New allegations about council’s role in bus firm’s collapse

Glenn Ebrey, are you seated in your “Croydon” Sadvertiser office in Redhill?

Well done.

Off the buses: Rusking Private Hire were driven out of business, Private Eye alleges today

Off the buses: Ruskin Private Hire were driven out of business, Private Eye alleges today

Well done for standing up to the bully boys of business administrators FRP for refusing – so far any way – their legal demands that you hand over documents and the identities of sources of the recent report by the Sadvertiser’s Gareth Davies on the collapse of Ruskin Private Hire, the bus company which had contracts to transport hundreds of disabled Croydon school children but which went bust last month while claiming to be owed £2.5million by Croydon Council.

FRP Advisory are the administrators for Ruskin, and today’s Private Eye reports their role in the collapse of Ruskin Private Hire, and suggests that Croydon Council had a significant part to play in the closure of an otherwise flourishing business which employed more than 250 people.

The Eye has been on the case of Croydon’s dodgy bus contracts for more than four years, ever since it exposed the way in which Merton mini-cab firm Olympic South managed to obtain a £6.5 million schools special needs transport contract, despite not being the best bidders, nor even having properly licensed buses. But Olympic South did provide Boris Johnson with his campaign bus for his 2012 London Mayoral campaign …

Soon after Olympic South got its mitts on the Croydon special needs schools bus deal, they gave a £100,000 a year job to Michael Lawrence. Lawrence had previously worked as a transport advisor to Nathan Elvery, who was then the deputy CEO at Croydon Council. Elvery’s job had oversight of the bus contract tendering process.

It took until 2012 before Croydon Council investigated complaints – from council officers and councillors – about the awarding of the Olympic South contracts. An initial, internal investigation found nothing wrong. What a surprise!

But a second investigation, this time conducted by the District Auditor, found “significant weaknesses” in the tendering process.

Nathan Elvery: Croydon's interim CEO

Nathan Elvery: Croydon’s interim CEO

As Private Eye reports today, Croydon “… was forced to re-tender its special needs contracts. The hiatus meant that an honest bus firm that also worked with the council, Ruskin Private Hire, took a big financial hit. Ruskin claimed £2.5 million damages covered by indemnity clauses in its contract.”

It might be fair to assume that Elvery, through his responsibilities for the council’s finances at that time and his role in the council’s procurement policies, will have had some responsibility for the Ruskin contract. For the past year, Elvery has been the interim chief executive of Croydon Council.

The Eye reports today, “Croydon was advised by lawyers that Ruskin was entitled to the dosh, but it has never paid up…”

On Valentine’s Day, Ruskin was “put into administration at the behest of Peterborough-based Aldermore Bank,” Private Eye reports. “Ruskin had been under financial pressure from Aldermore, which had operated in a manner familiar to small-firm victims of RBS.”

According to the erstwhile owner of Ruskin, Rod Lynch, “The company has been brought down by clandestine actions of third parties.” Who could he mean? Which third parties might benefit if Ruskin no longer existed to continue to press its legal claim for £2.5million in compensation as provided for in its contract with Croydon Council?

Private Eye has a suggestion. “Ruskin’s creditors and former employees fear that Croydon has done a deal with Tony Wright, joint administrator from liquidator FRP Advisory, whereby the council will cough up enough to satisfy Aldermore and cover FRP’s costs, while the staff and small creditors can go whistle. A confidentiality agreement will ensure everything stays hushed up,” the magazine reports today.

The Eye has been keeping a watch on FRP’s activities for a few years now. “FRP, which works almost full-time for the bank, was founded in 2010 by former managers of the predatory accountancy firm Vantis, which went down amid accusations of tax fraud and ‘reprehensible conduct’ in its administration of Stanford International Bank.”

Stanford was notorious as the business run by “Sir” Allen Stanford, the American fraudster who offered ludicrous amounts of cash to the international cricket authorities to stage all-star Twenty 20 matches in Antigua, but who is now serving a 110-year jail sentence in the United States for his part in the $7 billion financial scam.

Private Eye todayPrivate Eye today makes new allegations over FRP’s role in the closure of Ruskin Private Hire.

In a statement to Croydon Council staff and councillors at the end of February, Paul Greenhalgh, the council’s director responsible for schools, said, “We were advised at the beginning of this week that Ruskin Private Hire had been placed in administration. Since then we have been in frequent contact with the administrators (FRP Advisory) and they had initially indicated that they were going to continue trading while seeking to sell Ruskin as a going concern…

“We were notified late yesterday evening that unfortunately no agreement had been reached with a prospective buyer and the business would close.”

Today’s Private Eye suggests that there was a willing buyer for Ruskin Private Hire. “Although the Danish multinational Falck was prepared to buy Ruskin, Wright [of FRP] would not give it 72 hours to finalise its bid.”

And thus Croydon Council is saved the thick end of a £2.5 million compensation bill caused by its own “significant weaknesses” in its tendering process.

How long the Redhill-based Sadvertiser (average weekly sale 9,582 in 2013, according to the Audit Bureau of Circulations) is able to hold out against FRP’s legal rottweilers will be watched with interest. We wish them good luck in the hope that they continue to do the right thing.

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