Beleaguered property consultant Erinaceous has outraged its subcontractors by telling them they must pay to stay on their supply chain.
The company, which has been plagued by senior departures and heavy losses, has emailed its subcontractors asking them to fill in a questionnaire to enable it to “know more about its supply chain” and confirm its preferred suppliers.
The email states that a “membership fee” of £100, plus VAT, is necessary to “cover administration costs”, and will be payable on receipt of answers to an online questionnaire.
The message states that “once completed and returned online, you will receive an email from us outlining the payment methods”.
The email was dispatched last Wednesday by Wayne Wilson, an employee in the group’s procurement department. It is understood to have been sent to the entire supply chain of Erinaceous Managed Services, which includes building contractors on its maintenance and refurbishment projects.
The email says that this part of the supply chain accounts for 60% of the overall spend of the Erinaceous group.
One subcontractor, who did not wish to be named, said: “This is ridiculous. I have never been asked to pay to be on anyone’s supply chain – let alone a company with Erinaceous’ problems. They want us to subsidise them, and it’s not going to happen.”
The consultant recently revealed itself to be on the brink of financial ruin with losses of £3.1m for the six months to June after an acquisition spree during which it bought more than half a dozen companies, including consultants Nolan Associates and Dearle & Henderson.
Neil Bellis, the chief executive, and Lucy Cummings, the chief operating officer, left last month, receiving a £736,000 pay-off as part of a restructure.
The consultant will now be split into two, with professional services and management services under the banner NAI capital UK as a semi-autonomous company.
The Erinaceous name will be retained under the new divisions Erinaceous Residential Management and Erinaceous Property Maintenance.
An Erinaceous spokesperson said: “This is a commercial move by the company to rationalise an untenable supply chain in excess of 15,000 companies to 500.”
It emerged this week that Six Erinaceous employees have defected to property agent Savills. And Stephen Armitage, the former executive director of Dunlop Hawyard, which was bought by Erinaceous in 2005, has quit the company to join industrial developer Brixton.
For more on Erinaceous go to www.building.co.uk/archive