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More than £1m of unexplained transactions were transferred in to Post Office profit at the height of the Horizon scandal, leaked documents have showed.

The papers seen by Sky News show a snapshot of transfers from a Post Office “miscellaneous client” suspense account over a four year period, up to 2014.

A suspense account is where unexplained, or disputed, transactions remain until they are able to be “reconciled”.

Unaccounted-for transactions were transferred out of the Post Office suspense account and into their Profit and Loss account after three years.

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Ian Henderson, director of Second Sight – the forensic accountants hired years ago by Post Office – said: “The Post Office was not printing money. It was accumulating funds in its suspense account.

“Those funds belong to somebody, either to third party clients or to sub-postmasters, and part of the work we were doing in 2015 was drilling into that.”

Mr Henderson said they were sacked not long after asking questions about whether Post Office profited from shortfalls paid for by sub-postmasters.

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Mr Henderson told Sky News that the money could potentially have come from sub-postmasters’ pockets

More than 900 sub-postmasters were wrongly prosecuted due to faults with Horizon accounting software.

A letter from Alisdair Cameron, the Post Office’s chief financial officer, to Second Sight in February 2015 states some “postings cannot be traced” to “underlying transactions”.

He added: “We are not always able to drill back from the combined totals to itemise all the underlying transactions.”

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‘Compensation paid by summer’

Mr Henderson said the letter shows that “the Post Office was benefiting from this uncertainty due to, frankly, bad record keeping, but taking it to the benefit of their Profit and Loss account.”

He maintains that it’s impossible to prove for sure that sub-postmasters’ money went into Post Office profit because of a “lack of granularity”.

He says therefore that it is of “sufficient public interest” that a further independent review into the use of suspense accounts should happen.

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Mr Henderson added: “It didn’t come from thin air, where did the money come from? That’s a fundamental question Post Office have not answered.”

Meanwhile, separately, a secret recording obtained by Sky News indicates that Post Office was trying to gag the independent forensic accountants.

The recording is of a meeting in January 2014 between Second Sight, a lawyer and a Post Office representative.

It took place over a year before the accountants were sacked.

In the conference call there are signs the relationship between Post Office and Second Sight was beginning to weaken.

There is discussion about a contractual confidentiality agreement, a “Letter of Engagement” between the parties.

In the recording Ian Henderson says: “Either, you know, we have unfettered discretion and authorisation to just talk to MPs or we haven’t.

“At the moment, the way the document is drafted, we are prevented from doing that. That’s the issue.”

His colleague at Second Sight, Ron Warmington is heard agreeing.

In another part of the recording there are more concerns raised that the investigators are being blocked from talking to MPs.

Mr Henderson says: “My point is we should not be gagging either the applicant or Second Sight in being able to respond, you know, fully and frankly to MPs who frankly sort of set this whole process in motion.”

The Post Office representative replies saying they’re not trying to gag anybody.

Mr Henderson describes “a point of principle”: “In exactly the same way that when we were doing spot reviews, we disclosed to MPs, when they asked us a specific question, the information provided to us by Fujitsu and by Post Office.

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“And that’s why it’s so important to establish this principle that there should be no gagging of Second Sight in relation to being able to discuss our investigative work with MPs.”

In the same meeting his colleague Ron Warmington said that if it later emerges that Second Sight have been “effectively gagged” in its dealing with MPs, “it’s not going to be Second Sight they are particularly annoyed with, it’s going to be Post Office.”

The representative responds directly with: “I think that’s something that the Post Office will have to deal with if – if it arises.”

Adding that “some of the terminology in terms of gagging is probably an exaggeration of what it is that is trying to be done here, and at the moment you haven’t signed anything.”

Post Office released a statement in response to the findings: “The statutory public inquiry, chaired by a judge with the power to question witnesses under oath, is the best forum to examine the issues raised by this evidence.

“We continue to remain fully focused on supporting the inquiry get to the truth of what happened and accountability for that.”

