Avocet bosses send $20 million to US for safety

by OUR BUSINESS STAFF

It was a breath taking day for shareholders in the 'disruptive technology' Avocet Group of companies with news of a 'high level investigation' into tax evasion, money laundering and Ponzi funding followed by the eleventh hour cancellation of an eagerly awaited general meeting for investors amid rumours of a planned demonstration.

There was also the revelation that Avocet chairman Martin Frost and his chemist colleague Dr Bob Jennings would remain in charge of flagship parent company Avocet Natural Capital until next February. This, despite the fact that Mr Frost has announced on several occasions since 2019 that he was stepping down.

The fast moving developments over the course of the day left a number of shareholders in a state of disbelief. For they were also informed that the first $20 million dollars from the $40 million dollar sale of Avocet's "jet fuel from air" patents has had to be moved to a bank in the USA for security reasons.

Mr Frost himself was the messenger - some might say the harbinger - of all these factors as he circulated two different newsletters in the space of a few hours.

In his first missive he declared: "At 11am on Monday 27th September 2021, I was formally advised that HMG [presumably Her Majesty's Government] was to conduct a high-level investigation into a series of opportune --- thefts.

"Omega Infinite Plc, its sources of funding, and its interactions with the legal professions. A major problem area is Omega’s loss of some £15 to £19 million in support of (named individual) grandeur."

After naming a host of individuals and firms said to be targets for the investigation, Mr Frost wrote: "It is understood that the complaints which have prompted this domino of enquires have come from other members of the --- family (who are fed-up with ----- deceit); the Law Society of Scotland; English based insolvency practitioners; and Scotland’s Crown Office.

He indicated the inquiry would encompass "crooked lawyers, dishonest SNP politicians, and involves false accounting & theft by (named individual), false deeds & affidavits perfected by Edinburgh lawyers, perceived falsehoods, theft & money laundering by (a named company), bad & unlawful practice by  accountancy & insolvency firms."

According to the Avocet boss directors of Omega Infinite, currently in compulsory liquidation with its creditors seeking millions of pounds, "are asked to provide information to HMRC, on tax evasion, money laundering, and Ponzi funding".

Over the course of this week we had been told that a significant number of shareholders who were seeking to access tonight's planned video link meeting which was to have had Mr Frost and Dr Jennings in attendance did not receive responses to their applications.

There had also been allegations that the calling of the meeting by ANC's directors and the proposal to approve an interim dividend were unconstitutional and any decisions taken without a proper vote could be challenged.

But some four hours before the Avocet members were due to log in Mr Frost announced the meeting had been cancelled with a replacement AGM scheduled for February 2022.

In a second newsletter sent out at around 5pm Mr Frost wrote: "I have to say that I was disappointed today to receive abusive messages & threats concerning this evening’s planned General Meeting. Rightly or wrongly, I am advised that some -----  have planned an outrageous video demonstration and have encouraged members of the Press to impersonate ANC Plc shareholders.

"Personally, I am unsure as to how they think that they can take over a video conference. Other folks are legitimately unhappy about a video conference and their inability to speak or Fili-bust. Consequently, they demanded that this evenings General Meeting is cancelled with a physical February 2021 (surely should be 2022?) replacing such. Listening to all, Bob and I have thus decided to adhere to these wishes – we shall continue in office until February and in the meantime make good on creditor payments and the proposed interim dividend.

"Tonight’s video General Meeting is thus cancelled – next February it is obvious that the AGM will need to be policed to ensure that all can safely attend".

This document also included details of the so-called interim dividend from the intellectual property sale although a significant portion of the first allocation to be released - Mr Frost gave the figure of $10 million - seems destined to pay debt and bankroll the many writs he has been threatening to serve on an array of people for more than a year.

According to the second letter: "As many are aware, ANC Plc along with its subsidiary Avocet IP Limited was in protracted discussions to sell some of the original concepts, copyrights, patents, trademarks, and trade secrets that ANC Plc holds in relation to the manufacture of jet fuel from air. 

"Note: most of this IP was not written upon in the Coller IP December 2018 valuations nor was visible in the 2016 & 2017 intellectual property switches from our US companies to our UK companies. The price obtained for this IP is $40 million US dollars which is paid in two tranches of $20 million. 

"One tranche of $20 million which is received and a further $20 million to be held on escrow in the US until January 2022 end – this second tranche as with the first is subject to anonymity undertakings. No more shall be said of the front buyer who is Middle Eastern."

But because ANC Plc had so many 'headbangers' confronting it, security measures had prompted  the firm's money to be placed "in US corporate protection". 

Mr Frost added: " Dr. Bob Jennings and I, the directors of ANC Plc and Avocet IP Limited, have decided to use $10 million from the first $20 million tranche to pay ANC Plc & some Omega creditors and provide a fighting fund to secure justice against the incompetence and perceived dishonesty of insolvency practitioners".

The rest of the cash is to be used for that long awaited interim dividend. For the avoidance of doubt here is Mr Frost's description of the offer in full:

"The remaining $10 million balance will be paid out to some 30 million one-pound shareholders (over 30 US cents per ordinary share). Payment of this $10 million from the US will occur during the next four weeks after two small hurdles – the first being clearance of the US withholding tax, and the second confirmation that the recipient is a legitimate ANC Plc shareholder entitled to receive this dividend. Subject to 2022 February AGM, ANC Plc’s shareholders will be asked to vote on a final dividend from this transaction which after taxes should amount to a further $15 million or 45 US cents per ordinary share, payable in February 2022. At the February AGM, ANC shareholders will be given alternatives as to the possible sale of the remainder of ANC Plc’s intellectual property (conceptually valued at more than £25 million).

A shareholder who contacted us tonight commented: "Frost seems to have forgotten that in the last sale of the "air-to-fuel" IP, he claimed that he, Jennings and Short were entitled to the first $30M. From the May 31st newsletter: 'Dr. Glyn Short & family is due to receive some £8 million from these transactions. Dr. ‘Bob’ Jennings & family is due to receive some £9 million from these transactions. Martin Frost & family is due to receive some £13 million from these transactions ' What happened to that?"

Claims Avocet meeting is 'illegal' dismissed by chairman

by OUR BUSINESS UNIT

Suggestions that this week's planned late night meeting by video link of vetted Avocet Natural Capital shareholders is unconstitutional and should be cancelled have been swept aside today by Group chairman Martin Frost.

On September 23rd Mr Frost issued a notice to Avocet's long suffering stakeholders that the first company meeting in two years would take place this Thursday at 9.15 pm in order to accommodate 'mystery' investors called PCH based in the USA. It has been claimed by dissenting voices that PCH Holdings and their UK representative Tim Carter simply do not exist.

Mr Frost also circulated an agenda for the September 30th meeting. He said shareholders will be asked to vote on the election of Directors; the appointment of Auditors; the drafting of accounts; the issuance of a Dividend; review of the Directors Report; and review of proposed litigation. 

Then recipients of Mr Frost's email were told: "Any legitimate ANC Plc shareholder who wishes to attend and / or vote at this video G M will need to email [Avocet director] Dr. Bob Jennings on Tuesday 28th September 2021 between 9 am & 4 pm UK time.

