Crédit Agricole finance
subsidiary major creditor in alleged asset-stripped
company
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Boston & Maine, which in the past has had
links with leasing in the UK, is no stranger to the Serious Fraud
Office (SFO).
The company – which according to its
literature specialises in ‘business development including mergers,
acquisitions, corporate restructures, leasing and funding’ – became
the subject of an ongoing investigation by the SFO exactly a year
ago after a number of leasing companies gathered evidence against
the Staffordshire-based company, it is understood.
Fraud officers investigating allegations that
Boston carried out asset stripping, have arrested three men and a
woman in connection with the case, all of whom have been released
without charge on police bail. The UK government has also been
investigating the company for almost 18 months, also for alleged
asset stripping.
The background to all this is that Boston
acted as advisers in the acquisition of a number of transport
companies by rival firms.
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By GlobalDataIn many cases, these firms, prior to the
mergers, had received significant sums in finance from an array of
companies. Following the mergers, it is alleged, these financed
assets were stripped from the transport companies.
The investigation started after the finance
companies became aware – according to a Leasing Life
source – that there were “some people going around buying companies
and financing them on the back of the assets that the companies
had”.
The finance companies, the source added,
initially thought they were lending to firms with strong assets,
and only later realised that new directors had actually come in and
they were just running the companies down and assets were
disappearing.
It is also believed the finance companies
would sometimes recognise the names of the customers from previous
good credit history, and therefore they would lend to them not
realising that there had been changes in the ownership of the
company.
In one case, Boston is connected with the
buyout last year of haulier Barnes & Tipping (B&T) by a
Northern Ireland-based haulage firm, Tinnelly International
Transport for £2.6 million.
It is understood that Regal, which bought
B&T on behalf of Tinnelly, used B&T’s own assets to finance
the purchase.
Prior to the buyout, which involved Boston
acting as advisers for Tinnelly, Eurofactor, the Crédit Agricole
subsidiary that specialises in invoice discounting, factoring and
asset-based lending, provided an invoice discounting facility to
B&T.
In February this year – several months after
the SFO launched its investigation along with West Midlands Police
– however, Tinnelly went into a pre-pack administration, and
B&T followed suit a few weeks later.
Eurofactor, a major creditor of the defunct
B&T, applied for the haulier to enter administration.
No one from Boston has returned calls to
comment about the situation.
