SOLAR FARM INVESTMENT BANKRUPTS THURROCK COUNCIL
Released On 16th Aug 2023
Thurrock Council has been effectively bankrupted after a local businessman convinced the local authority to invest tens of millions of pounds before going on a spending spree with the cash.
Liam Kavanagh persuaded Thurrock council to hand over the equivalent of almost its entire annual budget in an investment in his group of solar farms.
However, once he had the cash, Mr Kavanagh spent it on a country estate, a private jet, a luxury yacht and many other multi-million-pound purchases, such as a diamond-encrusted Hublot watch and a £2.3 million Bugatti.
According to Mr Kavanagh’s lawyers, all the payments were permissible, having been approved by the company’s finance team and auditor.
It would appear that the council believed it would get regular interest payments from the profits and that its cash would be safe because it was secured against the value of the solar farms.
However, the interest payments stopped after Mr Kavanagh wound up his companies, and the value of the solar farms is calculated to be less than the original estimates.
Administrators are now selling the solar farms, and Thurrock is facing a £200 million shortfall on the risky investment.
Mr Kavanagh, who no longer lives in the UK, denies misleading the council. He said his businesses were not responsible for the council’s investment decisions and asserted that the terms of the deal with the council meant his businesses were free to spend the money invested as they pleased.
Roger Isaacs, Forensic Partner at Milsted Langdon, said: “This case raises serious questions as to what due diligence Thurrock Council undertook and whether it obtained professional advice before making the investment decisions that it must now bitterly regret.
“The Administrators will inevitably be reviewing Mr Kavanagh’s conduct and undertaking a detailed forensic accountancy review of the company’s finances. However, even if they conclude that he acted improperly, the prospect of recovering assets from him is likely to be made more remote by virtue of the fact that he is no longer resident in the UK.”