"Video links together with voting slips shall be issued by 12 pm UK time on Wednesday 29th September. Draft ANC Plc accounts will be issued to all ANC Plc shareholders on Wednesday 29th September. The Directors Report will be issued to all ANC Plc shareholders on Wednesday 29th September. Details of the proposed dividend will be issued to all ANC Plc shareholders on Wednesday 29th September. Review of proposed litigation will be issued to all ANC Plc shareholders on Wednesday 29th September."

But this set of proposals was attacked over the weekend in contributions posted on the independent Avocet Shareholders' Forum which poses the question 'Where has your money gone?'

One writer claimed: "This Notice is seriously deficient in three critical ways:

"1- Section 33.1 of the Articles of Association states, “An annual general meeting shall be called by at least 21 Clear Days’ notice.” “Clear Day” means that the day on which the event takes place as well as the day on which notice is received are to be excluded.

"Frost has given the shareholders only six Clear Days’ formal notice in direct violation of the Articles.

"2- Under “General Meetings", Section 33.3 of the Articles states, in part, “…the notice shall be given to all Members ….and to the Directors and Auditors, and there shall appear with reasonable prominence in each such a notice a statement that a Member entitled to attend and vote is entitled to appoint a proxy or proxies to attend and on a pool, vote instead of him and that a proxy need not be a Member.”

"Frost’s September 23rd, 2021 Notice does not contain this mandatory and important statement, in clear violation of the Articles.

"3- Section 42.1 of the Articles states, “Any notice of a general meeting must specify the address or addresses (proxy notification address) at which the Company or its agents will receive Proxy Notices relating to that meeting or any adjournment of it.

"I call on Frost to correct these serious deficiencies. If he insists on proceeding as planned, if subsequently challenged, there is a high risk that because of these serious deficiencies the meeting will be declared improperly constituted, and any votes taken at the meeting declared invalid."

However, in a hard hitting response issued today, Mr Frost declares: "Despite rumors and moves to the contrary. Be advised that as planned ANC’s Thursday’s video General Meeting is proceeding.

"Legitimate ANC shareholders can discuss the interim ANC dividend which ANC Plc directors have mandated. you have the right to attend this Thursday and express your views. A representative of PCH, whose colleagues have secured much information will be attending this meeting."

A success born out of failure

by BUSINESS STAFF

As administrators of the doomed Dawson International Group of textile and knitwear businesses continue the process of winding up and dissolving the failed giant, a survivor of the mayhem which engulfed a vital Borders industry a decade ago continues to prosper.

Back in 2012 at the time of Dawson's spectacular collapse strong fears were being voiced over the possible fate of Hawick based Barrie Knitwear and its workforce of 176 which had been producing top of the range cashmere garments for iconic French fashion house Chanel.

But it was Chanel themselves who saved the day by purchasing Barrie - founded in 1903 - in a £4.8 million deal with the Dawson administrators. The price, which was not disclosed at the time, looks to have been a real bargain given subsequent events.

Today Barrie continues to manufacture premium cashmere goods for the world's leading fashion brands with 266 on the payroll, consistent profits and a healthy order book.

However, the latest set of accounts show Barrie has not escaped the ravages of Covid-19, and there are concerns over the fall-out from Brexit.

The figures for 2020 show turnover at £16.298 million (down £2.449 million or 13 per cent on the 2019 total of £18.747 million. As a result last year's operating profit of £604,000 was considerably less than the £1.178 million recorded the previous year.

The company's report says turnover fell due to lower demand following the Covid outbreak. There was a five week halt to production which impacted manufacturing efficiency.

"The company welcomed the announcement of a trade deal between the UK and the European Union meaning there are generally no tariffs on goods traded between territories", adds the report. "Nevertheless, there remains a risk to the business from additional bureaucracy for the company and its customers seeking to move goods across borders. The economic implications resulting from the impact of Brexit are largely beyond the control of the company".

In a section covering the effect of Covid, Barrie's directors explain: "Following a strong start to 2020 the pandemic had a significant impact on the business, resulting in the temporary closure of production facilities and boutiques of our customers worldwide. There has been no use of government support schemes such as 'furlough'.

"The full financial impact of the health crisis is impossible to predict with a high degree of certainty. Our production facilities and boutiques are open and operating in accordance with local government guidelines. Furthermore, we have seen a good increase in orders from customers since summer 2020 and for 2021 are forecasting a return to similar levels of turnover and profitability experienced prior to the pandemic.

"The company continues to have a strong balance sheet and benefits from the support of its parent Chanel Ltd."

Barrie, with production centres in Hawick and Arbroath, reported an annual wage bill of £7.3 million for 2020. The sole survivor from the Dawson wreckage continues to flourish.

Meanwhile administrators of Dawson companies which once employed 12,000 people and whose presence was inextricably linked to the economic wellbeing of the the Scottish Borders, have produced their latest 'progress reports' on the administration procedure with the end of the saga apparently in sight.

Dawson's core business was also in cashmere which expanded significantly in the 1960s. A programme of diversification in the '70s and '80s fuelled growth in the UK and in the USA and saw annual turnover reach £400 million.

But problems flowed from the acquisition of businesses in the US, sharply reversing the fortunes of the textile giant, according to insolvency experts.

A report produced shortly after the administration began includes the following: "In 1986 a shower curtain manufacturing business was acquired and in 1989 an apparel business was purchased. These businesses were disposed of at significant loss in 1994.

"Compounding this problem, the textile industry, and in particular the cashmere industry developed in China and eroded the margins the (Dawson) group was able to generate in its businesses. Over the period 1999 to 2011 most of the group's businesses, including Todd & Duncan, Pringle and Ballantyne were sold to repay debt".

By 2012 the group comprised a UK knitwear business, Dawson International Trading Ltd., and a US sourcing business, Dawson Forte which brought Chinese-made cashmere goods into the States for local retailers.

But as the administrators make clear, the major issue for insolvency was the UK pension scheme liabilities and associated costs. In the years leading up to 2012 the combined deficit was fluctuating between £5 million and £30 million annually. It had reached £129 million when the administrators moved in.

Documents show the pension scheme actuary served contribution notices for the £129 million - the full buy-out deficit of the UK schemes - on the company.

"The directors concluded there was no alternative to appointing administrators for both companies". By now Barrie Knitwear was the only operational part of Dawson's once vast UK textile and cashmere operation. 

Avocet's 'jetty' company in hands of administrators

by EWAN LAMB

Avocet Faculties Ltd., the company which paid £200,000 for a dilapidated Loch Lomond jetty five years after the pier changed hands for just £1,000, is now in the hands of administrators from the  insolvency practice which is liquidating another business from the 'disruptive technology' Avocet group.

The jetty and a narrow strip of land at Port A Chaipuill, Arrochar has been used as security for a loan the £1 company had arranged with Avocet Infinite PLC (now called Omega Infinite and in compulsory liquidation).

A separate financial arrangement between the two firms entitles Omega to all of Faculties' properties and intellectual property including patents.

When shareholders discovered details of the £200,000 jetty purchase, which took place in October 2017, there was strong criticism of Faculties' management - current director Dr Bob Jennings, and his colleague Martin Frost who resigned from the Board in September 2020 at the time of Dr Jennings' appointment.

        

    The pier at Port A Chaipuill, Loch Lomond, bought in 2017 for £200,000

The files of Scotland's Land Information Service [LIS], a government agency, gives values for previous transactions involving the Loch Lomond jetty. It was bought for £2,000 in April 2008 before being acquired by a new owner for £1,000 in October 2012.

