Asset Stripping - Per the Serious Fraud Office (1 Viewer)

[Diehard Si]

http://www.sfo.gov.uk/fraud/what-is-fraud/corporate-fraud/asset-stripping.aspx

Interesting find ( thanks to @russcov on twitter mentioning this, thought I'd dig out the details and post to here )
Asset stripping

What is asset stripping?
Asset stripping is taking company funds or assets of value while leaving behind the debts.
Company directors transfer only the assets of one company to another and not the liabilities. The result is a dormant company with large liabilities that cannot be met and it has to be put into liquidation
Stripping of company assets is normally done for two main reasons:

• The fraudsters deliberately target a company or companies to take ownership, move the assets and then put the stripped entity into liquidation
• "Phoenixing" - directors move assets from one limited company to another to 'secure' the benefits of their business and avoid the liabilities. Most or all the directors will usually be the same in both companies. This usually arises as a way of 'rescuing' the assets of a failing business rather than targeting a company

Where can I get more information?
Suspected phoenix firms and asset stripping are investigated by the
The Financial Services Authority (FSA)

Companies Investigation Branch, (part of the regulatory arm of the Department for Business, Innovation and Skills).

Should I report to the SFO?
We only conduct investigations into asset stripping where the seriousness and complexity meets our acceptance criteria. If you have information about asset stripping that fits this criteria, then please report it in confidence using our secure online reporting form. You can also send details to us in writing at: SFO Confidential, Serious Fraud Office, 2-4 Cockspur Street, London, SW1Y 5BS.

Case example
An owner of a whisky investment business was found guilty of fraud. A company was established with an issued share capital of 100 ordinary shares of £1 each. It was engaged in marketing to the general public investment opportunities, principally in single malt whisky, but also in champagne. The company went into liquidation a few years later with debts of over £0.5 million.
The founder immediately started to trade under another company which had remained dormant until then and was similarly named. This company engaged in the same activity, had the same supplier and client list. In effect there was no change, certainly in the mind of the investors. The "phoenix" company ceased to trade the year after. The marketing activities throughout the whole period of operation brought in over £4 million from around two thousand investors.

 

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[theferret]

Come back with this when you hear Ryton has been put up for sale, that's the only real asset we have.

 

[torchomatic]

Ah, so we'll have another wave of letters fluttering, will we? Makes a change from the Council. Someone will be along in a minute with a nice little template you can copy and paste.

 

[fernandopartridge]

http://www.sfo.gov.uk/fraud/what-is-fraud/corporate-fraud/asset-stripping.aspx

Interesting find ( thanks to @russcov on twitter mentioning this, thought I'd dig out the details and post to here )
Asset stripping

What is asset stripping?
Asset stripping is taking company funds or assets of value while leaving behind the debts.
Company directors transfer only the assets of one company to another and not the liabilities. The result is a dormant company with large liabilities that cannot be met and it has to be put into liquidation
Stripping of company assets is normally done for two main reasons:

• The fraudsters deliberately target a company or companies to take ownership, move the assets and then put the stripped entity into liquidation
• "Phoenixing" - directors move assets from one limited company to another to 'secure' the benefits of their business and avoid the liabilities. Most or all the directors will usually be the same in both companies. This usually arises as a way of 'rescuing' the assets of a failing business rather than targeting a company

Where can I get more information?
Suspected phoenix firms and asset stripping are investigated by the
The Financial Services Authority (FSA)

Companies Investigation Branch, (part of the regulatory arm of the Department for Business, Innovation and Skills).

Should I report to the SFO?
We only conduct investigations into asset stripping where the seriousness and complexity meets our acceptance criteria. If you have information about asset stripping that fits this criteria, then please report it in confidence using our secure online reporting form. You can also send details to us in writing at: SFO Confidential, Serious Fraud Office, 2-4 Cockspur Street, London, SW1Y 5BS.

Case example
An owner of a whisky investment business was found guilty of fraud. A company was established with an issued share capital of 100 ordinary shares of £1 each. It was engaged in marketing to the general public investment opportunities, principally in single malt whisky, but also in champagne. The company went into liquidation a few years later with debts of over £0.5 million.
The founder immediately started to trade under another company which had remained dormant until then and was similarly named. This company engaged in the same activity, had the same supplier and client list. In effect there was no change, certainly in the mind of the investors. The "phoenix" company ceased to trade the year after. The marketing activities throughout the whole period of operation brought in over £4 million from around two thousand investors.

I'd imagine lawyers have never heard of this.

It's funny actually, as this is essentially what the banks where the taxpayer has a large shareholding have done.

 

[wingy]

Ah, so we'll have another wave of letters fluttering, will we? Makes a change from the Council. Someone will be along in a minute with a nice little template you can copy and paste.

You'd have done it if this technology was available when Rchardson was doing his murky business.

 

[torchomatic]

It was available. There was an offical CCFC forum in those days.

When SISU own our own ground and then sell it to make us homeless then I will.

You'd have done it if this technology was available when Rchardson was doing his murky business.

