Embedded Files
Mandatory Statutory and Insurance Notification to
William Neale Bussey Mazars LLP 14 April 2020
Mandatory Statutory and Insurance Notification to
William Neale Bussey Mazars LLP 30 April 2020 (1/4)
Mandatory Statutory and Insurance Notification to
William Neale Bussey Mazars LLP 30 April 2020 (2/4)
Mandatory Statutory and Insurance Notification to
William Neale Bussey Mazars LLP 30 April 2020 (3/4)
Mandatory Statutory and Insurance Notification to
William Neale Bussey Mazars LLP 30 April 2020 (4/4)
!4 April 2020 William Neale Bussey Mazars LLP re 25 February 2020
unofficial transcription of the above provided for convenience of insurers and expeditious claims handling -
heard 22 December 2014 Andrews LJ (QBD); Newey LJ (Chancery). No further hearing required.
Referred by Admin Court QBD to HMCTS Security to Met Police April 2015 after referral by SCCO to HMCTS Security July 2012 and referral by HMCTS Security to Met Police 28 March 2013 and from Met to City same day.
Followed City of London police returning papers and evidence relevant to hearing of Appeal permission (for which was granted on 18 February 2010) to Court of Appeal in April 2012. These had been stolen from the Court of Appeal in September 2011 and posted out in the Royal Mail in two large envelopes.
This event occurred after associates revealed that on 5 March 2010 Catherine Elford/Kewish RPC/BDO had paid £200 to infiltrate an Appeal filed in August 2009 by the family of the late Siham Sami Raouf Order of the Republic, against the activities of Markel with Travelers, using stolen DTI files belonging to Triad Group Plc and its officers who had prepared them with the help of teams from Ernst & Young, PKF (trading as "BDO" from 2013), Egan Roberts.
In 2007, SFO asked "why have not the Baker Tilly partners reported on PwC?". John Weatherill head of disciplinary ICAEW informed that unless MM obtained the answer she would be disciplined, because Chartered Accountants are relied on by the authorities and the courts, regardless of whether paid or not or what retaliation they faced.
ICAEW informed in May 2011 that the BT partners had been sanctioned by exclusion with effect from 7 January 2005, those on ICAEW council informing that BetOnSports was the reason and that the partners were on notice that if they proceeded to use AIM to commission US or other offences, they would forfeit their membership severally.
The partners were exploiting the fact that the UK does not have a state register of statutory auditors required by EU directive from 1884. Accordingly they were able to carry on regardless. Markel were notified by Kingston Smith mid 2010; by MM May 2011; by PKF Littlejohn re IPA, which does not survive from 31 December 2013 balance sheet (FRP self-certification date). FRP hid the identity of its PI insurer from notice to them by 22 January 2014 via broker.
MM: Your firm's name only became public after trading started on 6th March when the admission document was public.
So that's my apology. I'd have made contact earlier had I'd known that you had become the statutory auditor of FRP Advisory LLP.
I've got a long-standing relationship with Cenkos Securities that comes from the fact that their sales team moved over from Evolution, which used to be Beeson Gregory. We floated two public companies as principal investors. Vega Group plc in the early nineties on the main market with Beeson Gregory. Triad Group plc in March, 1996. So that's how I know them, and I've stayed in touch with them over the years.
In 2013, if you remember, RSM Tenon was brought down in a so-called “pre-pack” using Deloitte.
I'm the principal who's interested in that transaction because I made the subject to contract offer to buy RSM Tenon to the Deloitte three administrators.
Are you familiar with the reconstruction industry?
NB, Mazars: I may have come across it now and again.
MM: Okay. So do you know about the bonds and the bonding system?
NB, Mazars: No. Tell me about them....
MM:Just getting back to the Insolvency Act 1995 and 1996, are you aware that they are not proper law and they don't actually exist?
NB, Mazars: No
MM: Right.