Documents posted on the Companies House website shows the appointment of joint administrators to Faculties by the Business and Property Courts in Leeds on September 14th. The insolvency practitioners are Kris Wigfield, from Begbies Traynor, Sheffield, and Jason Ainge from the company's Leeds office. Begbies are liquidators of Omega Infinite.

The company records also show that ownership of Avocet Faculties has changed hands several times since its formation when it was called Avocet Infinite Properties. According to the latest confirmation statement in August 2021 the single share was in the hands of Avocet Bio Solutions Ltd., which has an address in Lapp's Quay, Cork.

Avocet Faculties' last published accounts (for 2019) show total fixed assets of £815,823 including investment property said to be worth £565,823. The amount owed to Omega Infinite is given as £807,563.

In July of this year an Employment Tribunal judge ordered Avocet Faculties to pay a total of £9,588.80 to former office administrator Sarah Shotton who successfully claimed for unauthorised deduction of wages, for a breach of her contract of employment, and for unfair dismissal.

The tribunal has yet to fix the amount of compensation Ms Shotton is entitled to for unfair dismissal.

Earlier this week, in a newsletter to Avocet investors, Group chairman Mr Frost referred to "the current attempt by Begbies to bankrupt Dr Bob Jennings for £1.25 million because [a] Bob helped develop the Avocet concept, and [b] Bob gave to Avocet much of Avocet's patent strength".

In addition, Mr Frost stated: "The dirty behind the scenes attempts by solicitors acting for Begbies and Emma Porter (administrator of insolvent Avocet subsidiary Orrdone Farms Ltd) to steal the IP [intellectual property] money which Avocet IP Ltd. (another subsidiary) is shortly to receive.

"These lawyers, without due enquiry, poo-poo Avocet Infinite PLC's February 2019 Declaration of Solvency and the resultant demerger of Avocet Natural Capital and Bio Solutions".

 

£13.3 million claim dismissed as 'fantastical'

SPECIAL REPORT by BUSINESS STAFF

Avocet Group chairman Martin Frost, now awaiting the outcome of a bankruptcy court action, has circulated documents outlining a counter claim for more than £13 million in which he blames the  creditor and an administrator of one of his insolvent companies for loss and damage of valuable articles and property.

But Mr Frost's summons against United Kingdom Agricultural Lending Ltd (UKALL), and administrator Emma Porter, which was not accepted by Scotland's Court of Session received short shrift from UKALL's barrister when it became an issue for debate during last week's bankruptcy hearing at Leeds Business and Property Court.

Jonathan Rodger, counsel for UKALL who are pursuing Mr Frost and his wife for a £4 million loan debt, told the court: "Across the board Mr Frost's allegations are fantastical. There is an allegation that an officer of the Court colluded with the petitioner to steal £13.3 million worth of items including a Titanic Certificate of Sea Worthiness said to be worth £13,000.

"These are preposterous allegations. Mr Frost's evidence is hard to follow, it includes extraordinary allegations and is designed to confuse and to obfuscate, to raise a cloud of dust to create an air of substance when there is nothing there. He makes spurious allegations of fraud and forgery against officers of the Court".

But only a few days after proceedings at Leeds were concluded Mr Frost sent shareholders of Avocet Natural Capital full details of his cross claim. 

According to Mr Frost: "Legal actions...are to be brought against many parties. Enclosed is a draft Scottish Debt Summons I wished to bring against UK Agricultural Lending Limited and Ms. Emma Porter. As noted above, jurisdiction for this was refused by the Scottish Courts – happily in exchange for a £10k fee, and a purchase note of assignment, the English courts are pleased to process.

"On Saturday 18th September, Martin and Janet Frost under conditions, jointly sold their entitlements under this Summons to a third party. Same third party has translated the Scottish Summons into English High Court Writs against UKALL & Porter along with officers of Begbies Traynor [liquidators of another Avocet Group company, Omega Infinite]".

In a decision issued in December 2006 it was revealed that " the Lords of Council and Session, upon a petition by the Lord Advocate, have, in terms of section 1 of the Vexatious Actions (Scotland) Act 1898, ordered that no legal proceedings shall be instituted by Martin Frost, residing at ---- in the Court of Session, Sheriff Court or any other inferior Court unless he first obtains leave of a Judge sitting in the Outer House of the Court of Session, having satisfied such a Judge that such legal proceedings are not vexatious and that there is a prima facie ground for such proceedings" That vexatious litigant order on Mr Frost remains in place.

According to Mr Frost's summons: “The photographs (accompanying the claim) illustrate the way in which the second Defender [Ms Porter] in the best tradition of Robert Mugabe invaded the Pursuer’s properties, then brutally arranged for the dumping, burning and theft of the Pursuers goods. As is narrated below, the second Defender was ‘uncivilized’ in her disposal of Frost contents prompting losses of more than £10 million pounds.”

"And Begbies with the assistance of the second Defender subsequently moved over 500 items from Harcarse [a property formerly occupied by Mr Frost] to Begbies warehouse in Scunthorpe. List B in the Productions, prepared by Begbies, displays many of the above Frost mentioned items e.g., the Hingley Anchor Proving Certificate, some of Lutyens drawings for the ironwork on the Viceroy’s House, New Delhi etc. etc. – all missed on the second Defender’s valuation. Items missing include Titanic memorabilia: The Sea worthiness certificate of the Titanic; Various Titanic photographs, mainly of the manufacture of Titanic parts at Hingley’s and in Belfast. A Titanic crockery set inlaid with the White Star line (presented to Hingley’s directors’ wives at the Titanic launch)."

To back his claims Mr Frost adds: "Between December 2015 and December 2020 various prominent persons stayed at Harcarse Hill farmhouse who saw all or part of the above-mentioned items. Such persons include Dr. Farooque Dawood (whose family owns some 40% of Pakistan’s private economy); the Hon. James Willoughby barrister & landowner; Fieldfisher solicitors Mr. Kit Jarvis & Mr. Tim Bird; Dr. Glyn Short; Professor Geoff. Randall; etc, etc."

Avocet Natural Capital (ANC) investors are told that over the last few days there have been intense meetings "to stop inspired bad & complex attempts by the lawyers acting for Emma Porter and Ashleigh Fletcher [Omega Infinite joint liquidator] to prevent your ANC dividend receipts. Happily, all apart from a possible US withholding tax query are overcome."

Mr Frost goes on to say that the Frost family is donating one million pounds to the crowdfunding entity being setup by his colleague Dr. Bob Jennings (a fellow director of Avocet entities).

Furthermore: "The Frost family is donating a further one million pounds to promote a commercial enterprise to offer third party finance which overcomes the difficulty a claimant might have in bearing the often-high costs of litigation. Further publications shall explain.

"The Frost family is donating ten million pounds to an Irish institution to seed corn finance the Avocet ‘hydroponics’ & ‘heathy [sic] beef’ concepts."

The many millions of pounds needed to finance the proposed measures will be raised, says Mr Frost, by the sale of the ‘Mayo Pot’.

"By arrangement, on Thursday 23rd September 2021 the ‘pot’ will be lodged with a Leeds solicitor. Subject to internal agreement, the Frosts have mandated its sale subject to an export license. Note: an Irish ancestor of my mother, Lord Mayo, basically stole it from a mate who had physically sacked China’s Imperial Palace during the Second Opium War.

