inflated the value of the firm.

Fraudster John Shannon when he was boss of Assetco

The court were told Mr Shannon and Mr Flynn told GT that the “unitary payments” due under the London Contract had increased by nearly £47,000 per month (£564,000pa) from April 2009 and produced documents to establish it. The statements were dishonestly made, and the documents were forged. It was only on the basis of these alleged payments that the London Contract appeared to be profitable.

Grant Thornton argued unsuccessfully that they couldn’t be responsible for all the losses. The judges found in the company’s favour.

The Financial Reporting Council did pass its findings to the Serious Fraud Office but so far it appears nothing further has happened. Mr Shannon has thought to have moved to Thailand while Mr Flynn remains in Northern Ireland.

The most important development is this judgement could form a major piece of caselaw if any other major accountancy firm does not do its auditing job properly. It is a big shot across the bows of the big four accountancy firms to be more diligent.

Why these liars, cheats and fraudsters should be prosecuted for ripping off taxpayers and cheating London’s firefighters

John Shannon , former chief executive of Assetco. now exposed as a liar and fraudster, banned for 16 years from practising as an accountant and ordered to pay £550,00 in fines and costs

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This month one of the most devastating reports into a privatisation rip off was published by the Financial Reporting Council, which regulates chartered accountants. It involves a saga much reported on this blog, the failed privatisation of London and Lincoln’s  fire engines, handed over to what are now revealed to be liars and fraudsters who ran Assetco at the time.

The three top directors, chief executive, John Shannon; chief financial officer, Frank Flynn; and group financial controller, Matt Boyle, could not even be bothered to attend a tribunal hearing to defend themselves against 27 allegations of misconduct. Shannon and Boyle are thought to be somewhere in South East Asia Flynn is in Northern Ireland

Between them they lied and hid millions of pounds ripped off from income paid by London fire brigade – the London Fire and Emergency Planning Authority – through a string of Northern Ireland companies and a consultancy to Abu Dhabi and falsified invoices from the London authority to boost the income of Assetco  duping shareholders so  they could live on the hog with large salaries.

The worst culprit was John Shannon  who has been banned as practising as a chartered accountant  for 16 years – a new British record – fined £250,000 and ordered to pay £300,000 in costs. This was the same man who wined and dined the now disgraced former Tory chair of the London fire authority, Brian Coleman, while simultaneously ripping off the authority for personal gain.

His story included in a damning  FRC report  is a trail of dishonesty and improper financial gain for himself and his family, His first act  in 2008 was to take £1.5 million out of Assetco, ostensibly to invest in a Northern Ireland property company, Jaras Property Development. In fact the report found  the money was transferred almost immediately from the company to Mr Shannon’s personal bank account to pay off a loan.

To compound his action when Assetco’s accounts were prepared for 2010 he created a false invoice and lied about the use of the money to fellow directors and the auditors, Grant Thornton.

The second dishonest act involved Assetco’s take over of Graphic, a company that provided lettering for vehicles, in 2010. Mr Shannon claimed he was owed £685,000 by the company. No documentation was ever found to prove the debt but the money taken from Assetco was the exact same money owed by this son, Joel, to clear a debt with another business he was running. The report concludes this was a sham.

He then moved to fiddle the accounts of another Assetco business, Assetco Abu Dhabi, which was launched with a  £15m share issue. Included in the costs was a management fee to a firm called XYZ2 for £900,000. In fact there were no management services provided by this company, instead the money was used to pay off  interest owed.

Earlier Mr Shannon and his fellow directors Frank Flynn and Matt Boyle inflated the goodwill value of three other companies,UV Modular Limited (“UVM”), The Vehicle Application Centre Limited (“TVAC”) and Simentra Limited (“Simentra”). All three had been bought by Assetco and had huge operating losses, all became insolvent, yet between them they were valued at over £15m.

UVM which built ambulances and mobility vehicles for the NHS was ” in a parlous financial condition ” and collapsed. It got contracts from the NHS by offering cheap deals which meant it lost money.

TVAC built chassis and fire appliances was acquired in 2007 and went bust in 2008 and was an operational disaster. But it was obviously intended to service fire engines for London.

Simentra had just three staff and was supposed to provide management advice for emergency services.

The report found Mr Shannon was well aware of this yet  allowed the £15m for goodwill to be included as an asset in the company’s accounts.

