CROYDON IN CRISIS: Valo Smart City has racked up £1m debts, attracted at least four County Court Judgements and is now cancelling contracts with its suppliers. But after waiting nearly three years for the company to deliver their ‘smart’ bus shelters, Croydon Council has failed to take any action for breach of contract. EXCLUSIVE by STEVEN DOWNES
Better make sure you have a decent umbrella or raincoat if you are thinking of travelling by bus around Croydon any time over the next year.
Because there’s no prospect of any of the council’s long-promised “smart” bus shelters being installed around our borough any time soon.
In 2021, Croydon Council entered into a deal with a company that promised to provide 185 bus shelters which would be fitted with all the latest bells and whistles, and wifi, that modern technology has to offer, while paying the cash-strapped local authority more than £600,000 per year over a 10-year contract from advertising revenues generated from the shelter sites.
It all sounded too good to be true.
The deal between Croydon and Valo Smart City UK Ltd was one of the first commercial agreements for the council under its then-new chief executive, Katherine Kerswell.
Contract signed, all the existing (low-tech but windproof and rainproof) bus shelters under Croydon Council’s control were promptly removed. And since when… nuffink.
Inside Croydon can reveal that the company making the big promises now faces even bigger problems than a year ago, with two more County Court Judgements for unpaid debts, plus a Companies House warning for being late filing their annual accounts and an accumulated £1million-worth of debts and liabilities.
The company’s only employee left Valo Smart City in June, alleging that they had gone months without being paid their wages.
The company’s founder, Isaac Sutton, has meanwhile got himself in hot water in his native United States with the powerful Securities and Exchange Commission over a dodgy shares deal for a company peddling even dodgier anti-covid equipment.
Back in Croydon in March this year, Jason Perry, the Tory Mayor, told a Town Hall meeting that the council would be taking “legal recourse” against Valo Smart City over the company’s failure to supply the promised bus shelters.
Then, last month, at a public meeting held in Norbury, Perry answered a question about the long-missing bus shelters by saying that no legal action would be taken against the suppliers, giving as a reason, “it would take at least 18 months for us to go through the whole procurement process again”.
Perry suggested that he actually believed that Valo Smart City, a company with no track record in the building of bus shelters or the sale of roadside advertising and which Companies House records show has liabilities of £1million, would actually deliver the long-awaited equipment.
There is a reason for this latest U-turn by Croydon’s piss-poor Mayor.
Investigations by this website have discovered that in August this year, Perry’s council entered into a settlement with Valo Smart Cities that undertook not to sue the company for breach of contract, in return for an immediate payment from Valo of £500,000.
Sources familiar with the arrangement have told Inside Croydon, “It’s ridiculous. Not a penny of that money has been paid to Croydon.
“Valo can’t… Valo doesn’t have any money. They only have debts – money owed to their suppliers, to their staff and contractors.”
One of those suppliers has told Inside Croydon that Valo terminated its contract with them last week. “It looks like the debacle of the Croydon bus shelters is at an end,” the supplier said.
“They currently owe us around £32,000, which I doubt we’ll ever see a penny of. They also haven’t paid their UK staff for months. Isaac Sutton is a con artist.”
The out-of-pocket supplier is London-based Digital Signs For Transport, a well-established firm that has been providing real-time passenger information boards around the capital’s rail stations and bus stops for a decade (Valo’s “smart” schtick was never original or unique, despite the sales pitch given by council director Opama Khan, who has been the leading advocate for the deal in Fisher’s Folly).
It was Digital Signs which took court action against Valo Smart City last year, with two separate County Court Judgements amounting to £31,800, as exclusively reported by Inside Croydon.
The judgements were issued against Valo Smart City in January and July 2022 for unpaid invoices.
A winding-up petition against Valo was dropped at the start of 2023, after Sutton intervened with promises to pay all the outstanding bills. He never did.
This year, there have been another two CCJs taken out against Valo Smart City (by an as-yet unidentified supplier), for a total of £27,726. These are publicly listed as having not been satisfied.
Insiders relate that Sutton has companies with smart technology interests in other countries, and with similar failures to deliver. In Dubai, where the authorities take an exceedingly dim view of such practice, it is estimated that his company’s liabilities could be 10 times greater than what he owes in Britain.
Sources claim that in the last week of September, Sutton held a meeting of Valo Smart Cities UK at which it was decided to abandon their Croydon interests.
“What I don’t understand,” said a source, “is how Croydon Council managed to go into business with someone like Sutton without doing any proper due diligence on his conduct in the United States.”
Sutton’s questionable management of various companies, going back to 1995, have seen him attract the attention of the SEC more than once.
In his latest brush with the SEC, in May this year, he reached an out-of-court settlement with the US authorities after he was found to have been illegally “boostering” company stock values by issuing press releases for another company, Corporate Universe Inc, in which he claimed they were selling graphene face masks that were “scientifically proven to kill COVID-19”.
The SEC judgement (which can be seen in full here) goes a long way to justify any description of Sutton as a con man.
Chris Johns, a director at Digital Signs For Transport’, told Inside Croydon, “What galls me the most, more than the tens of thousands in unpaid invoices, is that after the huge amounts of innovation and effort our team applied to the project, Valo never got a single bus shelter live, not even in a test environment.
“This failure shows Valo never held a serious intent to deliver the project.
“While Isaac Sutton should be held personally accountable for the financial losses, it is the people of Croydon who will continue to suffer a poor experience when considering public transport due to the negligence of Valo Smart City.”
And, it would be fair to say, the negligence by Croydon Council’s directors and CEO in falling for a deal that always looked too good to be true.
Inside Croydon understands that there is an amount of money from Valo Smart City which has been placed in a special escrow account, to which the council may ultimately have access. But it is unlikely to compensate the bus passengers of the borough for being dicked about once again by their witless and gormless council through three long, cold and wet winters.
Inside Croydon invited Isaac Sutton’s English-based solicitor to comment on his client’s behalf, but had received no response by time of publication.
We also sent a set of questions to Stephen Lawrence-Orumwense, Croydon’s Borough Solicitor, who no doubt will have played a key role in the decision not to sue Valo Smart City UK. We asked whether he was now instigating legal action to recover the unpaid £500,000 – a “Full Negrini” as we like to call it – from Valo Smart City.
We also asked what action Mayor Perry is taking over the borderline incompetent conduct of the council directors responsible for procuring the “services” of Valo Smart City UK. Or, indeed, over the council CEO who gave final approval to this deal.
Guess what? We never got an answer. Just like Croydon never got its bus shelters, the promised £6.7million advertising revenues or share of the promised profits.
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