A couple of new names have risen in the accountancy and insolvency practitioner firmament —Beavis Morgan and FRP Advisory. But appearances can be deceptive and the new businesses are, perhaps, not quite what they seem.
The Beavis Morgan name — given to the limited liability partnership (LLP) formed on 22 June 2010 as a vehicle to snap up parts of bankrupt mid-tier accountancy firm Vantis — reflects the origins of two of Vantis’s antecedent firms.
Beavis Walker was a seven-partner City of London-based accountancy practice acquired by Vantis for up to £5.1m in cash and shares in 2003. The Morgan part of the name is derived from Morgan Brown & Spofforth one of four accountancy practices that merged to form Vantis at the time of its May 2002 IPO.
The partners in the new vehicle, Beavis Morgan LLP, bear a striking resemblance to partners and board directors of the bust Vantis. They include Paul Jackson, Paul Ashton, Matthew Burge, Barrie Dunning and Nigel Haigh — who worked at Morgan Brown & Spofforth in its pre-Vantis days. Other partners in the recently launched vehicle include Richard Thacker and Peter Drown (both former partners at Beavis Walker). The other partner, Alan Ford, joined from another firm.
These guys will continue to pace the corridors of Vantis’s former head office at 82 St. John Street in Farringdon in the City of London whose freehold I believe they personally own. Meanwhile the state-owned banks Lloyds Banking Group and RBS and the taxpayer have been left bearing massive losses.
Pre-packs enabled bust accountancy firm Vantis to be reborn shorn of debt under new names
Once this and other pre-pack deals involving former Vantis entities — all handled by administrators at FTI Consulting, Chad Griffin and Simon Granger — are complete the two state-owned lenders can be expected to receive an estimated 20p in the pound, which means they will be nursing losses of some £40 million from their ill-starred decision to lend money to the accountancy firm. Her Majesty’s Revenue & Customs would be lucky to get 1p in the pound, meaning its losses will be about £5 million.
Sources assure me the culture that pervaded at Vantis — “inflated egos looking for any way to inflate the share price” — will carry through to the successor outfits. Other parts of the accountancy and business services group have been “phoenixed” into other vehicles in no less questionable ways. The 28 partners in its insolvency and corporate restructuring and business recovery unit have acquired that business for a reported £11m in another pre-pack, led by Jeremy French and Geoff Rowley. This too has been dishonestly dressed up and presented as if it was a “management buyout”.
The vehicle that acquired the insolvency side of the former AIM listed accountancy consolidator’s business was another limited liability partnership, FRP Advisory LLP, formed on 15 June 2010, whose website at the time of writing, is perhaps the least transparent (in terms of the new business’s origins and the identity of its partners) I’ve ever seen.
Intriguingly, the head of banking at FRP Advisory is Simon Glyn, the former Vantis partner who in 2003-04 was seconded to the role of “personal assistant” to Lynden Scourfield, the “rogue banker” at the centre of the £1 billion Bank of Scotland Reading scandal/fraud. The matter, in which Glyn/Vantis were involved in more ways than one, is currently being investigated by an enforcement team from the Financial Services Authority and other UK authorities including the Thames Valley Police.
Other parts of the former failed accountancy and business services group have been acquired by the accountancy firm RSM Tenon for a reported £7m. It will intriguing to see how long it will be before the Vantis guys revert to type.
- “Vantis sale months in the making“, Accountancy Age, 8 July 2010. A good overview and timeline of the pre-packs that enabled parts of the failed Aim-listed accountancy and business services group to be reborn, shorn of their debts, under new identities. What is most fishy here is how long these pre-packs were being planned before they were actually executed.
- “Lessons to be learnt from the demise of Vantis,” Citywire, 8 July 2010
This blog post was published on 16 July 2010
Matthew Burge is ex-Morgan Brown and Spofforth, but he was from a different generation than the big players in the whole affair. Only a couple of the people you mention are deserving of opprobrium. Others are honest men who have the misfortune to be the junior partners of the two or three people who drove the Vantis idea. Good accountants who couldn’t have stopped what happened if they had tried. There is no reason why they shouldn’t go on serving their clients as they always have.
Thanks OC – I have corrected Matthew Burge’s status. You say:-
I agree with the principle of this statement. However (a) Surely there must have been something they could have done? and (b) I’m afraid that some of the people involved with these phoenixed accountancy firms, such as Simon Glyn, do have “questionable” histories.
I have never met Simon Glyn, and I’m glad of that, but I do know something about the origins of Vantis. It was essentially Morgan, Brown & Spofforth with delusions of grandeur. Morgan, Brown & Spofforth was not a partnership of equals. It was controlled by just two or three people, maybe in substance by just one, and he/they were never going to change their spots. The only realistic thing that anyone who didn’t like their ways could do was to leave, which I did a long time ago, before it transmuted into Vantis. Most talented staff below partner level left after fairly short terms of service.
The architects of Vantis were wideboys from small firm backgrounds, who had never seen any other side of the “profession”, and simply had no conception of the likelihood that their approach would result in corporate death through reputational disaster if they reached above their natural level.
I don’t blame the partners outside the inner circle for staying, because most of them had been with the predecessor firms all their adult lives, and they would have had a great deal more difficulty than I did in extracting themselves. I expect that they were contractually tied up in knots.
So it continues. Two ex-Vantis insolvency practitioners, both now working at FRP Advisory alongside the notorious Glyn, have been accused of misconduct re: the administration of the high street fashion chain Miss Sixty
http://www.financialdirector.co.uk/accountancyage/news/2266992/miss-sixty-administrators
A High Court judge accused Nick O’Reilly and Peter Hollis of misconduct over the Miss Sixty CVA. Two landlord creditors of Miss Sixty wanted to call a halt to the CVA claiming it treated them unfairly. The judge has ruled against O’Reilly and Hollis, and in favour of the landlords. He said the two administrators “lost a proper sense of objectivity” and had sided with the Sixty Group against the interests of the guaranteed creditors such as landlords. The judge said there was a “prima facie case of misconduct” which should be considered by the professional bodies to which the pair of administrators are answerable. Mr Justice Henderson said: “This is, in my view, a CVA that should never have seen the light of day.” The ruling only further erodes any faith that anyone may have had in insolvency practitioners’ ability to self-regulate.
Thanks Gavin.
Interested to note that Carl Jackson head of recovery at RSM Tenon has just been fined and reprimanded for failing to collect £330,000 as liquidator of a failed company and instead hiding the funds, which were due to the liquidated company’s creditors in a bank account in Monaco. RSM Tenon is the listed accountancy group that acquired the bulk of Vantis PLC. Jackson was fined just £5,000, reprimanded and ordered to pay costs of £83,557 .
http://www.accountancyage.com/accountancyage/news/2267846/rsm-tenon-recovery-chief-fined
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I’m a little late in on this one — I worked for Morgan, Brown & Spofforth and then Vantis for over three years. I was totally taken aback by how the company was run (or should I say overseen) by the two at the top. It was run, as far as I could see, on greed and staff were spoken at and down to. I was involved in the flotation of the company on AIM and thought then it was again greed and overblown egos.
I am glad I escaped when I did.
We have been fighting in court with the notorious Geoff Rowlley at FRP Advisory for more than five years on the suspicious insolvency of the former Proteam UK Limited. We spent more than a million pounds in the solicitor fees and investigations costs, and revealed some serious misconduct and misfeasance. We are going to take further legal actions and if anyone wants to share more information or help, please contact us. We are determined to get these black sheep out.
My email is Weng@milicamp.com