MM: Okay, well in this country, there is the 1965 Law Commissioners Act, which says that all legislation with which it is concerned ie apart from things to do with national security, must pass through the Law Commissioners. That relates to repeals, new laws or consolidation. That's quite important because, when you're creating something which is new, you have to repeal bits of the old. Then when you put it together and consolidate it, you have to make sure it still works and still hangs.
The Law Commissioners were not involved in any of that activity.
I was going through my articles at the time, so, I mean I was trained on the old law, so obviously when I looked at the stuff which was coming out new, I looked at it with a fundamental understanding which I was brought up with, which is that you need to have an 'act of bankruptcy' in order that you could trigger the protections. So I've always gone to the fundamentals, but coming out of that, was rather unfortunate jargon like 'insolvency practitioners' and the world of chartered accountants...are you a chartered accountant?
NB, Mazars: Yes
MM: Good. That's a relief. In the world of chartered accountants they couldn't let go of the amount of money that's being made in that industry. They wanted to make sure that they could capture it and keep it for themselves. They tried to turn it into a profession, liquidators, receivers and all the rest of it.
One of the things that crept into this so-called law was the notion of having a surety. It was said in the Kenneth Cork report at the time 1981, 1982, which everyone said was an epic work, it said in there that, if you are going to have a surety and security, then it has to be defined in the legislation. It never actually happened.
From 1980 there were attempts to privatise the Official Receiver. There's a Green Paper which became public in the middle of 2011 after thirty years. It's a very interesting paper because it actually says how they were trying to privatise the Official Receiver.
Then there was the DTI White Paper of 1984 making a public statement saying we don't want to privatise them. So that's the kind of intellectual genesis of it.
But what happens in practice is that so long as these numbered individuals.... So one feature of this non-law is that you have to be an individual.
An individual means a sole trader who's got their own VAT registration and they've got no capacity to do something like employing people or hiring solicitors.
It's an offence not to be an individual, an individual is characterised by their own VAT return, assuming they're turning over enough.
What happened was the government gave them numbers. You can see that there's a register of them. You can't actually get a print-out of all the people who are on the register but you can look up an individual one. Once they come off then they disappear so you can't get their history.
Essentially by having this number in practice they're using it as a surrogate for getting proper VAT registration as an individual.
What they're able to do is that they can requisition cheques from the Paymaster General and they can determine who that cheque is paid to. It comes out written by the Paymaster General from the government account. The requisition itself, once it has been implemented, the requisition document is destroyed and there's no trace of it.
The cheque itself is sent by post with a complement slip to the person who made the requisition.
Up until 2007 this state bank account was with the Bank of England. It was then transferred to NatWest, which became Royal Bank of Scotland.
I found out these details, when I had to find out about these bonds because the three IPs from Deloitte were using them essentially against me. When you've bought these bonds - the way the scheme works is that it was introduced in…. they are called “schemes”..... in a set of rules that came out in 2005.
They are stated to pay out on the fraud or dishonesty of the individual with the collusion of others or third parties with the named individual's connivance.
What you have to do is to buy one of these. If you buy these and you log them either with the ACCA, or the IPA, or with our Institute, or with ICAS, then as a practical matter, the crime teams of the state that used to be the DTI that went into BIS and then went into the Insolvency Service just a few years ago, they will not prosecute you.
The amount of value of these instruments is a default number. It can be £2 million, it can be £5 million. Then doing what's called “self-certification”, which means that you commit to a transaction. Then the following month, by the 20th of the month, you notify the person who is the broker and wrapperer of the instrument of the commitment that's been made.
It's quite heavily done because the books and records of the obligations which are being taken on of the surety, Royal and Sun Alliance was the main one from the end of 1995 through to 2016 onwards, they don't keep their own books and records, so it's off balance sheet to them. The person wrappering the instrument keeps the books and records. It is their task to make sure that those who are entitled never actually get the pay-out.
Because what happens when you get the pay-out is that the pay-out triggers what's called the “enabling bond” being switched off and the operator doesn't operate anymore.
