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Vantis due to be removed as Stanford Int’l Bank receiver?

March 17th, 2010

Calls for Vantis, one of the UK’s dodgiest and most troubled accountancy firms, to be removed as receiver to the collapsed business empire of alleged fraudster Sir Allen Stanford (pictured above) are reaching a crescendo.

Aim-listed Vantis is nearly bust — it only survives thanks to the generosity of state-owned banks RBS and Lloyds Banking Group — and this is seen by creditors as prejudicing its ability to handle the complex receivership. Texas-born Allen Stanford is accused of defrauding clients through a $7bn Ponzi fraud centred around certificates of deposit issued by his Antiguan bank.

In submitting an affidavit last month, Alex Fundora highlighted the fact that Vantis’s 2009 accounts include a strongly worded “going concern” warning from Vantis auditors, Ernst & Young. Vantis’s financial difficulties stem partly from its own botched handling of the Stanford International Bank receivership, from which fees have taken longer than expected to materialize.

Fundora has asked the Eastern Caribbean Supreme Court of Antigua & Barbuda to remove Vantis as Stanford International Bank’s receiver, arguing the accountancy firm is out of its depth, incapable of handling such a complex situation and in danger of going bankrupt itself. PwC is said to be waiting in the wings in the hope of stepping in as SIB’s receiver should Vantis be relieved of its duties.

This brought back memories of Vantis’s role in the Bank of Scotland Reading scandal. Its partner Simon Glyn was, from November 2003 to November 2004, seconded to work as assistant to BoS Corporate’s former head of  mid-market high-risk, Lynden Scourfield. The chartered accountant seemed only too happy to do some of Scourfield’s dirty work for him.

Glyn became notorious for his treatment of innocent firms  which had the misfortune to have borrowed money from BoS Corporate — including the eco-nappy firm Cotton Bottoms. If attempts to seize equity stakes or expropriate assets in such businesses while they continued to trade failed, the bank and/or Glyn ensured they were tipped into administration.

Vantis was rewarded with contracts to serve as administrator for companies put out of business (most of which had been deliberately destabilized and/or bled dry by BoS’s favoured turnaround consultants Quayside Corporate Services). Their assets were then largely redistributed to companies controlled or associated either with BoS or Quayside’s owner, David Mills.

The whole sordid  episode, documented in my Banking’s Abu Ghraib post, is currently being investigated by the Financial Services Authority following a parliamentary debate on June 2nd, 2009 and the Serious Fraud Office is expected to intervene soon. As Private Eye recently put it:

“Vantis is an expert in advising banks to put a customer into administration and then cleaning up.”

Since the BoS Reading scandal, two other Vantis executives, David Perrin and Roy Faichney, have been charged with tax fraud over a scheme designed to permit wealthy clients to exploit charity tax relief rules. The accountancy firm has also had to re-state its accounts and its Canadian arm was removed as receiver for Stanford’s failed business empire after it sought to “bury” some of the evidence, a move that prompted this stinging verdict from a judge:

“Vantis does not deserve the trust of the court, as its own reprehensible conduct in no way offers any assurances for the future in this case.”

Nice people to do business with, then?

Furthermore, Vantis faces disciplinary action and a possible civil court case over the alleged misdeeds of its former partner Ronald Bassett Cross. Bassett Cross, 66, faces a number of accusations, including that he misappropriated client money, that he concocted a sweetheart deal to sell a friend a portfolio of properties belonging to the trust and that he lied to an ICAEW investigator.

As Private Eye states:

“Dealing with all this controversy has left Vantis in deep financial trouble. It recently reported losses of £11m [on turnover of £90m] and its auditors expressed “significant doubt on the company’s ability to continue as a going concern”.

“In other words, it would be bust — Britain’s only insolvent insolvency practitioner — if its banks had not rallied round (even though the accountants would probably have advised the bankers of any other similarly troubled business to pull the plug).”

As Private Eye suggested, it is kind of paradoxical that a distinctly dodgy accountancy firm is being propped up by the very public that it’s been fleecing for years!

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Posted by on Mar 17 2010. Filed under Blog. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

5 Comments for “Vantis due to be removed as Stanford Int’l Bank receiver?”

  1. […] To read about the imminent removal of Vantis as liquidators to Stanford International Bank, click here […]

  2. […] handled by PwC, KPMG, Menzies Corporate Restructuring (MCR), Hurst Morrison Thomson and Vantis, appear to have been designed to allow directors and associates of Quayside Corporate Services […]

  3. RNS just issued by Vantis:-

    Update on Stanford International Bank

    For immediate release
    10 June 2010
    Vantis plc (“Vantis” or the “Company”)

    Update on Stanford International Bank – in Liquidation (“SIB”)

    The Board of Vantis announces that on 8 June 2010 the High Court of Antigua (the
    “Court”) gave judgment on the position of Mr Nigel Hamilton-Smith and Mr Peter
    Wastell (the “Joint Liquidators”) as Joint Liquidators of SIB.

    The Court has determined that the Joint Liquidators should be removed from
    office and alternative liquidators appointed.

    The Joint Liquidators have been advised by their legal counsel that the basis of
    the decision, which has as yet only been given orally by the Judge, was
    incorrect and that it should be urgently appealed to the Eastern Caribbean Court
    of Appeal.

    The Company confirms that the Joint Liquidators will request a stay of the High
    Court decision pending their appeal to the Court of Appeal. Despite this
    decision, the Joint Liquidators remain focused on recovering the assets of SIB
    for the benefit of creditors.

    The Joint Liquidators have continued to make significant progress in their
    efforts to recover monies on behalf of the creditors and investors of SIB and,
    as recently as 7 June 2010, were recognised by the Swiss Financial Regulator as
    the officers to whom control of the SIB assets in Switzerland, totalling in
    excess of US$100 million, should pass. The ability of the Joint Liquidators to
    act in Switzerland is dependent on the final decision made by the High Court of
    Antigua.

    As announced on 3 June 2010, the Company continues discussions with both its
    debt providers and other parties as part of its ongoing plan to reduce the
    Company’s level of debt.

    A further announcement will be made as and when appropriate.

    For further information:
    +——————————–+————————–+
    | Vantis plc | +44 20 7417 0417 |
    +——————————–+————————–+
    | Paul Jackson, Chief Executive | |
    +——————————–+————————–+
    | Stephen Smith, Finance | |
    | Director | |
    +——————————–+————————–+
    | | |
    +——————————–+————————–+
    | Investec Investment Banking | +44 20 7597 5970 |
    +——————————–+————————–+
    | David Currie, Martin Smith | |
    +——————————–+————————–+
    | | |
    +——————————–+————————–+
    | Buchanan Communications | +44 20 7466 5000 |
    +——————————–+————————–+
    | Richard Darby, James Strong | |
    +——————————–+————————–+

  4. […] its balance sheet in the hope of reducing debt. It looks unlikely to ever be paid for work on the Allen Stanford liquidation from which an Antiguan court last week asked it to be removed as liquidator. Vantis director Nigel […]

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