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Was AVRO trading illegally or fraudulently for the last 2+ years? Was it like a Ponzi Scheme?
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oliverbrown said: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
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Sounds like Jake went AWOL when the news was broken to his staff that administrators had taken control. Milked it down to the wire, did a runner and left everyone (customers and staff) in the lurch. Disgusting.3 -
Hopefully the Times will pickup on the links to Dyball Associates and follow the trail to other failed suppliers like Utility Point and Green Supplier. There's more dirt to follow I'm sure.
@[Deleted User] - you appear to be almost protective of the practices that AVRO adopted. Here's a snapshot of AVRO last published Profit & Loss Account:
Cost of Sales on revenues of £389M were 99.927% - Hardly a sustainable business model - in any industry The £28M of Administrative Expenses no doubt encompasses syphoning off 'expenses' in cash from the business leaving the £28M black hole. Payroll costs for 66 employees at the time only accounted for £2M of the £28M. £2.25M was marketing services paid to the Directors through their SPV. And the rest? who knows.
Remember, these were figures from 27 months ago - Lord only knows how much this has mushroomed to since then.
Their auditors (Baldwins Audit Services, now Azets) must be quaking right now - they have a lot to answer for - all for an £39k fee - cheap by any standards for a company with a £3989 Million turnover.
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I just searched for 'how to start an energy company'. First result - https://www.dyballassociates.co.uk/how-to-start-an-energy-company
"In addition to these requirements, Ofgem are on the verge of implementing additional licensing tests which will inspect the financial health of new businesses. Due to come into force in late spring 2019, these aim to ensure new suppliers have adequate funds to manage their business for 12 months post licensing."
I wonder if Avro was subject to these additional licensing tests.
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indigoben 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!
Avro also loaned £830,000 to another linked company called Berkeley Swiss which is owned by the same directors. There is a lot of money swirling around between linked companies owned by the same peopleRemember the saying: if it looks too good to be true it almost certainly is.2 -
jimjames said:indigoben 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!
Avro also loaned £830,000 to another linked company called Berkeley Swiss which is owned by the same directors. There is a lot of money swirling around between linked companies owned by the same people
So if the "marketing" company invoice AVRO for their services, who dictates what charges are "reasonable".
£100 per hour, £1000, £5000? Is there any mechanism to check that X hours work were actually done?
Can they get away with just making up charges and invoicing accordingly??How's it going, AKA, Nutwatch? - 12 month spends to date = 2.98% of current retirement "pot" (as at end April 2025)1 -
£2,250,000 buys a lot of Google Ads...
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Probably buys a good few holidays in the Maldives also for Jake and his cronies.0
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"Clean" audit report on 30 June 2019 accounts requires close scrutiny!I wonder how much scepticism the auditors had when reviewing cash flow/profit forecasts in assessing "going concern" principles and whether they were robustly challenged. Somehow I suspect they were a bit lacking in this department!Interestingly, the audit report sign off date was 30 June 2020 so the 2020 accounts would have been available (well 11 months to 31 May 2020 at least) to review as a basis for a clean audit report. Yet no accounts to 30 June 2020 have ever been filed. Did they show a further deterioration one wonders?Something definitely not right!1
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Audit absolutely does not appear right - using a 'small' audit firm for such a large turnover probably tells you all you need to know - a £40k fee would be big money for a small audit practice - which then exposes them to undue influence from a no doubt "charming and charismatic" young CEO such as Jake Brown.
No disrespect intended to Laura Hinsley (the audit partner) - her story will be of great interest.2
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