"Some years ago, Sotheby’s valued the ‘pot’ at over £30 million – two similar pots have recently gone to Chinese collectors for over £40 million. In 2018 & 2019 the family discussed the ‘Mayo pot’ sale with accountants Ryecrofts, of Newcastle, who thought the wisest thing for the Frost family to do was to tax efficiently sell the ‘pot’. Bottom line if sold tomorrow one should expect net of tax and fees some £20 to £30 million depending on who turns up to the auction."

Bankruptcy hearing sets October 11th 'deadline'

EXCLUSIVE by COURT REPORTING STAFF

A judge hearing a bankruptcy petition against self-styled controversial businessman Martin Frost and his wife has given the couple until October 11th to produce evidence they can pay off a £4 million debt, said to be owed to a farm mortgage company, "within a reasonable time".

The two-day 'remote' hearing at Leeds Business and Property Court last week heard detailed submissions from legal counsel representing the Frosts and the petitioners, United Kingdom Agricultural Lending Ltd. (UKALL)

A 'last minute' cross claim from Mr and Mrs Frost seeking £13.3 million from the petitioners and from Emma Porter, administrator of one of Mr Frost's insolvent companies for damage and loss has not been accepted by Scotland's Court of Session, the hearing was told.

Judge Joanna Geddes had before her a thick bundle of documents linked to the case including four separate witness statements from Mr Frost. At the conclusion of proceedings the judge said she would hand down her judgment on October 18th.

Barrister Jonathan Rodger, for UKALL, told the hearing: "There are patterns of evasion in Mr Frost’s behaviour, and the late submission of this cross claim is part of that. Another spanner has been thrown into the works”.

Guy Olliff-Cooper, counsel for the respondents (the Frosts), made a number of submissions in an attempt to have the bankruptcy petition rejected.

On day one Mr Olliff-Cooper claimed  the creditor had not made enough of an effort to serve the statutory demand for payment on the Frosts. Several letters addressed to 25 Palace Street, Berwick [registered address for a number of Mr Frost's companies], were returned unopened by company secretary Eirlys Lloyd as the Frosts did not receive mail there and were not resident at that address. 

Then, said the lawyer, when the process server visited the couple's home in a Scarborough apartment block with demand documents these were posted through the communal letter box at the front of the building rather than via a side door leading to Mr Frost’s flat. They ended up 'in the bin'.

But in countering that argument, Mr Rodger said it was obvious why the server had gone to the service address of the debtor (25 Palace Street) and to the residential address at Belvedere, Scarborough. The purpose of these visits was to render personal service but that had not proved practicable as the Frosts were not there. 

He added: "After the door (in Berwick) was closed in the server's face the letter was posted through the letter box. The demand remained at Palace Street for some considerable time before Ms Lloyd posted it back to the server. This was a schoolboy attempt to evade service".

The second day of the hearing saw Mr Olliff-Cooper argue that there was no liability on the Frosts as the guarantees they signed when the original £3.25 million loan was made by UKALL were not enforceable. Until someone stated they would be bound by the terms of the guarantee the document was not a deed and was therefore not valid, according to the Frosts' counsel.

In response, Mr Rodger remarked “a desperate debtor raises facetious claims”. He told the judge: “You must consider the credibility of Mr and Mrs Frost’s defence...is it credible or a put up job?”

Although Mr Frost now denied there was any debt, Mr Rodger said that previously he seemed to accept responsibility for it in a series of emails dating from March 2020.

Quoting directly from the emails, Mr Rodger said Mr Frost had first written: “We shall reply with substantial proposals”. The following day he indicated “We are thinking of making an offer”, then a follow up email signed by Mr Frost and his wife suggested a payment of £2 million. And in an email written to his lawyer Mr Frost said: “My wife and I can manage £4 million.”

Said Mr Rodger: “That is a funny thing given that Mr Frost claims in this case there is no debt”. There had not been a ‘sniff of dispute’ in any of that earlier correspondence.

In a further submission Mr Olliffe-Cooper claimed this was a rare case in which the recovery of a debt was not the principal part of UKALL’s purpose. Bankruptcy would not be in the best interest of the creditors, he claimed. UKALL did not want to get back its money solely by pursuing the guarantors of the loan. If that had been the case UKALL would have pursued all of the guarantors of which there were six in total.

"There is another reason for pursuing my clients", said Mr Olliff-Cooper. "The real reason for this bankruptcy petition is to prevent Mr Frost from bringing the action (for £13.3 million) against UKALL".

Mr Rodger dismissed that submission as fantastical conjecture by Mr Frost.

Then in a forceful putdown of the cross claim, Mr Rodger declared: "“The fact that this document is produced on Wednesday of this week tells you all you need to know. The contents of this document are the ravings of a lunatic”.

Mr Rodger told Judge Geddes: "“The fact is the petitioner is pursuing the low-hanging fruit. Mr Frost’s evidence is that he is of good standing; he is a multi-millionaire. It is incorrect to say this is the only action the creditor has taken. Not only has it pursued the Frosts, it has put the principal borrower [Orrdone Farms] into administration, and Harcarse Hill farm [a property in Berwickshire] has been sold. And there is no evidence Mr Frost has had £13.3 million of property stolen or destroyed”.

After Judge Geddes suggested October 18th as the date for her judgment, Mr Olliff-Cooper indicated that Mr Frost's financial situation could change markedly before then; his client could get £20 million paid into his bank account,

But Mr Rodger said there was no evidence to show that Mr and Mrs Frost could pay the outstanding debt.

Judge Geddes ordered that the Frosts must provide their evidence of ability to pay by October 11th.

No approach to Kwarteng for mystery investors' anonymity

BY OUR BUSINESS STAFF

UK Business Secretary Kwasi Kwarteng was not asked to afford anonymity to the mystery investors said to be willing to plough tens of millions of pounds into controversial businessman Martin Frost's array of companies, a lengthy investigation by Not Just Sheep & Rugby has discovered.

Shareholders in Avocet Natural Capital PLC and Genfro Ltd., both involved in the 'disruptive technology' sector, were told by Mr Frost that the secretive outfit he named as PCH Holdings and their UK representative Tim Carter wanted to protect their business activities from public view.

The initial reference to Mr Kwarteng's alleged involvement in a cover up to benefit PCH was made in a 'newsletter' from ANC chairman Mr Frost on July 29th after posts appeared on the Avocet Shareholders' Forum to the effect that PCH and Carter were both fictional. There is no contact address for PCH and the 'group' does not merit a mention anywhere on the internet, according to critics and doubters.

Mr Frost declared in his message: "The ‘mystery investors’ are known to some of Genfro’s prominent shareholders, its lawyers, but most importantly The Secretary of State for Industry Mr Kwasi Kwarteng who was approached to secure anonymity."

As we reported at the time, just two days later Mr Frost released the text of a letter supposed to have been sent by 'Tim Carter' to Sarah Munby, Permanent Secretary at Mr Kwarteng's Department for  Business, Energy & Industrial Strategy (BEIS) with the anonymity request for PCH.

The letter to Ms Munby stated: "Over the last three years, PCH has acted as a guardian angel to controversial Anglo-Irish businessman Martin Frost who promoted Avocet Natural Capital Plc.