Mr Shannon, Mr Flynn and Mr Boyle also inflated income from the London fire authority on purchasing equipment and  providing emergency crew training. All this led to inflated accounts which Mr Shannon claimed he had not seen but the report found that he had lied to them about his knowledge of what was agreed to be published in the accounts. There is an earlier report on my blog here.

The conclusions against Mr Shannon are stark :” While there have been no actual convictions, certain of the activities contained within the allegations could be characterised as causing or facilitating fraud. The Jaras and Graphic Allegations amount to fraud on AssetCo by Mr Shannon. The XYZ Investment was also a fraud.”

The report also says the level of dishonesty even put the fire fighters  work at risk. It is as well that Assetco  operations in London and Lincolnshre went bust before the tragic Grenfell fire or their services would have only compounded the problems.

Most of the misconduct by Flynn and Boyle was to assist in covering up rather than exposing the dishonesty of Shannon.

Raymond “Frank” Flynn (former Chief Financial Officer) for  banned from practising for 14 years and Matthew Boyle (former Financial Controller) for 12 years. Additionally, £150,000 and £100,000 respectively have been imposed and they share paying  part of the £400,000 costs bill.

The Financial Reporting Council has a memorandum of understanding with the Serious Fraud Office which could launch a criminal investigation.

The SFO told me that they were aware of the case but could neither confirm nor deny whether they would take action. In my view they should pursue these people – even if they have left the country- with the aim of securing convictions so they can spend some time in British jails.

 

 

 

 

Blog in 2017: The Grenfell tragedy has resurrected the madness of fire privatisation

Grenfell Tower: The next morning Pic credit: Wikipedia

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This year my small news site received an extraordinary boost from a five year old post which appeared to have been regenerated by the Grenfell fire tragedy.

The Grenfell disaster showed the bravery of the London fire brigade in tackling such a grim scenario. Heroism and extreme tragedy side by side.

The post that got revived in the wake of the fire was the almost unbelievable story of how an Old Etonian baronet living in a semi in Wellingborough, Northants had got his hands on the management of London’s entire fire engine fleet for £2. It is probably still the most egregious act of privatisation in this country. He of course had to hand it back after a few weeks as he couldn’t run it.

Sir Aubrey Brocklebank: Sacked by the London Fire Brigade; Picture courtesy Daily Telegraph

The public authority had been powerless when the dodgy private company they gave the contract to maintain the fire engine fleet- Assetco London – handed over  London’s fire service to the baronet as the directors realising the game was up and fled the scene.

The good news here – though it has never been reported  by mainstream media-  is the authorities in their own slow way are ensuring the perpetrators get their just deserts.

Grant Thornton , the auditors for Assetco, have been fined  £3.5m (reduced to £2.275m  after they co-operated with the Financial Reporting Council) and found guilty of no fewer than 12 cases of professional misconduct.  The details are in this blog.

Assetco’s John Shannon stands astride two London fire engines

Robert Napper, the individual accountant  responsible for auditing Assetco was fined £200,000, reduced to £130,000 after  he co-operated  with the inquiry. He had already retired but I traced him to an Oxfordshire village enjoying his expensive wines. 

Now Assetco directors John Shannon, Raymond ” Frank ” Flynn and Matthew Boyle are to face a disciplinary tribunal by the Financial Reporting Council on January 15. The statement is here.

The press release reads: 

“The Formal Complaint contains multiple allegations against each of Mr Shannon, Mr Flynn and Mr Boyle. The Formal Complaint includes allegations they acted dishonestly or recklessly; that they breached the fundamental principles of integrity and objectivity in the manner in which they prepared the financial statements; and that their conduct fell significantly short of the standards reasonably to be expected of members of Chartered Accountants Ireland (CAI). The complaint covers a wide range of issues which pervaded AssetCo plc’s financial statements.”

Some idea of what was going on has already been covered on this blog. Don’t hold your breath that the London Evening Standard will cover the story.

The original blog attracted over 2,500 hits when it was published. This year it topped my ratings with over 14,700 hits – showing that readers are interested in such issues.

Altogether over five years it has received some 20,000 hits.

The other stories have been posted on both my blog and byline.com – so the figures on my blog will be a small proportion of the number of hits on the stories.

The second highest hit from readers tells the heroic story of a London Midland train driver whose quick reaction in nine seconds prevented a commuter disaster near Watford. It  came out in an accident report and had over 5170 hits and can be read here.

