|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||


The Analysis News & Opinions


Courts shut down rogue volume IVA


A volume Individual Voluntary Arrangement (IVA) provider wound-up, along with three connected companies, protecting people in debt from further harm after the companies abused millions of customers’ payments. Vanguard Insolvency Practitioners Limited, MDN Consultancy Limited, Newtco Limited and KIS Financial Consultancy Limited were wound-up in the public interest on 12 May 2022 at the High Court in Manchester before His Honour Judge Hodge. Petitions were submitted to the court by the


Insolvency Service, on behalf the Secretary of State for Business, Energy and Industri- al Strategy. The Offi cial Receiver has been appointed liquidator of the companies. The court heard that Vanguard was a


‘volume’ IVA provider that enabled people in debt to come to an arrangement with their creditors to pay all or part of their debts. Vanguard charged customers a fee for their arrangements, which were


facilitating


supervised by Vanguard’s licensed insolvency practitioner.


Following complaints about


Vanguard’s practices, however, the Insolvency Service launched confi dential enquiries before investigators uncovered serial abuse of the payments made by Vanguard’s customers. Vanguard traded from 2016 and used


third-party suppliers to help administer the IVAs and realise debtors’ assets. By April 2020 Vanguard had more than 14,000 IVA cases under its management. Investigators found that between August


2018 and June 2020, Vanguard made pay- ments to various third-party suppliers totalling almost £9m from their customers’ estates un- der the guise of expenses or disbursements. Some of the third-parties under a fee sharing


arrangement would then make payments to MDN Consultancy and KIS Financial Consultancy, who were connected to Vanguard through close personal or family relationships. Further


enquiries discovered Vanguard’s


licensed insolvency practitioner, responsible for overseeing the IVAs, did not properly explain to customers what their fees were being used for. Investigators concluded that Vanguard’s practices lacked transparency as did activities of its licensed insolvency practitioner.


May 2022


The winding-up proceedings were initially defended by Vanguard and the connected fi rms. But before trial, the four companies confi rmed they would not oppose proceedings without making any admissions. At trial, the court was content to wind-up the companies. The judge said it was of particular concern


that the director of Vanguard seemed incapable of seeing anything wrong in the company’s failure to disclose to creditors and debtors the mechanism that was used to pay money from the IVA estates, eff ectively for the benefi t of himself and his companies. Claire


Entwistle, assistant director of


investigation and enforcement services for the Insolvency Service, said: “Following a complex and lengthy investigation, the court recognised the severity of Vanguard and the connected companies’ activities


before closing them


down for good. “This sends a strong message to volume IVA


providers that if they do not deal with their cases properly and there is evidence of abuse, we will take strong action to protect customers and stop them.” The winding-up petitions have not aff ected


the position of any of the IVAs previously under Vanguard’s control. These have been taken on by another provider and consumers should continue to make payments in accord- ance with the terms of their agreement. Any customers who are concerned should get in touch with their IVA provider in the usual way. The


government recently consulted on


making changes to the insolvency practitioner regulatory regime, including whether fi rms off ering insolvency services should be subject to regulation, and will be issuing its response in due course.


www.CCRMagazine.com Opinion


Businesses brace for impact but are better prepared


Middle-market fi rms face an increasingly challenging


outlook. The Russian invasion


of Ukraine has dramatically increased the scarcity and prices of a broad range of commodities, from oil to wheat, and that is driving up costs. Restrictions on exports from Russia and


coronavirus-related shutdowns in China risk sparking another supply-chain crisis before the economy has recovered from the last one. As a result, instead of marking a return to


normality after the challenges of the pandemic, 2022 is likely to be another challenging year for the middle market. The RSM UK SCI rebounded strongly in Q1, rising another 30%, driven by retailers restocking. However, the index is still 1.8 standard deviations below long-term normal conditions. It is a sign that, while conditions are improving, supply chains are still under a signifi cant amount of stress. What is more, with the preliminary reading


for April suggesting supply-chain pressures are starting to build again as the impact of the war in Ukraine and coronavirus-related lockdowns in China start to bite, we expect the SCI to fall sharply over the summer. Admittedly, there is little sign in the offi cial


data that either the war in Ukraine or the lockdowns in China are having a major impact yet. The UK imported more from both Russia and China in March than it did in February and the volume of shipping containers travelling from China to Europe and the US rose in March. March was probably too soon to see the impact of major geopolitical events. After all, Shanghai did not go into a full lockdown until the start of April. The preliminary RSM SCI reading for April, which relies on more timely data, has dipped to two standard deviations below normal indicating that supply chain conditions are worsening.


Thomas Pugh Economist, RSM UK


7


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52