Statement to liquidator reveals catalogue of 'unprofessionalism'
Former Ward Evans director Alex Dawson has blamed poor financial results, lack of timely and accurate financial information, unprofessionalism and corporate largesse for the company's demise.
In a 15-page statement submitted to Ward Evans liquidator Ernst & Young, Dawson made a plea for mercy after suffering personal difficulties during the demise of the broker.
He also detailed the ups and downs of various businesses in the Ward Evans Group since he joined the company in 1996. He claimed Ward Evans Corporate's cash flow problems date back as far as 1997. Dawson wrote: "I was due a bonus of circa £12,200 as a result of my achievement, but was approached by Mike Kenney and asked if I would not claim this bonus to assist cash flow."
Dawson said the Inland Revenue launched an investigation during 2000 into the level of Kenney's business expenses. He said: "This resulted in a payment of circa £180,000 having to be made by the company to fund a bonus for Mike [Kenney] to pay his tax bill." He claims Inland Revenue investigations into all other directors were launched in December 2000.
Dawson said this was followed, in 2001, by a visit from Inland Revenue bailiffs "requesting outstanding payment of PAYE amounting to some £750,000". He wrote that he was led to understand that these payments had already been made.
Dawson said that in May 2001, a proposal to spend £150,000 on its sponsorship of the Ward Evans Atlantic Rowing Challenge was approved, despite exceeding the original budget for the event by £125,000.
He wrote: "Perhaps had I formally resigned from the business it would have brought about a shock to the culture that one of the brightest stars would walk away because the business was not being run as professionally as it needed to. "
A spokeswoman for Ernst & Young liquidator Charles King could not comment on Dawson's submission as she said investigations into Ward Evans were ongoing.
Dawson: confessions of a broker
"The business recruited directors who were unqualified to perform the tasks required and there was a reluctance for the business to be run 'formally'."
"The boards were not truly democratic and the expenses and salaries paid meant that we were always firefighting on cash and not looking to the future."
"The absence of formal board meetings and the practically [sic] missing role of company secretary compounded our problems and meant wrong decisions were often made."
"The stress of the last five months was finally getting the better of me personally...I blacked out on three occasions and felt I had to visit the doctor. He prescribed beta blockers and sleeping pills as I had not slept for 11 days."
"The issues of friendships have too often overshadowed some of the tough decisions that should have been made."
"Significant tax levies, the Atlantic Rowing Challenge and a lifestyle business all played a part in draining the company of resources."