Two stories about the plight of the Conservative Party also rated highly. A story revealing that membership of the Conservative Party had plummeted to 100,000 attracted nearly 5000 hits and one on changes to the Tory Party constitution attracted well over 1700 hits. The two blogs are here and here and on Byline here and here.

The real block to enormous boundary changes in Parliamentary constituencies is the DUP and this blog  and byline.com disclosed this last July. The links are here and here. 

On my site it got 2600 hits – mainstream media have finally followed it up last week but put the blame on Jeremy Corbyn instead.

Also popular was a blog on how secret influencers are bankrolling right wing  think tanks by the organisation Transparify . This attracted over 2400 hits on my site and the links are here and here.

Dave Prentis, general secretary, Unison Pic Credit: Twitter

The attempt to force Unison to rerun the election for the general secretary Dave Prentis also attracted a lot of readers. Again the public hearings by the Certification Officer received no coverage in mainstream media except the Morning Star. All the blogs received over 1000 hits – the largest being  over 1850 hits for a blog publishing the statement of a former union official who accused the union of ” anti Democratic practices”. The link is here and here. 

The issue is not quite over as a judge is due to hear the opponent’s case again  for an appeal on February 8.

Three other issues made the top slots – the  bonus payments to top DWP civil servants who set up the hated Universal Credit payments which I also wrote up for the Sunday Mirror; the scandal of 3.3 million pensioners who will have to wait years for the state pension and the prospect of two Tory Lord Chancellors facing legal action for institutional racism over the appointment of judges and tribunal members.

All this has to show that there is a  public appetite for investigative journalism and the mainstream media are increasingly ignoring important stories by sticking to a narrow agenda. Much more to come in 2018.

 

 

 

 

Revealed: The bucolic wine buff accountant who let privatisation spivs fiddle London fire brigade

Robert Napper: Pic credit: Twitter

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He has been fined £120,000 and barred for three years from his professional body for ” professional misconduct ” by the Financial Reporting Council in April for his part in allowing a now bust private firm to fiddle its income from London Fire Brigade.

But before this happened Robert Napper, a partner with Grant Thornton, one of the big accountancy names, had already quietly retired with his pension to live in the rural Oxfordshire countryside and become a pillar of the local community.

Grant Thornton will have to pay a £2.3m fine for their part in allowing Assetco to fiddle the books after the company took over responsibility for maintaining London’s 700 fire engines in a privatisation deal which went badly wrong.

The scheme had been pushed by the now disgraced former Tory chair of the London fire brigade, Brian Coleman, to save money and curb the power of the Fire Brigades Union. Coleman was wined and dined by the director John  Shannon and given a Christmas hamper from Harvey Nicks for his trouble.

The union all along protested about the way the company was run – but even they did not know it was fiddling and inflating the books with false invoices for claims that were never made ( see my earlier blog).

To be fair neither Robert Napper nor Grant Thornton made any money out of it – indeed the auditors ended up as creditors with unpaid bills. But they did allow enormous latitude to the directors of Assetco, John Shannon and Frank Flynn, to fiddle the books and rip off the company, the shareholders and ultimately the taxpayer.

So who is Robert Napper who got duped? He lives in East Hagbourne in South Oxfordshire near Didcot.  It is a village of 1882 people with  a mixture of  modern properties (where he lives)  and many  chocolate box cottages. It has a community shop and post office which Robert Napper is one of the directors.

Village Cross at East Hagbourne. Pic Credit: Creative Commons Rob Stallard

He was a senior accountant with 23 years experience who as a partner – one of the top paid jobs at Grant Thornton –  and should have known better. The report by the FRC distinguishes between his role and junior staff who were inexperienced in handling Assetco’s accounts.

It also turns out that he is a serious wine buff – his Twitter account includes many pictures of fine wines- and the best food to accompany it. Among these are his Christmas 2015 selection ( see below).

Robert Napper’s Christmas wine collection

He will have to pay the fine in instalments. I contacted him to ask him if he had anything to say about the scandal or whether he knew the whereabouts of the people who had duped them.

He said he could not comment because of legal reasons though he did say he was not appealing the findings against him.

As for John Shannon and Frank Flynn they appear to have fled the country – he thought one of them could be in Thailand. Anyone who knows where they are could  they contact me and I would be very grateful.

