Administrators find 50,000 missing invoices from suppliers and say there’s only £600,000 to pay unsecured creditors
Connaught’s debts could be as much as £100m after administrators found 50,000 unaccounted for invoices.
According to a report in the Financial Times, KPMG has said it had believed the social housing arm of Connaught owed £46m but that the discovery of suppliers’ invoices means that figure could more than double.
The paper quotes David Costley-Wood, joint administrator and restructuring partner at KPMG, as saying: “We were surprised at the level of backlog of invoices that had not been processed for a listed company.”
KPMG’s has also found out that there is only £600,000 available to the unsecured creditors, which means they could receive less than one penny in every pound.
The administrators have also said that the company’s employee records were “unreliable and in a poor state”.
Costley-Wood said: “Relative to its size, it’s one of the worst payroll records I’ve seen in 20 years.”
Connaught issued a profit warning back in June blaming public sector cuts for its woes, and in July its RBS-led backers provided short-term funding of £15m to tide it over.
It fell into administration two months ago after its banks rejected a three-year rescue plan that required a £50m cash injection.