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

ihatetrump

@BobT36 - there's a whole slew of stuff with AVRO on this one - follow the trail on Companies House with all the shareholdings and Directorships of Jake Andrew Brown (CEO and founder (at age 22) of AVRO ENERGY) - it will lead you into a relationship/directorship/ownership with Dyball Associates and Dyball Holdings who are then interconnected to various Energy Companies (largely failed), but including Green Supplier and Utility Point. 

They won't be suffering fuel poverty this winter, more likely sunning themselves on a beach in the Maldives.

This is why it is crucial to establish if and when AVRO was trading insolvently - Directors can then be held personally liable - especially if there are ill-gotten gains.

indigoben

BobT36 said:

Indeed, this is the bigger issue for me, less so them using advance payments, it's what they were using them FOR. As they couldn't legally pay themselves dividends, they've just got the money out via "Director loans" and "Marketing Services". How the heck is that legal? Trouble extracting money from your failing company? Just set up a separate "marketing" company, have it do !!!!!! all work, but charge millions for it, job done. it wasn't even owned by one of their mates as is usually done!

The director's loans are repayable, even in insolvency. If not paid back then the director(s) may end up in court, made bankrupt and barred from being a director in the future.

I don't buy the marketing payments argument either. Companies can't just transfer money out under some excessive fees arrangement. Any transaction will be looked at for what it is - ie. was it to pay for a cost with profit, or was is it actually hiding an inter-company transfer of money.

rogerc446

Dyball Associates (Director Jake Andrew Brown) market themselves as being able to consult and supply software to businesses looking to enter the energy market (I'm assuming it's the software they developed at Avro)  Interesting enough in the last year or so Avro Data & Technology Limited has been created as well.  I'm wondering whether they've transferred the IP and other assets regarding the software to this (or to Dyball) to allow them to continue to market it to other companies after Avro goes bust.

There seem to be a significant web of companies all related and with Jake Andrew Brown etc..as directors
AVRO COMMERCIAL ENERGY TRADING LTD
DYBALL HOLDINGS LIMITED
DYBALL ASSOCIATES LIMITED
AVRO DATA & TECHNOLOGY LTD
BERKELEY SWISS LTD (Housing Development - so separate to others)
AVRO COMMERCIAL SHIPPING LIMITED
AVRO COMMERCIAL ENERGY LIMITED
SENTIDO MARKETING LIMITED
AVRO GROUP LIMITED
AVRO ENERGY LIMITED

Can ofgem refuse licenses to companies directed by Jake Andrew Brown in the future?

As a sidenote, ironic article here from 2016 on telegraph website (behind paywall)
Jake Brown "... said he was shocked that GB Energy which went bust last weekend had blamed its collapse on rising energy prices"
"To simply say prices have gone up and bat it off as that is not fair" he said, "prices have risen buy they have not risen to levels to cause financial stress towards a business and certainly not insolvency"
...
"If you're hedging your volumes you really are limiting the impact that those spikes are having" he said.

ihatetrump

Dyball Associates has been around for over 25 years as a company - I do wonder if they developed the software as well as setting up 40 energy supply companies - some dormant - presumably off the shelf and available for purchase, others trading, and yet others failed 

egyptiancotton

Some interesting tweets from The Times:

• The young boss of a collapsed energy company that has left more than 580,000 families fearing higher bills this winter is at the heart of a web of firms – including an advertising agency and a building company – that appear to be receiving funding from Avro Energy.

• Jake's father Andrew joined the business in 2017. The pair do not appear to have invested any of their own money in the company, which has been financed by the advance fees paid by customers. Each owns half the shares in Avro Group, the holding company for a string of businesses.

• Accounts for associated companies show that Avro Energy provided a £830,000 unsecured, interest-free loan to Berkeley Swiss Limited – a construction company also controlled by Jake Brown and his father.

• Avro Energy also records £2.25 million in management charges for an advertising agency called Sendito Marketing, also owned by the Browns. A further £163,656 of loans to the pair are recorded in the most recent accounts.

• One expert said that Avro Energy appeared to have funded its losses by “stretching” the advance payments made by customers.

• Dozens of employees at the headquarters of Avro Energy were told on Wednesday that administrators had taken control. Meanwhile, visitors to Brown’s detached family home in Sketchley Old Village, Leicestershire, were told that Jake was “not there”.

Scandalous, if you ask me. Makes me so angry.

Sea_Shell

Stinks to high heaven!!!

😡😡😡

oliverbrown

Link to article (I can't read it, paywalled): https://www.thetimes.co.uk/article/avro-energy-sent-money-to-firms-run-by-owners-x328n95qj

[Deleted User]

Insurance bonds; escrow protection of customer funds; constant financial oversight; mandatory hedging etc are all possible but will never guarantee that a supplier will not fail. What it would guarantee is higher energy prices which would not suit those who seek cheap energy prices irrespective of all the warnings of potential supplier failure: holding on to customer credit balances and raised DD payments being two of them.

jimjames

indigoben said:

jimjames said:

indigoben said:

I do agree that there should be ringfencing of customer money as a matter of principle. But again, in this case with £18.5m in the bank and I assume OFGEM have first call on that money I don't think it would change anything in this case. Certainly at that point, the money was there.

£18.5m in the bank was almost 2 years ago, who knows what it is now as they've delayed filing their accounts by a loophole on Companies House. I suspect there probably isn't much in the bank now though.

They've delayed filing accounts, but there may be perfectly good reasons for that. I'm a director of a company that had an extension last year - everyone got one automatically. In fact I'm trying to sort out our accounts at the moment, and our accountants are snowed under due to COVID issues.

Repeated technical loopholes to delay filing are not a normal action for a company. Yes there were extensions but moving your reporting date by a day to delay filing is something I've seen done by companies with something to hide.

pearl123

I hope this gets covered by other newspapers.