 

 

Revealed: Faked bills and dodgy deals How Assetco conned auditors and ripped off London and Lincoln’s firefighters

A London fire engine then owned by Assetco

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The scandal that led to the huge £3.7m  fine ( reduced to £2.4m after co-operation) against  accountants Grant Thornton and ex  partner Robert Napper is revealed in a dry 56 page report by the Financial Reporting Council.

The biggest con by the privatised company  Assetco responsible for  owning and maintaining the capital and Lincolnshire’s fire engines was in faking additional cash payments from London’s fire brigade when it was asked to do  more work.

Directors of the company took advantage of three extra requests that were approved by London fire brigade – involving new equipment for fire engines and emergency training for 700 of the capital’s firefighters.

In all three cases they fiddled the books to boost the value of the company to shareholders and lied about the cost of the contracts to  gullible auditor Robert Napper and  accountancy firm Grant Thornton.

The London fire brigade wanted its engines to be equipped with new foam pumps and thermal imaging cameras. Under the privatisation deal they could charge large sums of money per month  under a  leasing deal for fitting this equipment. But the greedy directors were not satisfied with this great deal. They decided they wanted icing on the cake and claimed even more to make their company look more profitable. And not just a few pence -literally millions of pounds.

The new foam pumps meant that Assetco could and did charge an additional £2.6m to London fire brigade. But the directors claimed that additionally they were charging London fire brigade another £46,975 a month from April 2009. This produced promised income of another £4.991 million over the next 14 years. But Assetco never even sent an invoice to the London fire brigade. for these sums. It was a complete fake – the money did  not exist and the auditors didn’t spot it.

The same applied to the thermal imaging cameras. The 140 cameras were leased to London fire brigade at a cost of £331,443 a year or £27,620 a month.  But then the directors told the auditors that it had cost over £1m to purchase and fit the cameras and that the London fire brigade was paying over £57,000 a month. This generated a total of  over £5,875m over 13 years. Again this was a complete fake and it would have shown a profit margin of 80 per cent. This went unchallenged by Mr Napper despite queries by his team.

Finally they fiddled the emergency training programme for 700 firefighters. They claimed they were receiving another £71,000 a month for ladders and hoses and guards that they were already were being paid under an existing contract.  They also fiddled the costs. They said it would only cost the company £2m to provide it over five years. In fact it was over £6m.

This catalogue of deceit was aimed at inflating the value of the company. It was particularly despicable because the directors were using the need to improve London’s  fire fighting capability as a vehicle to fiddle the books. But that was not all they were doing and I will come back to it in another blog.

 

 

 

 

 

Fined £3.5m for professional misconduct: Grant Thornton approved dishonest accounts for London and Lincolnshire’s privatised fire engines

Grant Thornton: A big fine for professional misconduct Pic credit: Wikipedia

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In 2011 this blog was involved with the Fire Brigades Union in investigating the handing over of London’s and Lincolnshire’s  fire engines to a private company called Assetco.

The company nearly went bust  in 2011 owing £140m. Shareholders and banks hoping to make money from privatising the emergency services lost millions and small shareholders were ruined.

The  City Hall Tories under Brian Coleman, then  the elected chair of London’s fire authority now nowhere in public life, saw the  flagship policy as a future blueprint for privatisation. Instead it was a disaster compounded by an Old Etonian baronet buying London’s fire engines for £2  from Assetco only to go bust himself leading to another company taking over.

Now six years later the grim and unsavoury truth has come out. A report from proceedings taken by the Financial Reporting Council against the auditors of the Assetco, big accountancy firm, Grant Thornton, and the accountant who audited the company Robert Napper,  has led to a £3.7m fine for  both of them for professional misconduct. Neither Grant Thornton nor Mr Napper made any financial gain out of the scandal.

The facts are staggering. Over two years Grant Thornton   were found to have committed no fewer than TWELVE  cases of professional misconduct which meant the accounts presented to the public were mainly fictitious. Robert Napper was found to have  ELEVEN cases of professional misconduct.

As the report says: “This misconduct adversely  affected or potentially adversely affected a significant number of people in the United kingdom.”

It points out shares were trading at £6 during this period and fell to £1 in 2011 when the real situation was known. The report adds: ” The share price in 2009 (£6) reflected financial statements that contained an inflated balance sheet and included some significant revenue that was fictitious.”