"To keep ANC Plc alive & protect its valuable intellectual property PCH is responsible for: Over £2 million pounds of gift life support funding; Liaison with colleagues who control the ownership of the Israeli Leviathan and Tamar gas fields which prompted a $100,000 US dollar offer to ANC’s subsidiary Avocet IP Limited for its old AFS jet fuel from air patents. Due to ANC Plc stupidity, this transaction failed though a reduced-price deal of $30 to $40 million is in the offering."

'Carter' goes on to claim that because of "SNP [Scottish National Party] inspired badness" PCH decided it was wasting resources attempting to support a company focused out of Scotland. PCH thus encouraged Martin Frost and his colleague Dr. Bob Jennings to set up a completely new entity, Genfro Limited. 

"For strange reasons of sentiment Frost & Jennings then gave away options for chosen others to obtain Genfro equity at humongous discounts. These gifts and their domino consequence have angered PCH. PCH would like Genfro Limited to be owned by people of like minds to PCH."

Ms Munby was also told: "Presentably, PCH has funded four provisional patents of which one for a non-explosive methanol additive to allow green methanol to become a clean replacement diesel is the most valuable. PCH is about to fund a further 30 more fuel and agricultural patents which should result in Genfro Limited becoming a £200 million IP company.

And according to 'Carter': "Down to ongoing perceived dishonesty infusing Scottish politics along with unjustified and apparently racially motivated SNP hate campaigns, PCH wishes to keep out of the limelight.

"Our understanding is that under UK company law PCH & colleagues can retain anonymity providing we keep our respective overseas shareholdings below the 25% threshold. Please confirm promptly if our understanding is correct: if not I regret PCH will not invest in the UK." 

We asked BEIS to tell us whether the Secretary of State had made an order to secure PCH's anonymity. Our initial request for information was directed at the Department's press office, but we were then redirected to the general Enquiry Unit.

Finally, this week the following response was received from BEIS: "Thank you for your emails dated 30 July onwards, to the Enquiry Unit, about matters surrounding investors in Genfro Limited. I have been asked to reply and apologise for the delay in doing so, it has taken time to undertake the comprehensive search of our records required to accurately respond to your enquiry. 

"You asked whether the Secretary of State had been approached with a view to securing anonymity for certain investors in the company and, if so, whether such anonymity had been granted. We have searched our records and can confirm that no approach in such terms has been received by the Secretary of State."

The disclosure prompted a strong reaction from a shareholder in the Avocet companies who told  us: "While many have long suspected that Frost has continuously misled investors, it is still very shocking for me to see absolute proof of it!

"This means, of course, that the 'mystery investors' do not exist, so the promise of a premium-priced share offer, massive investment, and their eventual purchase of all of Avocet’s IP [intellectual property], is simply all hokum. Misleading the shareholders of a public company is a serious, and could possibly be a criminal, matter."

And the irate shareholder added: "It is now abundantly clear that the shareholder letters Frost sent out in July concerning the request for anonymity were pure works of fiction”.

Borders council to take possession of swanky country house

SPECIAL REPORT by EWAN LAMB

A sumptuous collection of rare pottery and books, paintings and furniture assembled over many decades by two eminent Scottish families will be sold at auction next month before Scottish Borders Council takes possession of an up-market country house in the final phase of a £10 million taxpayer-funded property deal.

According to a report to be considered by councillors the local authority will gain access to Lowood House, complete with wine cellar, swimming pool and servants' quarters in April 2022.

The former home of the Hamilton family dates from 1830, and has been part of the Lowood Estate, near Melrose, which is now entirely in public ownership. But plans to develop the surrounding land for housing and other infrastructure projects has slipped behind schedule. There has been little or no activity at Lowood since the controversial acquisition by SBC in late 2018.

One condition of the purchase from Cayman Islands based Lowood Trust was that Alexander Hamilton and his wife Erica, who divided their time between the Borders and Jamaica, could continue to live at Lowood. But following Mr Hamilton's death last year the family has decided to leave Lowood after residing there since 1947.

A confidential valuation report prepared prior to the council deal contains details of the attractive property by the banks of the River Tweed. This extract outlines the accommodation:

"Ground Floor – Vestibule, entrance hall, drawing room, dining room, conservatory, library, study, kitchen, utility room, old kitchen, 3 pantries, cloakroom with toilet and a further toilet. Wine cellar. First Floor – Landing, 4 bedrooms (1 en-suite) and family bathroom. Housekeeper’s Flat – Lounge, 3 bedrooms, kitchen and bathroom.

"Traditional stables are within the partially developed stable block to the west of Lowood House. These are of stone and slate construction and house 12 traditional loose boxes with part cobble, part concrete floors. Garage/workshop".

The surveyor's 'desk-top' report, compiled without an inspection of the house's interior, includes the following passage: "Internally, the property is well presented but is in need of modernisation and upgrading. The majority of the ground floor is well maintained with the exception of the old kitchen which is largely unused save mainly for storage. The first floor accommodation is well presented too with the exception of a bedroom to the south east which was in the process of being upgraded. Double glazing would be beneficial and the property may need rewiring."

Based on that assessment it appears a considerable sum will be required before the house is ready for alternative use.

The website of auctioneers Lyon & Turnbull contains details of the Lowood contents sale to be conducted online on October 6th together with a detailed history of Lowood and its occupants.

The eclectic country house collection it contains was amassed by two Scottish lowland families: the Crum Ewings and the Hamiltons.

"The Crum Ewing’s fortunes were founded by James Ewing (1775-1853), who was Lord Provost and MP for Glasgow in the early 19th century. He lived in a house where Queen Street station now stands in Glasgow city centre and later bought Strathleven House and estate in Dunbartonshire, which he set about enlarging and improving.

"Having no children, the house was inherited by his relations the Crum Ewings and latterly Constance Crum Ewing (1899-1982) and her husband Ian Bogle Monteith Hamilton (1890-1971) until it was compulsorily purchased by the Board of Trade in 1947, at which point the couple bought and moved to Lowood House."

The Lyon & Turnbull publicity material adds: "Following the death of Ian and Constance’s son Alexander Hamilton (1932-2020), the family are now leaving Lowood and feel it is time to pass on the majority of the contents to new owners, with the hope that they will be enjoyed and appreciated as much as they have been by the family over the generations.

"THE HIGHLIGHTS - The sale will include everything you might expect from a country house contents, from pictures, furniture and works of art to silver and a library of books. Many of the older paintings at Lowood came from the collection of James Ewing, who was collecting enthusiastically in the early-to-mid 19th century, both before and around the time that he and his wife undertook a thirteen-month Grand Tour of Europe beginning in 1844. These and many of the other older pieces in the sale will have come to Lowood from Strathleven."

The online catalogue suggests the 'star of the sale' will almost certainly be: "AN UNRECORDED ITALIAN [URBINO] ISTORIATA MAIOLICA DISH, ATTRIBUTED TO NICOLA DA URBINO, CIRCA 1520-23 “SAMSON AND DELILAH”. Estimate: £80,000-£120,000.

