Will £30m of Avocet patents fall to the Crown?

by OUR BUSINESS UNIT

For the second time in little more than a year the principal entity in the Avocet Group of businesses is to become the subject of a compulsory dissolution notice by the Registrar of Companies, raising the prospect that £30 million worth of patents and licences could become the property of the Crown.

The notification which will be published in The Gazette, the UK's official public record, on May 10th warns that the 'flagship' of the Avocet fleet will be struck off the companies register not less than two months from now "unless cause is shown to the contrary".

An identical course of action was initiated by Companies House in April 2021, but the notice was subsequently suspended. It states: "Upon the company's dissolution, all property and rights vested in or held in trust by the company are deemed to be bona vacantia, and will belong to the Crown".

The published notice does not specify why the drastic action is being taken. But the Companies House website shows ANC's accounts are long overdue. Financial statements for the period up to December 26th 2019 should have been lodged with the business regulator by December 28th 2020 while an updated confirmation statement was meant to be submitted by November 3rd last year.

According to ANC's last audited accounts (up to December 2018) £29.988 million of shareholders' funds were used to purchase £30 million worth of patents and licences. £20 million of the cash went to Avocet Infinite PLC (now re-named Omega Infinite, and in compulsory liquidation), with the remaining £10 million going to Avocet IP Ltd.

Senior Statutory Auditor Alan Meikle, of RfM Fylde, who audited the 2018 accounts noted in his report "Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon".

A paragraph in those accounts shows that "on November 2nd 2019, post year end, control has passed to Martin Frank Frost, the director".

However, Mr Frost, the former Avocet Group chairman was forced to resign his directorships of multiple businesses after he was declared bankrupt last October by a judge.

The latest company records show the directors of ANC are Dr Bob Jennings and a recently formed company called Therapus Ltd. with Eirlys Lloyd Company Services Ltd listed as company secretary.

Avocet's 600 shareholders who have yet to see a return for their investment in the Group's supposedly revolutionary fuel concept learned last month that the sale of the patents was once more imminent, and dividends would follow to 'approved' investors.

Mr Frost wrote in an email: "On Friday 29th April I travel to Israel for medical treatment. Whilst in Israel I should conclude the sale of the creative genius of Dr. Glyn Short and Dr. ‘Bob’ Jennings. Payments will now commence early May and will be first made on a need basis. In broad terms I expect that a total price of some £400 million will be secured for the Short & Jennings’ (fuel) & Frost concepts (agriculture) intellectual property."

But disgruntled contributors to an Avocet shareholders' online forum subsequently claimed that Mr Frost's status as a bankrupt meant he had no right to sign deals with any party, and that he should not be engaged in managerial business activities.

In a follow up email last week Mr Frost told readers that following another 'incident' he would be unable to depart for Israel until May 12th.

The sale of patents to the Israeli state with involvement of that country's secret service formed part of the evidence at Mr Frost's bankruptcy hearing at Leeds last October. The judge heard that a £6.6 million payment from the deal would allow Avocet's chairman to pay his debts.

But Jonathan Rodger, counsel for bankruptcy petitioners United Kingdom Agricultural Lending Ltd (UKALL) dismissed the claims made by Mr Frost as "fanciful and utterly without substance".

Mr Rodger told the court: "There are no transaction documents, by which I mean documents effecting the sale of $40M of intellectual property to the state of Israel. The idea that such a transaction would not have generated a forest of documents is absurd. There are no minutes of the board of ANC or of a shareholders meeting of ANC approving the disposition of such an enormous amount of ANC’s money to Mr Frost. Obviously for a company to just give $6.1M of its money to a director is an eyebrow raising thing which ought properly to be done with attending formality."