An accompanying report reveals the scale of the dishonesty and cover ups. They range from fictitious payments amounting to millions of pounds from City Hall to buying up a firm for a relative  with shareholders money and creating a rental firm that let property out to directors. So extensive was the deception that I intend to use further blogs to describe in detail what happened.

As the report says: ” GT and Mr Napper were deliberately misled by AssetCo’s  management but the exercise of proper scepticism would have led to dishonesty being uncovered.”

Grant Thornton  was fined £3,500,000, reduced to £2,275,000 after  they co-operated with council and given a severe reprimand;

Mr Napper was fined  £200,000, reduced to £130,000 after  he co-operated  with the inquiry

Grant Thornton also had to pay £200,000 as a contribution to the Executive Counsel’s costs.

Mr Napper, an accountant with 23 years experience, was seen to have acted so badly that they have also recommended he be barred for three years from membership of his professional organisation ( the ICAEW –Institute of Chartered Accountants in England and Wales) for breaching  their code of ethics.

Mr Napper, from South Oxfordshire has since retired.  The Executive Counsel of the FRC said: ” The misconduct of Mr Napper , in its totality, is so damaging to the wider public and market confidence in the standards of members and in the accountancy profession and the quality of corporate reporting in the United Kingdom that removal of the member’s professional status is the appropriate outcome in order to protect the public or otherwise safeguard public interest”.

Further inquiries by me show Mr Napper in his Linked In page was publicly  endorsed by seven people including  Perry Burton, head of London audit, for Grant Thornton. and Natasha Pettiford-White, an executive assistant at Grant Thornton. Mr Burton’s recommendation would carry considerable weight as he is an auditor of 20 years experience.

Gareth Rees QC, Executive Counsel to the FRC, said:
“The Respondents have admitted widespread and significant failings in their audit work, and GT specifically has accepted there were serious failings in the execution of certain aspects of the firm’s quality control procedures. This misconduct is rightly reflected in the seriousness of the sanctions, such as the exclusion of Mr Napper from membership of the ICAEW ( the accountants professional organisation) and the fines on both Respondents.”

Matt Wrack, general secretary of the FBU, said :

“It is mystifying that central government did not spot this scandal, when the Fire Brigades Union and firefighters themselves were warning about it for years.  Leading politicians and fire service managers were responsible for allowing a gang of spivs to take over essential equipment and vehicles, the property of the people of London and Lincolnshire.  Both of the authorities for these regions need to investigate fully to ensure this never ever happens again. ”

Grant Thornton were approached and did not reply. I have written about this in Tribune magazine.

In my view this shows that one of our big accountancy firms was derelict in its duty in protecting the public from people who obviously wanted to fleece shareholders and took no care in auditing the books of people in charge of vital emergency  vehicles in London  and Lincolnshire. It also shows the real dangers of privatisation and we cannot  trust big accountancy firms to act in the public as opposed to their private commercial interests. You will see the scale of the scandal in future blogs.

 

 

 

 

 

Fire Privatisation was flawed says AssetCo Chairman in £50m claim

                                                                      London Fire Engine: Pic courtesy i.newsrt.co.uk

The scandal over the privatisation of the vehicles owned by London and Lincolnshire  fire brigade is a never ending saga. First the company pulled out of the UK to concentrate on the Middle East  and then sold its London assets to a baronet for £2 only to have them taken over by Babcock in an emergency deal by the London Fire Brigade. ( see previous stories on this blog).

Now with a new interim report from the firm the real cost to the people who invested in a” couldn’t fail” take over of public assets is revealed in the balance sheet.

And astoundingly the chairman of the rump company, Dr Tudor Davies has now admitted publicly that the  PFI deals with the London and Lincolnshire fire brigades to take over and replace all the brigades’ engines were  based on a ” flawed business and financial model.. without any reasonable prospect of shareholder value.”

For the public record this is his signed statement in the latest interim accounts:

“The new Board has been considering claims to recover value for shareholders given the very significant decline in value following the four separate fundraisings amounting to £53m between 2009 and 2011 when, from the published accounts it appeared the Group’s financial position was satisfactory.

“As explained in the 2011 Annual Report, the massive restatements to the 2009 and 2010 financial accounts and the requirement for a Scheme of Arrangement subsequently showed a very different situation, and the differences arose from the UK businesses.  The funds raised between 2009 and 2011 had primarily been utilised in support of an apparently flawed business and financial model associated with the UK vehicle leasing and maintenance business, without any reasonable prospect of shareholder value.