Other items likely to attract interest include PTARMIGAN IN THE SNOW, by Archibald Thorburn, Signed and dated 1910, watercolour Estimate - £30,000 - £50,000; A pair of Monumental Cantonese floor vases - £6,000-£8,000; Chinese black lacquer twelve panel screen - £5,000-£7,000

CIRCLE OF FRANCESCO TIRONI - ST. MARK'S SQUARE, VENICE. Oil on canvas; and a companion by the same hand, a 'Venetian Canal Scene' - £10,000-£15,000; ATTRIBUTED TO LUDOLPH BACKHUIZEN - A DUTCH COASTAL SCENE WITH MAN O' WAR -Indistinctly signed with initials, oil on canvas; and a companion by the same hand, a pair. £15,000-£25,000.

AN ITALIAN [GUBBIO] ISTORIATA MAIOLICA LUSTRED DISH FROM THE WORKSHOP OF MAESTRO GIORGIO ANDREOLI, EARLY 1530S “AENEAS AND ACHATES LEAVING THEIR FRIENDS TO EXPLORE THE COAST OF LIBYA”. £20,000-£30,000.

The auctioneers have also featured a copy of David Roberts' three-volume elephant folio about Egypt and Nubia, and published in the mid-nineteenth century which could fetch £50,000 according to antiques experts. The item is displayed with an Egyptian mummy mask made of linen and papyrus.

At the time Lowood became part of the council's property portfolio one suggestion made was that the big house could be converted into a so-called boutique hotel.

The latest report to elected members by local government officers says: "The Council is close to being able to secure occupation of the house and an option appraisal process will be undertaken on a range of future uses in the short, medium and long term. It is proposed that this option appraisal will take three months to complete and a report on this will be brought back to members in early 2022.

"The Council is currently undertaking Community based consultation on the Neighbourhood Centre which is focused around Lowood House and the existing estate buildings. It is the Council’s vision that this will attract visitors and tourists to the area as well as strengthen the community function of the Neighbourhood Centre."

Record profit for Borders PPP schools provider

by LESTER CROSS

The partnership in charge of a 31-year Private Finance Initiative [PFI] which procured three secondary schools for Scottish Borders Council has revealed its highest ever annual operating profit while the contribution from local taxpayers is set to increase by over 20 per cent in the current financial year.

Scottish Borders Education Partnership, a Luxembourg-controlled entity, manages and services educational establishments in Duns, Earlston and Eyemouth under the agreement, signed by councillors in 2007 and which runs until 2038. The schools became fully operational in 2009.

Accounts for 2020, filed by the Partnership's directors at Companies House show a profit of £1.425 million was made last year despite the presence of Covid 19. It means that since the initiative was launched SBEP has racked up total surpluses of £10.576 million. according to figures contained in successive annual reports.

In a reference to Covid, the annual report states: "The FM (Facilities Management) contractor continues to provide essential services. There has been no financial or operational impact on the company due to Covid 19". In fact turnover at £5.177 million was well up on the £3.837 million logged in 2019.

The Partnership was able to pay dividends of £197,000 to its parent company. The Borders operation is 100% owned by BBGI Investments SCA.

According to the accounts document: "The project continues to perform generally in line with the modelled expectations and management of the scheme both logistically and financially remains under control. The directors remain confident the company will maintain the current level of performance and keep meeting the obligations under the contract".

Meanwhile, Scottish Borders Council's unaudited accounts for 2020/21 show how payments for the schools continue to spiral with another significant increase during 2021/22. 

This year the total bill will be £13,944 million - £5.727 million for services; £5.021 million for reimbursement of capital expenditure; £3.202 million for interest charges.

The equivalent figures for 2020/21 required a total payment of £11.457 million - £5.401 million for services; £3.226 million for reimbursement of capital expenditure; £2.830 million for interest charges. That means there has been a £2.487 million hike in PFI payments in a single year, equivalent to 21.7%.

Back in 2014/15 the total amount required to meet PFI commitments was £8.296 million (£5.520 million for services and capital expenditure reimbursement, and £2.776 million to cover interest).

A report published in 2018 claimed PFI debt for the British taxpayer was more than £300 billion for infrastructure projects with a value of £54.7 billion.

And figures published in the same year suggested the total annual amount Scottish local authorities were paying for legacy PFI schools schemes had reached £434 million - a sum equivalent to almost ten per cent of the nation's schools budget.

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Late night session for vetted Avocet investors

by OUR BUSINESS STAFF

Management at the troubled Avocet Group of 'disruptive technology' companies will decide which of Avocet Natural Capital's [ANC] shareholders will be entitled to take part in a late night annual meeting amid claims the event is in danger of being 'rigged and potentially illegal under company law'.

In a move said to be necessary to accommodate American-based 'mystery investors', the first Avocet AGM for two years has been scheduled for 9.30 pm UK time on September 30th.

The main business, according to Group chairman Martin Frost, is to enable a vote on a proposed 50 cents per share dividend bankrolled by a $20 million draw down from a so-called escrow fund provided by the enigmatic PCH outfit. But only those shareholders whose shares are confirmed to be "Bonafede" by a firm of insolvency experts will receive a dividend.

Mr Frost circulated details of the manner in which the meeting will be conducted and the terms of the dividend offer in a weekend email to ANC's hundreds of shareholders who, between them, are said to have parted with at least £16 million for no return so far.

In October 2019 the annual meeting of Avocet Infinite (now Omega Infinite in compulsory liquidation) was immersed in controversy after the directors banned known 'dissidents' and 'naysayers' from attending proceedings in York. There have been no further annual meetings or audited accounts produced since then. Following the announcement of this month's AGM a number of stakeholders took to the Avocet Independent Forum to express strong views and to put forward resolutions to be debated at the meeting.

Commenting on the late night start to proceedings, a Forum contributor identified only as FDF wrote: "First, I note the change in time from 3 pm to 9:30 pm and would point out that 9:30 pm UK time is 1:30 pm on the west coast and 4:30 pm on the east coast of the US. Clearly, the meeting could start much earlier and still accommodate the “mystery investors” workday in the US. My conclusion is that this very late start is simply another attempt by Frost to discourage shareholder participation."

Among the proposed resolutions it was recommended "that the Directors be instructed to immediately retain the services of a collection agency on a contingency fee basis (fees are tied to their relative success or failure) to take any and all possible measures to collect the £6,225,000 owed to Avocet Natural Capital by Martin Frost [for unpaid shares]."

A separate resolution requested that "an accounting firm with no previous connection to Avocet or Martin Frost be hired to conduct an independent audit of the books of Avocet Natural Capital to confirm that all spending by the company was for legitimate business purposes. For the sake of clarity, the purchase of champagne, wine, artwork, books and antiques is NOT considered to be a legitimate business purpose."

In his latest letter to ANC shareholders Mr Frost stated that ANC Plc would draw down $20 million  from the escrow account and shareholders would be asked to confirm the following directors’ recommendations:

"That the offer from PCH and the Frost family is accepted as to their dividend pass providing that the monies are divided as follows amongst the remaining participating shareholders.

"$10 million US dollars is held in reserve to pay for contingencies such as the proposed litigation with Ms. Emma Porter [administrator of Orrdone Farms Limited] and Omega Infinite Plc settlements.

"$10 million US dollars dividend is given to the approved participating shareholders at the gross rate of $0.50 cents per share.’

"In February 2022, it is hoped that ANC Plc will draw down a further $20 million US dollars from the escrow account thus allowing a further gross $1 US dollar to be divided amongst participating shareholders."

