Was AVRO trading illegally or fraudulently for the last 2+ years? Was it like a Ponzi Scheme?

wakeupalarm

Avro's collapse is expected to cost £700m

StartledJesus

https://www.energylivenews.com/2022/04/21/avro-energy-bosses-were-paid-250k-a-month/ 

ihatetrump

StartledJesus said:

https://www.energylivenews.com/2022/04/21/avro-energy-bosses-were-paid-250k-a-month/ 

what a crock of.........

Speaking in a session of the Business, Energy and Industrial Strategy Committee about energy pricing and the future of the energy market, Jake Brown, Chief Executive Officer of Avro Energy said: “I was not paid directly by Avro. I essentially worked for a management company that charged a fee to Avro.”

Asked about how much that fee was, he said: “It varied as the company grew. I think the latest figure was around £250,000 per month. That was not just for myself, that was for a team of key management personnel, six people.”

In response, BEIS Select Committee Chair Darren Jones said “that’s a lot of money”.

Jake Brown went on to say: “The business was performing well, when we were looking at all indicators, in the year 2020, the company made a profit of £30 million after paying those management fees.”

Asked about how much of his personal capital he put to start the business Mr Brown said: “I would probably say a quarter of a million pounds, that was family money lent to me.”

Just in case Jake doesn't remember: the management company he refers to is Sentido Marketing and in the period ending June 2019, when AVRO lost £27,421,381, they paid £2,250,000 to Sentido and lest he also forgets, they lent (interest free) £830,754 in cash to Berkeley Swiss - a construction company owned by him and his father and absolutely nothing to do with AVRO or the Energy sector.  

His reference to the year 2020 results is a red herring - accounts haven't been filed yet - they were originally due to be filed on 30 June 2021 but slippery Jake changed the year end by 1 day to buy himself & his Dad another 90 days grace on filing accounts - and we all know what then happened before that 90 day extension was up.

Rotten to the core.......

BobT36

"they lent (interest free) £830,754 in cash to Berkeley Swiss - a construction company owned by him and his father and absolutely nothing to do with AVRO or the Energy sector. "
I still don't get how this sort of thing is legal. SUCH a huge conflict of interest. Especially for something essential such as public utilities, which should be absolutely protected. 

And sure, a "management team of six"...in a "marketing" company. Guess who got the lion's share. 
He even looks like a slimy estate agent / recruiter. Obviously daddy was the brains here. 

MWT

BobT36 said:

"they lent (interest free) £830,754 in cash to Berkeley Swiss - a construction company owned by him and his father and absolutely nothing to do with AVRO or the Energy sector. "
I still don't get how this sort of thing is legal. SUCH a huge conflict of interest. Especially for something essential such as public utilities, which should be absolutely protected.

With the correct shareholder disclosures and tax treatment there is nothing inherently wrong with a company seeking to maximise returns from excess cash which could eventually provide greater returns for the shareholders.

..but as a director you have to be very sure that it is 'excess cash' and careful to make sure the terms make commercial sense, but I would not be surprised to find that they were skating along the edge of what was allowed and were not objectively prudent in some of the decisions they made.

This is what the administrators will be looking into both from the perspective of cash recovery and also any recommendation they will make regarding the future suitability of the directors to ever serve in that capacity again...

BobT36

^ Yeah but to their own companies, where they personally benefit? Why are there no controls around that. 

There's SO many other investment options that could be used, that don't involve being able to direct money into their own pockets.. 

The topic of "investing" (for Shareholder profit) customer's credit balances and other money that is being held in the context of essential public utilities, should also be a thing. It's not like paying a utilities supplier is exactly optional nowadays.. 

MWT

BobT36 said:

^ Yeah but to their own companies, where they personally benefit? Why are there no controls around that. 

There's SO many other investment options that could be used, that don't involve being able to direct money into their own pockets..

I would worry less about that, and more about this...

BobT36 said:

The topic of "investing" (for Shareholder profit) customer's credit balances and other money that is being held in the context of essential public utilities, should also be a thing. It's not like paying a utilities supplier is exactly optional nowadays.. 

The is more scope to avoid repetition of the recent events by ring-fencing customer credit balances than there is trying to frame changes to Company law in ways that will achieve what you want without a lot of unintended consequences.

... but as I've said before, be careful what you wish for as the tighter you limit what the company can do with the working capital derived from customer payments, the less likely you are to ever see 'low' energy prices again...

Perhaps that is the price we have to pay for actually protecting those customer balances rather than just mutualizing the loss...

ihatetrump

... but as I've said before, be careful what you wish for as the tighter you limit what the company can do with the working capital derived from customer payments, the less likely you are to ever see 'low' energy prices again...

The fact is however that EVERY energy customer will now be paying an estimated extra £94 per year to cover the estimated £2.4Bn cost of the bailing out 30 companies that have failed so far - and don't be surprised if this cost goes up further once the administrators have finished.

There's no such thing as a 'free lunch' but sadly everyone now has to pay the price, even those who weren't 'rate tarts' 

Still you can be certain of one thing, Jake and his dad won't be in fuel poverty this winter, unless of course, they find themselves in free accommodation, courtesy of Her Majesty's Government!

wakeupalarm

ihatetrump said:

Still you can be certain of one thing, Jake and his dad won't be in fuel poverty this winter, unless of course, they find themselves in free accommodation, courtesy of Her Majesty's Government!

They won't have to pay the cost of energy or food whilst inside.

Actually, that might be a tip for next winter.  Get yourself nicked to save on energy and food costs! 

ihatetrump

They won't have to pay the cost of energy or food whilst inside.

 

In other words, come hell or high water, every one of us will still be paying for their misdemeanors. They milked and exploited the system and sadly they will continue to do so  with their new venture Terax Commodities and their involvement in Dyball Associates - rotten to the core.