“Following expert advice, the new Board is at the early stages of pursuing claims against those associated with the past for in excess of £50 million.”

His proposed launch of a £50m claim against dismissed chief executive  John Shannon and chief financial officer, Frank Flynn, among others who quit, may have little chance of success. As this blog has already reported Shannon is selling his mansion in Northern Ireland and was on the way to be declared bankrupt. Flynn’s fate is not known.

But the figures speak for themselves. The accounts reveal that by offloading the company’s UK assets to the baronet, Sir Aubrey Brocklebank, some £84m  of losses was averted.  Last August net liabilities were £51m for the two fire brigades and that  was after creditors had to settle for a £4.9m payment –  losing around 78 per cent of their investments.

Shareholders lost virtually all their money – when the shares were reduced to junk statues – some 300 times below their best value.

Shares are still trading in the remainder of the company which now is exclusively providing fire services in Abu Dhabi in the United Arab Emirates where it has made a £3m profit. One wonders what  Arab Investors would make of the shennaghins in the UK if they knew the full picture.

The lesson of this privatisation exercise seems very clear. It was bad for public services in London and Lincolnshire, bad for the banks and other big investors and even bad for the ” get  rich quick ” small shareholders who lost most of  their cash. Anybody who thought they were going to make a quick buck  out of the emergency services should think twice.

Exclusive: London Fire Brigade sacks the 2cv racing baronet

Sir Aubrey Brocklebank: Sacked by the London Fire Brigade; Picture courtesy Daily Telegraph

The  incredible scandal surrounding the botched privatisation of London Fire Brigade takes yet another mad twist.

Sir Aubrey Brocklebank, the baronet who bought  the brigade’s entire fire engine fleet for £2 just three months ago, has had his contract terminated by the London Fire Brigade today. His company has gone into administration only  four months afterv it was set up, it was among a string of companies that appear to have been set up by the baronet only to fail.

The eccentric baronet who loves to race ageing  2cv’s at  racetracks across the UK and lives in a three bed semi in Wellingborough, Northants, thought he could make a fast buck by selling on the company. There is a previous blog which will tell you everything you need to know about him on this site.

You the  council taxpayers have been  paying this man £1.5m a month to look after London’s fleet. He got this  at a knock down price because  the Greater London Authority foolishly sold off  London’s fire engines and a 20 year lease on its own maintenance headquarters in Ruislip to a private firm.

The firm was sold on to AssetCo ( which I have written about extensively) whose  own chief executive, John Shannon, dismissed by the firm, after he left it teetering on bankruptcy.  He is now going bust himself. The engines are at present owned by bankers, Lloyds TSB, one of the chief creditors of AssetCo London which had over £30m in debts and haven’t a penny to  replace the ailing fleet of engines from 2014. This has been admitted by Sue Budden, director of finance,of the London Fire and Emergency Planning Authority. She told councillors at a meeting in September: “When they look ahead and look at the big vehicle replacement that is due to start in 2014, I think they can see they are not set up to cover that.” The full story by me is on the Exaro  news website at http://www.exaronews.com.

Now it emerges  surprise, surprise that after a few months that he can’t deliver and the authority has had to use emergency powers to end the contract and has handed it over to Babcock without any tender competition. The interim contract will last next 18 months.

This is their statement:

LONDON FIRE BRIGADE APPOINTS BABCOCK TO MANAGE  999 FLEET

London Fire Brigade has appointed Babcock International Group to manage and maintain its fleet of fire engines and specialist equipment on an interim basis.

Due to a deterioration of the services provided by Premier Fire Serve Limited (previously called AssetCo London Ltd), the London Fire and Emergency Planning Authority, which runs the Brigade, has exercised its right to terminate the contract and appoint a new provider.

 While, undertaking a full, competitive procurement of the services, it has appointed Babcock to maintain the fleet on an interim basis of 18 months until the new provider has been appointed.

 London Fire Commissioner Ron Dobson said: “This move should stabilise the way in which our vehicles and equipment are managed and enable London Fire Brigade to continue to provide the Capital with the world-class fire and rescue service it deserves.”

However London Assembly’s Green Party spokesman Darren Johnson said:

“The sensible long term solution is to bring the contract in house and scrap the PFI arrangement. Many other fire authorities have a straight forward leasing arrangement. I hope that both the Mayor and the Government will see sense and recognise that the experiment with PFI has failed. We shouldn’t be taking financial risks with something so essential as our fire engines. Government funding guarentees for PFI credits could be better spent on developing an in house contract.”

what a mess!