And Mr Frost urged readers to note: "A participating shareholder is an ANC Plc shareholder who has his / her Omega infinite Plc shares approved by Begbies Traynor [Omega Infinite liquidators] as being Bonafede (sic)."

So far as access to the AGM is concerned, he wrote: "Shareholders entitled to vote & participate will receive by email login details & proxies on Thursday 23rd September, seven days prior."

After reading Mr Frost's communication, a seemingly irate shareholder who contacted us remarked: "I continue to be astounded by the generosity of Frost and his mystery investors who now, apparently, are prepared to waive their right to this dividend.

"Since he states that we shareholders will therefore receive $ 0.50/share out of a distribution of $10M, that means that out of the 50M issued ANC shares, only 20M will receive a dividend. Or, to put this another way, Frost is telling us that he and his mystery investors now own 60%, or 30M, of all of ANC’s issued shares.

"The problem with this is that as of the latest Confirmation Statement, Frost and his extended family only owned 12M shares, more than half of which weren’t paid for. And I still cannot find even one shareholder who has sold their shares to any of Frost’s mystery investors. So where did their extra 18M shares come from? My second issue is this: if Frost’s mystery investors do indeed own shares in ANC, without the issue of an updated Confirmation Statement prior to the meeting, how will we, the shareholders, be able to judge whether a vote at the AGM has passed or not?"

Will veil of secrecy be lifted from Borders CGI contract?

SPECIAL REPORT by OUR BUSINESS STAFF

The progress and problems which flow from the largest single contract in the history of Scottish Borders local government - the outsourcing of IT services to technology giants CGI (UK) Ltd.- have been kept well hidden from public scrutiny ever since the original multi-million pound deal was signed in 2016.

Council taxpayers were not told of the unprecedented £99 million contract extension to the year 2040 until the papers were signed last September by Scottish Borders Council and CGI executives. Details were only made public following Freedom of Information requests for copies of documents and private minutes.

And over the last 12 months alone members of the council's so-called Major Contracts Governance Group have spent an estimated 110 minutes considering 144 pages of 'Not For Publication' briefings and updates on CGI's performance. Another such briefing is scheduled to take place behind closed doors at a Group meeting next week.

Council officers did admit there had been issues and difficulties in the early stages of the relationship with CGI, attributed to the sheer scale of the transition of information technology services.

But even now, five years into the deal, it is claimed that progress has been limited in some areas while a pledge by CGI to create 200 highly skilled jobs in the Borders during the three years from 2016 was not delivered.

A recent full council meeting heard (in public) that the full jobs count now promised by the IT contractors was not now expected for a further six years.

Opposition leader Councillor Stuart Bell (SNP) had asked for an update on the delivery of new jobs and the development of a CGI service centre in a new-build facility at Tweedbank.

On the jobs issue, Executive member Councillor Mark Rowley (Con) told Mr Bell: "The Contract between the Council and CGI was revised with the agreement of Council in 2020 and as part of this change the timescales for completion of the delivery of the jobs commitment was revised to 2027.

"The original contractual commitment for CGI to deliver 147 jobs with a further 10 Modern apprenticeships, with a non-contractually binding stretch target of 250 jobs, was not amended by the 2020 agreement and remains in place. Currently CGI has 71 members of staff working on the SBC contract, including nine Borders based graduates who joined the company during the month of August."

And so far as the service centre was concerned, Mr Rowley said: "The new office which will house the CGI Borders Service Centre at Tweedbank is now due to be completed for occupation in December 2021. The project was delayed by COVID 19 and this provided the rationale for revising the job creation timescale. The new facility at Tweedbank should drive a step change in CGI’s staffing complement in the Borders.

As Not Just Sheep & Rugby discovered earlier this year the current number of jobs 'created' by the contract includes the headcount of 49 posts transferred from SBC's IT department back in 2016.

Commenting on the information received as a result of his question, Councillor Bell told us: "I think the Borders public will share my astonishment that the original commitment by CGI to provide 100 new jobs by 2021, whilst still regarded as a ‘contractual commitment’, has been extended to 2027. 

“I have thought for some time that the Council’s Administration have not been exercising effective oversight of the agreements with their IT contractor.  The original contract in 2016 stipulated member oversight and when that has eventually been implemented most of the elected councillors' oversight - including oversight of the (non) realisation of new jobs - has been conducted in private."

Councillor Bell's group is now pushing for much more of the deliberations on the CGI contract to be conducted in public for the first time.

He said: "I welcome the new commitment given by Councillor Rowley that he will discuss with officers how to take more of the content of the quarterly scrutiny of the CGI contract out of private business."

A source who contacted Not Just Sheep & Rugby challenged the claims that Covid had been to blame for delays in setting up the new Tweedbank centre and the failure to meet promised jobs growth.

The contact told us: "It is nonsense to say that the late building completion was the rationale why the job numbers date was extended. CGI have only ever occupied a fraction of the space at Council HQ - essentially free of charge - and with Covid everyone has been home working so the new building is irrelevant in that context."

Our source believed that up to now the CGI contract had "delivered nothing of significance", including the much praised Inspire Learning iPad roll out as that was "all Apple systems which are plug and play". 

And so far as the number of posts delivered by CGI was concerned: "Jobs are a myth with lots of smoke and mirrors to keep the [elected] members warm. 

"The transformation programme to save tens of millions is also way behind schedule. All change but no change. New titles slightly different areas of responsibility but actually business as usual".

According to the individual elements of the early phases of the transformation programme were still not working satisfactorily.

Early on there were significant issues with the delivery of the so-called Business World programme for SBC. And in 2017 a council spokesman confirmed that following delays with the installation of Digital Customer Access (DCA) a sub-contractor of CGI had been fired.

According to the local authority at that time: "The council has requested that its IT partner CGI terminates its contract with Agilisys, a third party supplier, following Agilisys’ failure to meet key milestones in the Digital Customer Access project to develop new and improved digital services for customers. The council will work with CGI to identify a new solution to achieve the project objectives."

Alongside the massive deal with CGI, SBC has awarded several contracts to IT consultancies since 2016.

For instance, in April this year a £151,500 council contract was awarded to Glasgow-based Hennessy IT Consultancy "to provide professional consultancy and support for the council's legacy Enterprise Resource Planning (ERP) system Unit 4".

A £186 million outsourced IT contract between City of Edinburgh Council and CGI, signed in 2015, is very similar to the Borders model, according to technology experts.

Reports in the IT trade press from 2015 said CGI planned to automate and integrate back office processes for City of Edinburgh with a new Enterprise Resource Planning system called the Unit 4 ERP project.

The task was to replace and consolidate several council functions including human resources and payroll.

According to the media coverage CGI and the Edinburgh local authority opted for Unit 4's Business World, formerly known as Agresso. Agilisys Ltd. was sub-contracted to provide the Unit 4 solution.

But by 2016 the project had slipped behind schedule due to "technical and resource challenges". These issues had not been resolved by 2017, and later reports considered by Edinburgh councillors revealed the ERP project had been 'reset' in June 2018. However, the reset no longer included Unit 4.

The fraught relationship between CGI and Agilisys Ltd. resulted in legal action with claim and counter claim by each party ending up in the Court of Session.

In a 226-page judgment the judge Lord Bannatyne commented that many of CGI's witnesses were unreliable. Only one of the 15 witnesses CGI called, provided evidence which the judge was "prepared to accept in its entirety". In contrast, the judge found Agilisys' witnesses were "satisfactory", whose evidence was credible and reliable.