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Bidders off starting grid in race for go-karting group TeamSport

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Bidders off starting grid in race for go-karting group TeamSport

A pack of private equity investors have left the starting grid in a race to buy TeamSport, the pan-European go-karting operator.

Sky News has learnt that several buyout firms have tabled initial offers for the company, which is expected to fetch more than £150m.

Insiders said on Sunday that EMK Capital and Livingbridge were among the private equity firms which had lodged first-round bids.

TeamSport is owned by Duke Street, one of the UK’s best-known buyout firms and the former owner of Wagamama, and is the largest indoor go-karting operator in the country.

Harris Williams, the investment bank, is overseeing the auction.

TeamSport trades from 35 sites in the UK, three in Germany and two in the Netherlands.

It operates within an activities & attractions market worth £73bn across the three countries.

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Industry sources said that the company’s suitors had been attracted by the potential to grow it to 200 sites across its existing markets alone.

3i, the London-listed group, also showed an interest in buying TeamSport but is no longer involved, according to a person close to it.

All of the parties contacted by Sky News declined to comment.

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Blackstone tunes up £1.2bn bid for Blondie music owner Hipgnosis

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Blackstone tunes up £1.2bn bid for Blondie music owner Hipgnosis

The private equity titan Blackstone is this weekend drawing up plans for a £1.2bn takeover bid for the owner of songs performed by Blondie, the Kaiser Chiefs and the Red Hot Chili Peppers.

Sky News can exclusively reveal that Blackstone has already tabled several offers to buy Hipgnosis Songs Fund (HSF), the London-listed music rights investment company.

The first was worth 82p-a-share, insiders said, while another was pitched at 88p and the most recent was worth marginally less than a 93.2p-a-share bid for HSF unveiled on Thursday from Concord Chorus, a music and theatrical rights company.

Sources said that Blackstone, which is being advised by investment bankers at Jefferies, was now considering making a higher offer for HSF, which trades on the London Stock Exchange under the ticker SONG.

One added that Blackstone had been “surprised” by the announcement this week that SONG’s board had recommended the bid from Concord Chorus – which is backed by Apollo Global Management – given its own ongoing conversations about an offer.

The person also questioned HSF’s decision to recommend a proposal “at the start of a bidding war, without attempting to extract greater value for shareholders”.

A source close to HSF disputed that characterisation.

A takeover of the company would crystallise value for Hipgnosis shareholders, who saw the shares slump to a record low in March of about 56p in the wake of a reduction in the value of its portfolio and a suspension of dividend payments.

HSF’s troubles have been played out for months in the public arena, culminating last October in a decision by shareholders to reject its board’s goal of securing their backing for its continuation.

Shakira performs with Bizarrap during the the first weekend of the Coachella Music and Arts Festival at the Empire Polo Club on Friday, April 12, 2024, in Indio, Calif. (Photo by Amy Harris/Invision/AP)
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Shakira. Pic: Amy Harris/Invision/AP

The company has been mired in bitter recriminations and legal arguments over its performance and governance.

A review conducted by Shot Tower Capital, a specialist adviser, concluded in March that SONG’s assets were worth a fifth less than Hipgnosis Song Management (HSM), its investment adviser, had reported last September.

Blackstone is already deeply immersed in HSF’s future because it owns a 51% stake in HSM, which has a contract to manage the SONG assets.

If HSM agreed to terminate the contract between them, it would release up to $25m for HSF although analysts say it is unclear why HSM would willingly forego any cash it believes is owed to it.

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One of the obstacles facing Blackstone in any new offer lies in the fact that the SONG board has received irrevocable acceptances of the Concord Chorus bid from over 23% of shareholders.

Those only fall away in the event that a rival bidder tables an offer worth at least 10% more – in this case over 102p-a-share.

However, HSM also has a call option in its management agreement with HSF which allows it to acquire the portfolio of music assets even if Concord Chorus is successful, at the same price it pays.

The call option is understood to evaporate if the management contract is terminated for cause.