AND THERE IS REPORT FROM DONEGAL REPORTING THIS FALL OUT

WORKERS LEFT SHOCKED AS DONEGAL CALL-CENTRE CLOSES WITH LOSS OF 30 JOBS

November 13, 2012

BREAKING NEWS: A Donegal call-centre has gone into administration with the loss of 30 jobs.

Workers at the Buncrana-based Assetco Manage Services ROI were told the bad news this afternoon.

The company, is part of a larger company, Assetco London Ltd, which works with London Fire Brigade.

London Fire Brigade failed to renew a major contract for Assetco London Ltd leaving workers out in the cold.

Shell-shocked workers at the company, based at the IDA Business Park in Lisfannon since 2006, were told the news today.

Even worse is the fact that none of the workers will be paid redundancies.

Ironically most of the London-based employees will be taken on by the company who won the new contract, Babcock.

However, the Irish company have not been given part of that new contract and will lose their jobs.

Members of KPMG, who are acting on behalf on London banks, turned up at the Buncrana company’s headquarters today to break the news.

Angry workers say they are outraged at how they have been treated.

A spokesman told Donegal Daily that they are considering their positions and are even thinking of staging sit-in at the plant.

“We have been very loyal to Assetco London and this is how we have been rewarded.

“We would like London Fire Brigade to know this and to know how we are being treated.

“There are 30 families being thrown on the scrapheap just before Christmas it’s just not on,” said a spokesman.

Exclusive:Going bust, the man who fleeced London Fire Brigade

John Shannon when he was riding high

There may be a God after all or at least an element of rough justice. John Shannon, the former chief executive of AssetCo, the company awarded a massive contract to service and replace London and Lincolnshire’s fire engines  is facing bankruptcy.

He is the man who wined and dined Brian Coleman, the former Tory chair of London fire brigade who is now facing assault charges, and gave Coleman a £350 Harvey Nicks hamper for Christmas.  He also got the notorious strike breaking contract to supply cheap labour to replace firefighters in the capital.

He brought AssetCo to the brink of bankruptcy leaving a trail of unpaid bills – one for the use of a personal executive jet  – and forcing backers of the firm to take a 78 per cut in their debts, including taxpayer-funded Lloyds TSB, now proud and reluctant owners of London’s fire engines. Small shareholders who were daft to bet on privatisation as a one way ticket to riches were ruined when they became worthless.

He lived a life of Riley claiming a salary of around £300,000 a year and paid himself dividends easily equal to that amount while the gravy train lasted. He was actually thrown off the company by his fellow directors after they discovered they were deep in debt and he tried to get a Bahrain bank, Arcapita , to take over the firm. When the dust settled they then discovered – on top of all that – he had taken out loans  of over £500,000 in AssetCo’s name on other failed businesses and overvalued property.

john shannon – now on a creditors’ petition list for debt

But it now looks as though events are catching up with him. A  journalist contact in Belfast has spotted that he is facing a creditors’ petition ( see picture) from people he owes money and they are moving to bankrupt him.

His Northern Ireland seven bedroom mansion set behind electric gates and in seven acres of grounds is up for sale  for £750,000. You can view this here ( http://www.btwcairns.com/property_specific.aspx?ID=18390) .  You can see a sideshow of  the extensive improvements he made  using money from taxpayers in London and Lincolnshire on the estate agents site.

In a way this is a great morality tale of our time. And it is not to the credit of the management of the fire authority who did nothing while AssetCo burnt. Indeed Coleman cosied up to him more than ever. And even top officials took the AssetCo shilling when they retired from LFB, hoping to make money out of the privatisation for themselves.

It will be interesting to see how James Cleverly, the new Tory chairman of  the authority, handles the rest of this contract. He appears to be ignoring the fact that it is in the hands of baronet, Sir Aubrey Brocklebank, living in a three bed semi. So far the dealings done by London Fire Brigade are no pin-up boy for privatisation  anywhere.

Revealed: The Old Etonian Baronet who snapped up London’s fire engines for £2

Sir Aubrey Brocklebank- a hooray henry owning all London’s fire engines for £2? Pic courtesy Daily Telegraph

This is Sir Aubrey Thomas Brocklebank,  6th Baronet Brocklebank, of Greenlands and Irton Hall, Cumberland.