 

[wingy]

http://www.sfo.gov.uk/fraud/what-is-fraud/corporate-fraud/asset-stripping.aspx

Interesting find ( thanks to @russcov on twitter mentioning this, thought I'd dig out the details and post to here )
Asset stripping

What is asset stripping?
Asset stripping is taking company funds or assets of value while leaving behind the debts.
Company directors transfer only the assets of one company to another and not the liabilities. The result is a dormant company with large liabilities that cannot be met and it has to be put into liquidation

Stripping of company assets is normally done for two main reasons:

• The fraudsters deliberately target a company or companies to take ownership, move the assets and then put the stripped entity into liquidation
• "Phoenixing" - directors move assets from one limited company to another to 'secure' the benefits of their business and avoid the liabilities. Most or all the directors will usually be the same in both companies. This usually arises as a way of 'rescuing' the assets of a failing business rather than targeting a company

Where can I get more information?
Suspected phoenix firms and asset stripping are investigated by the
The Financial Services Authority (FSA)

Companies Investigation Branch, (part of the regulatory arm of the Department for Business, Innovation and Skills).

Should I report to the SFO?
We only conduct investigations into asset stripping where the seriousness and complexity meets our acceptance criteria. If you have information about asset stripping that fits this criteria, then please report it in confidence using our secure online reporting form. You can also send details to us in writing at: SFO Confidential, Serious Fraud Office, 2-4 Cockspur Street, London, SW1Y 5BS.

Case example
An owner of a whisky investment business was found guilty of fraud. A company was established with an issued share capital of 100 ordinary shares of £1 each. It was engaged in marketing to the general public investment opportunities, principally in single malt whisky, but also in champagne. The company went into liquidation a few years later with debts of over £0.5 million.
The founder immediately started to trade under another company which had remained dormant until then and was similarly named. This company engaged in the same activity, had the same supplier and client list. In effect there was no change, certainly in the mind of the investors. The "phoenix" company ceased to trade the year after. The marketing activities throughout the whole period of operation brought in over £4 million from around two thousand investors.

See ,this si where i don't get it ,I thought the Charge over RYton also resided in Arvo /CCFC LTD.

EDIT ;Apologies meant in response to Ferrets post.

 

[chiefdave]

I'd imagine lawyers have never heard of this.

I think we're all just second guessing here, we don't really know the details of what SISU have done and no matter how stupid / incompetent people think they are I can't imagine they'd have taken this action without some legal advise and being pretty confident in what they are doing.

 

[theferret]

See ,this si where i don't get it ,I thought the Charge over RYton also resided in Arvo /CCFC LTD.

EDIT ;Apologies meant in response to Ferrets post.

That's a good point. Would be interesting to get that clarified.

 

[Diehard Si]

I think we're all just second guessing here, we don't really know the details of what SISU have done and no matter how stupid / incompetent people think they are I can't imagine they'd have taken this action without some legal advise and being pretty confident in what they are doing.

We'll see.

If, like I suspect, they have tried to transfer the 'football share' and other trading elements out to the 'holding' company, then they could be up the creek. The very name CCFC HOLDINGS, suggests this should be just that, while the subsidiary would be the trading company. They've moved it all up at some point, when I don't know. If years ago they might be ok. If it was in the last 12 months then it's going to be a bumpy ride.

 

[chiefdave]

We'll see.

If, like I suspect, they have tried to transfer the 'football share' and other trading elements out to the 'holding' company, then they could be up the creek. The very name CCFC HOLDINGS, suggests this should be just that, while the subsidiary would be the trading company. They've moved it all up at some point, when I don't know. If years ago they might be ok. If it was in the last 12 months then it's going to be a bumpy ride.

Wouldn't the FL have to authorise any transfer of the Golden Share or can SISU just do what they want with it?

 

[mattylad]

Who has stripped any assets? this is asset transfer and that is a lawful practice.

 

[Diehard Si]

Wouldn't the FL have to authorise any transfer of the Golden Share or can SISU just do what they want with it?

You would of thought they would.

But will the courts agree with it?

So many questions.

 

[wingy]

It was available. There was an offical CCFC forum in those days.

When SISU own our own ground and then sell it to make us homeless then I will.

To gain ownership would require them to part with some cash first.The old regime from back in the day arrived at Highfield rd incrementally through investment, it was then squandered by your mate.

Is their that much difference from him making us homeless to their action in trying to get the ground on the cheap having the same effect.It is certainly not about the level of rent or F+B etc.

 

[hutch1972]

Wouldn't the FL have to authorise any transfer of the Golden Share or can SISU just do what they want with it?

My thoughts exactly. If the FL had any knowledge of the transfer then they cannot possibly sanction the club, HOWEVER if they didn't ...........

 

[Diehard Si]

@darryljoemurphy (Darryl Murphy)

"Am told if CCFC Ltd has moved assets to CCFC Holdings Ltd - it opens possibility club could be sued for 'sale undervalue' #skyblues"

 

[wingy]

We'll see.

If, like I suspect, they have tried to transfer the 'football share' and other trading elements out to the 'holding' company, then they could be up the creek. The very name CCFC HOLDINGS, suggests this should be just that, while the subsidiary would be the trading company. They've moved it all up at some point, when I don't know. If years ago they might be ok. If it was in the last 12 months then it's going to be a bumpy ride.

Maybe at the point it got too hot for John Clark??

 

[Ashdown1]

What they have done is not illegal in the eyes of the law { although the football league may see it otherwise} but to me its just completely unethical and abhorrent. It happens in business every day and gives crooks and fraudsters an easy way out of not paying their creditors !