So the main task really is to keep the scheme secret, and to sell it to the outside world that this industry is very reputable and very respectable.
You can get an individual whose got what they term 'sticky fingers' and, if that's the case, then the industry as a whole will replace him by somebody else. He will get struck off potentially if there's a complaint made against him, but nobody needs to worry because the pot will be replenished by the replacement person making a call on this instrument and carrying on as if nothing happened.
So therefore it's the collective which is saying "we're all good eggs together". That allows people who are not chartered accountants, to effectively piggy-back on chartered accountants and chartered accountants to be able to keep control over that whole industry.
When they enter into one of these transactions, the moment they reach the end point, assuming you haven't curtailed them in advance by getting the pay-out, then they walk off, and that's what leaves absolute chaos. That includes sticking in situ while all these intermediaries are blocking you from getting the pay-out until the end point when a death certificate comes out. That's what's happened in my case.
NB, Mazars: How does that impact FRP?
Well FRP are the perpetrators. I don't know how much of their history that you've gone into. Have you checked them out from inception?
NB, Mazars: No, not from inception......
MM: Okay. Well you can go back to Vantis and you can go back to Numerica. As you know it was BDO Stoy who resigned as being the auditor of the Numerica because they had an interest in the transaction and then I think Ernst and Young took it on.
Vantis was obviously trading bust but just getting over and over bloated. It had collapsed really by 2007/8, although by 2009 it was beyond gone.
It formally was churned over by FTI, the Americans, in June 2010 and it was resurrected. The industry was very cross because they said we didn't really have a go at getting it.
That's why they are super cross with me, because I made this bid for RSM Tenon and it carried on and it's one of these constructs. It's called an 'alternative business structure'. Have you come across one of those?
NB, Mazars: Yep.
MM: So that particular one is the brain-child of Nicholas Carter-Pegg. You'll find Jeremy Black is doing the same thing in Deloittes. So that's how it carried on from then.
But in essence, it's an off-balance sheet construct of Lloyds Bank.
You'll see that when Shendish came in, which is the corporate partner of FRP in 2013, they are using that age-old device of void accounting periods. So, that way the accumulated liabilities brought forward, up to the start of the void period, essentially drop out of account because you then have a void period of account.
Therefore, the new period of account, after the void, starts with the end of the void period. And so basically, you're burying your historic liabilities. That happened in 2013.
Nick Carter-Pegg was signing off, he prepared the Shendish accounts and he doubled up as the auditor of FRP Advisory LLP. He had this void period which killed off the past. And the idea was that you would have six years '14, '15, '16, '17, '18, '19, the period of the statute of limitation, to be able to block the claims against Deloittes. Then they got their pay-off and exit by dumping on the market at the beginning of 2020, unfortunately, including to Liontrust, which is one of my principal investors in Triad Group Plc.
So that sort of brings it up to date. And the specifics is that RSM Tenon and Premier Strategies, they went down on the 22nd of August, 2013, so that wasn't the corporate coming down that was a de-listing. So it's a bit of a nothing. I put my objections in before midnight to the three Deloitte people, which was the 22nd of August. And the reasons for my objections was that it was supposed to be a pre-pack for the Baker Tilly Partners. Baker Tilly Partners, I think you probably know are bust. Were you aware of that?
NB, Mazars: No. I didn't know that.
MM: Right.
They owe me £200 million from 2012. They were doing this void trick as well when they attempted to incorporate and get rid of their past, and they were trying go around a second time as RSM Tenon, and what they did with my claim form against them, which was served first on Kingston Smith, their auditor, and then on them, because they were bust obviously.
So I had to go to the statutory auditor first, in August, 2012. They ensured that the people inside the court did the court file in a false name, 'MM against Rider 1', instead of the 18 LLPs and corporates, and they hid it in the basement and it's supposed to be available on public inspection. They didn't do a reply to it at all.