He is now the proud owner – not just of a  battered 2cv  racing car as pictured  here – but of the entire fleet of fire engines owned by the London fire brigade. When you next have a fire in Greater London this is the man who will responsible that the crew arrive in a properly maintained and equipped fire engine.

In the mad world of  privatisation  Sir Aubrey was able to snap the fleet and  get his hands on an income stream worth nearly £200m over the next ten years – for JUST £2.

You the  council taxpayers will be paying this man £1.5m a month to look after London’s fleet. He got this  at a knock down price because  the Greater London Authority foolishly under Ken Livingstone and even more foolishly under Boris Johnson and former London fire chairman, Brian Coleman, sold off  London’s fire engines and a 20 year lease on its own maintenance headquarters in Ruislip to a private firm.

The firm was sold on to AssetCo ( which I have written about extensively) whose  own chief executive, John Shannon, had to be dismissed, when he left it teetering on bankruptcy. The actual engines are at present owned by bankers, Lloyds TSB, one of the chief creditors of AssetCo London which had over £30m in debts and haven’t a penny to  replace the ailing fleet of engines from 2014. This has been admitted by Sue Budden, director of finance,of the London Fire and Emergency Planning Authority, . She told councillors at a meeting last week: “When they look ahead and look at the big vehicle replacement that is due to start in 2014, I think they can see they are not set up to cover that.” The full story by me is on the Exaro  news website at http://www.exaronews.com.

Step in Sir Aubrey who bought ailing  AssetCo for  £2 – without the fire authority or its staff- even knowing until the deal was signed. Such is the new world of privatised services – elected people aren’t even important enough  to know who owns them.

Now Sir Aubrey appears to be the scion of a very famous and powerful shipping family who owned two stately homes. One, Nunsmere Hall in Cheshire was built for his namesake, the third baronet, who went on to join the board of Cunard, and drew up plans for the original Queen Mary in the 1920s. The family have a steam locomotive on the narrow gauge Ravenglass and Eskdale railway named after them and in 1927 there was a swish saloon known as the Brocklebank.

The present Sir Aubrey  even graces the picture collection held by the National Portrait Gallery – with portraits of him and his first wife, Dr  Anna-Marie Dunnet, purchased by the gallery in 2004. He was also like the all the family, educated at Eton but too old at 60, to be a contemporary of London mayor Boris Johnson.

But a closer investigation reveals that  Sir Aubrey is not all he seems. Gone it appears are the two stately homes – both are now hotels. And Sir Aubrey  now remarried  with wife, Lady Hazel, is actually on the electoral register at a£162,500  three bedroomed semi in Stanwick, Wellingborough in Northants – in the constituency of Tory Mp, Peter Bone.

He doesn’t even own his house outright – he has a mortgage with the very democratic Nationwide building society.

It is at this address in July  that he set up a small private company A & AB Investments Ltd, which paid the princely sum of £2 for London’s fire engines. It is this company that is now the ultimate owner of London’s fire services. He has since set up another company Premier Fireserve, based at  the leased maintenance plant owned by the fire brigade.

Nor does he have any of the illustrious careers of his ancestors. Instead he is non executive chair of a series of venture capitalist funds, under the name Puma – who simply offer very good tax avoidance schemes – by investing in anything from hotels, property, antiquarian books – and then liquidating their investments after five years to secure maximum tax relief and returns for their investors. Hardly reassuring for such a permanent feature as providing a fire service which cannot be traded for tax  avoidance.

His only other passion is racing 2cv cars – with a  team known as Twin Snails. Indeed the elderly boy racer competed at Snetterton in Norfolk over the August bank holiday weekend in the British championships. His team have had mixed fortunes -doing better at Snetterton but coming a cropper at Brands Hatch -see http://www.flickr.com/photos/maisiehexagon/492921242/

Now you may think I am making  all this up. I tried to contact Sir Aubrey five times  to find out his side of the story. But he is shy and reclusive when it comes to the press – and he never returned my calls. I wonder why as I never bite.

But I think any reasonable person would think he is not the  first person you would want to run a public service and he hardly even has a particularly good business record. It is time he is held to account and I have great hopes that  Ex MP Andrew Dismore, the Labour assembly member for Camden and Barnet, will pursue him on our behalf by every means possible to find out the truth behind this, on the surface, very dodgy development.