Legal proceedings are on-going.

 

Almost a third of Borders schools in 'poor' condition

by EWAN LAMB

More than 4,000 Borders pupils are being educated in buildings which have been rated 'poor' in the 2021  report on the condition of Scotland's school estate, with 17 of the region's 59 primaries and three out of nine secondary establishments showing major defects or being in need of continuous repair.

The statistics show that while overall just 9.7% of Scottish schools have a C (poor) rating, 28.8% of Scottish Borders Council's primary schools have been deemed unsatisfactory along with a third of the region's secondaries. 

At the other end of the ratings only eight (13.5 per cent) of Borders primaries receive an A=Good although five high schools (55.5 per cent) have been awarded top marks.

The report from the Scottish Government explains that the condition of a school is based on the following criteria, as assessed by local authorities: 

"Condition A: Good – Performing well and operating effectively (physical element carries out function totally as new including consideration of the transverse elements); Condition B: Satisfactory – Performing adequately but showing minor deterioration (physical element carries out function satisfactorily, may show signs of age and including consideration of some transverse elements); Condition C: Poor – Showing major defects and/or not operating adequately (physical element does not carry out function effectively without continuous repair, shows signs of age) and does not consider most of the transverse elements".

According to the SNP Government the national educational estate is in a better condition than it has ever been. They say: "The new statistics have revealed 90% of facilities were in good or satisfactory condition in April 2021.

"The figure stood at 61% in April 2007, with the improvement also seeing the percentage of pupils taught in good or satisfactory schools increase from 61% to 92% over the same period. This is accompanied by a 77% fall in the number of pupils educated in schools in poor or bad condition. 1,000 schools have also been ‘substantially’ refurbished during the last 14 years (2007-08 to 2020-21)."

But the data for Hawick and Galashiels, the two largest towns in the Borders, appear to be at odds with the national trend. Every school in Hawick, and the large majority of educational facilities in Galashiels are rated 'poor'. The exception in Galashiels is Langlee PS with an A grade.

Across the region 2,600 primary pupils - based on 2019 school rolls - are 'housed' in 17 inadequate schools with a further 2,000 secondary age children receiving their education in the 'C' rated Galashiels Academy, Hawick High School and Selkirk High School.

Here are the individual ratings for each Borders school with pupil numbers in brackets:

Primary sector:

Ancrum - C (40); Ayton - B (89); Balmoral - C (115); Broomlands - A (241); Broughton - B (51); Burgh - C (195); Burnfoot - C (252); Channelkirk - B (31); Chirnside - B (173); Clovenfords - A (120); Cockburnspath - B (36); Coldingham - C (68); Coldstream - C (131).


Denholm - A (102); Drumlanrig St Cuthbert's - C (314); Duns - A (300); Earlston - C (141); Eddleston - B (33); Edenside - B (297); Ednam - B (35); Eyemouth - C (337); Fountainhall - B (11); Glendinning Terrace - C (77); Gordon - B (63); Greenlaw - C (50).


Halyrude - B (84); Heriot - B (23); Jedburgh - A (376); Kingsland - A (337); Kirkhope - B (20); Knowepark - B (239); Langlee - A (236); Lauder - B (234); Lilliesleaf - B (59); Melrose - B (299); Morebattle - B (53); Newcastleton - B (55); Newlands - B (67); Newtown - B (106.


Philiphaugh - B (110); Priorsford - B (423); Reston - B (40); Sprouston - B (17); St Boswells - B (137); St Joseph's - B (22); St Margaret's - C (69); St Peter's - C (235); St Ronan's - B (256); Stirches - C (107); Stow - B (76); Swinton - C (65).


Trinity - C (213); Tweedbank B (174); Walkerburn - B (25); West Linton - A (227); Westruther - B (29); Wilton - C (196); Yarrow - B (13); Yetholm - B (41).


Secondary schools:


Berwickshire High - A (647); Earlston High - A (1,086); Eyemouth High - A (492); Galashiels Academy - C (837); Hawick High - C (787); Jedburgh Grammar - A (350); Kelso High - A (592); Peebles High - B (1,318); Selkirk High - C (400).

The £1 million+ costs of 'going bust'!

by our FINANCE STAFF

The financial collapse into insolvency of two members of the Avocet family of 'disruptive technology' businesses has already generated liquidation and administration costs of over £1 million, none of which will be met by the directors of the respective firms.

Financial information about the time costs, expenses and fees paid for specialist advice racked up by the liquidators of Omega Infinite PLC and the administrators of Orrdone Farms Ltd. can be found in recent progress reports to creditors of the companies who are themselves owed in excess of £25 million, according to claims submitted.

In both cases there are insufficient assets to meet the considerable costs of the insolvency experts who were drafted in to investigate Omega's and Orrdone's complicated affairs.

UK Agricultural Lending Ltd. [UKALL], the farming financiers owed more than £4 million by Orrdone - a £1 company headed by controversial businessman Martin Frost - has supplied cash towards payment for work done by joint administrators Emma Porter and Jeanette Brown. Mrs Brown relinquished her position in February leaving Ms Porter as sole administrator.

A report published by the Orrdone administrator this week told creditors: "There have been insufficient asset realisations in the case to cover the joint administrators' time costs. UKALL has provided funding to allow Mrs Brown's time costs to be paid covering the period to her resignation. £84,975 plus VAT has been paid.

"Ms Porter has agreed with UKALL that she will defer payment of her remuneration until the outstanding issues in the case have been progressed".

According to figures published in the report the administrators' time costs so far amount to £351,552 with expenses shown to be £113,203 and forecast future time costs a maximum of £150,000. So-called Category 1 payments (for professional advice/services) total £40,026 with at least a further £50,000 needed under this heading, because of 'all the inherent uncertainties connected with the case'.

A breakdown of the Category 1 schedule shows the following items: pest control £1,779; site security £120; rates £338; gardening £2,062; planning fees£7,838; legal advice £20,451; auctioneer's agents £500; and insurance £6,936.

Meanwhile, Omega Infinite joint liquidators Ashleigh Fletcher and Joanne Hammond provided details of their liquidation costs in a report published in July. In this case creditors are claiming a total of £20.9 million, with the liquidation costs approved by a resolution of creditors on July 30th 2020.

Total time costs so far are given as £317,679 (990 hours @ £320.79 per hour). In addition MD Law (Yorkshire), a specialist firm, provided legal advice at a cost of £30,290. And valuers and insurance providers Eddison is receiving £55,534 for services rendered. Other costs include a £5,000 Official Receiver's administration fee and a £6,000 Secretary of State's fee.

Yesterday we reported that the Orrdone Farms administrator was pursuing legal action under the Insolvency Act in a bid to force all three of the company's former directors to assist with her investigation. So far the board members have refused to co-operate and have ignored all requests for information, according to Ms Porter.

A keen observer of the Avocet Group's financial plight told us: "The costs [of liquidation and administration] are much higher than they need to be because of the directors' breach of their fiduciary duties by failing to cooperate with Aver [Orrdone administrator], and in the case of Omega, again contrary to their fiduciary duties, the failure to provide any annual accounts since 2017.

"It should always be remembered that neither of these penniless companies ever produced a single marketable item which makes the current situation all the more remarkable and unacceptable".