I entered default judgment against them obviously, and they were set to turn up for means testing in 2012 and didn't turn up. Master Leslie in the Queen's Bench found it in the basement in November 2014. FRP was hired by Reynolds Porter Chamberlain who are working for the Baker Tilly partners in these transactions.
So the way these instruments work is that FRP has a default amount of £2 million for each instrument. KPMG have £5 million. They are bonded with AXA, and the insurer is Aon for their professional negligence. Theirs are £5 million, so I'm presuming that the Deloittes ones are £5 million as well. They go by number of practitioners and number of corporates.
So there are six bonds and the scheme operators, the instruments, once you are at £5 million or more, then you must make a proposal to the surety. FRP was bonded with RSA Willis, the same as the three Deloitte IPs. There were two companies, Premier Strategies and RSM Tenon. Three Deloitte IPs, that's six bonds. That's probably about £30 million.
Then FRP bought a seventh bond this time using my name in December '13 and then another one with RSA Willis, on the 1st of April 2014, and another one in September '14 with Aviva JLT.
I'm giving you a lot of information. Tell me if you get into overload.
NB, Mazars: I'm trying to keep up, doing my best to keep up!
MM: Okay. So, according to the instrument rules, that one which they bought in December '13 broke the instrument rules because it says after £5 million, you have to make a proposal and they didn't do that. They should have because they were using people who are IPA registered as opposed to Institute registered in order to create a separation with the Institute, because obviously the Institute would have just added all these bonds together.
They used the IPA and used somebody who is IPA but not the Institute. That is the liability of the IPA because one of their members was breaking the rules, which is a problem for their December '13 accounts, which is why it had to be reported to PKF Littlejohn who resigned, but too late. So the IPA effectively goes down with effect from 2013.
You will find that when I did my evidence to the FRC on 'Audit Enforcement' in May 2016 which was on their website from May 2016 right up until just before the float of FRP when, surprise, surprise, they took it down so that nobody sees it including the NOMAD.
I had written about "'the rise and fall of the Farringdon Bond' (which ended in September '13) and the IPA is a matter for the National Archives, Crown Copyright".
What happened in 2013 was the Farringdon Insurance Company in Guernsey withdrew, leaving RSA with no choice but to also withdraw. So what they did is that they leaked the information to the industry and said we're exiting. So Willis and others said, "okay, we will facilitate the run-off".
But of course if what you're carrying is historic liabilities, because the surety is jointly and severally liable with the individuals. So you can't exit your own offending history.
It's very serious for the surety because, as I said, they don't have any of the documents and records.
By that stage, RSA had moved from Deloitte as an auditor, the risk was shifted to KPMG, and Stuart Crispin who is the audit partner of RSA confirmed to me that he didn't know anything about these schemes.
So the analysis concerning KPMG and the fact that the Willis records on the administration of this scheme, supposedly in Guernsey with no method for RSA to be able to get them, that evidence is up on my website. It's dated October '15 and we gave it to the National Audit Office in May '16 and the Justice Select Committee in January '19. So these things are on a website.
So there is technical complexity in people trying to exit.
So what they did (because you can't exit your past and you can't have a run-off because it is your own past) is that they tried to parallel run. People who were bonded, bonded in parallel with others: the idea being that over time, new projects and new jobs would be with the new sureties and therefore it's a bit like the tide, the old ones could then go out with the sunset. Willis themselves which merged with Tower without revealing their exposures and liabilities, they themselves have exited. Jardine Lloyd Thompson has been taken over, but JLT Speciality has stopped that line of business. So that was how everybody was exiting and doing a runner.
French Family (French Rowley Partners "FRP")
Jeremy French (ICAEW) and cousin Paul Atkinson (IPA)
1889 Edward French (Senior)
1912 Edward French (Junior)
1919 Arthur French
1946 Lesley Dorothy French (mother of Paul Atkinson)
1958 Jeremy French (cousin of Lesley Dorothy French)
Back of each certificate issued 9th July 2020
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