The legal disputes involving the companies, which insiders have left the situation finely balanced, with a possible compromise agreement between them also being floated by investors.

A source close to Blackstone said it was very confident in its contractual position.

Artists whose catalogues are owned by the listed company also include Neil Young and Mark Ronson.

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The remainder of HSM is owned by Merck Mercuriadis, a former manager of Beyonce and Sir Elton John, who launched Hipgnosis in 2018 with the aim of turning music royalties into a mainstream asset class.

He struck a $1bn deal three years later for Blackstone to provide firepower for buying music rights and managing catalogues.

Since then, some of the world’s most prominent financiers, including the likes of Apollo and KKR, have developed a similar appetite to buy into music assets.

In February, Mr Mercuriadis moved from becoming CEO of HSM to the chairman’s role, with Ben Katovsky taking over as CEO.

Sources emphasised on Saturday that Blackstone’s interest in acquiring HSF was on a standalone basis and was independent of Mr Mercuriadis.

That stance is likely to raise questions about the buyout giant’s ongoing relationship with the Hipgnosis founder.

Blackstone is one of the world’s most powerful investors, with hundreds of billions of dollars of ‘dry powder’ available for investment.

When its alliance with Mr Mercuriadis was unveiled two-and-a-half years ago, Qasim Abbas, a senior managing director in Blackstone’s tactical opportunities team, said: “This partnership underscores the long-term, sustainable value we see in creative content across the wider entertainment industry.

“The music industry has been at the forefront of the fast-growing streaming economy and is unlocking new ways of consuming content.”

Shares in HSF closed on Friday at 91.9p, giving it a market capitalisation of just over £1.1bn and marginally below the level of the recommended offer from Concord Chorus.

On Saturday, Blackstone and HSF both declined to comment.

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Grocery delivery app Getir prepares to exit UK market

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Grocery delivery app Getir prepares to exit UK market

Getir, the grocery delivery app once valued at nearly $12bn (£9.7bn), is close to pulling the plug on its operations in Britain in a move that would spark concerns for well over 1,000 jobs.

Sky News has learnt that Getir is preparing to announce next week that it is withdrawing from the three remaining European markets in which it operates: the UK, Germany and the Netherlands.

In total, thousands of jobs will be put at risk, including approximately 1,500 in the UK, according to people close to the situation.

The process through which Getir, which has a multimillion-pound commercial partnership with the Premier League’s Tottenham Hotspur, plans to exit the UK was unclear on Friday.

Insiders said, that it could involve a sale of its assets or an insolvency procedure although they added that no decisions had been taken.

Getir has previously denied that any form of insolvency was on the cards for the group or its subsidiaries.

The company is understood to have drafted in restructuring advisers in recent days, while Mubadala, the Abu Dhabi fund that is one of its biggest shareholders, is being advised by AlixPartners.

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Dejan Kulusevski of Tottenham Hotspur during trainin.
Pic: Alex Morton/Tottenham Hotspur FC/Shutterstock
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Getir sponsor Tottenham Hotspur’s training kit. Pic: Alex Morton/Tottenham Hotspur FC/Shutterstock

Getir’s plans to exit the UK and other markets will leave it with operations in the US and Turkey only.

Ultimately, it is expected to seek to operate solely in Turkey, where it was founded.

Meaning ‘to bring’ in Turkish, Getir expanded at breakneck speed to become of the world’s most valuable fast-delivery platforms.

Earlier this week, Sky News reported that the company was weighing a string of asset sales, including FreshDirect, a US-based online grocer it only acquired late last year, as part of efforts to repair its balance sheet.

Getir was valued at nearly $12bn (£9.7bn) just two years ago, and has sought to acquire a number of rivals which have run into financial trouble.

The company has already pulled out of a number of countries, including Italy and Spain, in an attempt to reduce losses.

Its retreat highlights the slumping valuations of technology companies once-hailed as the new titans of major economies.

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As well as Mubadala, Getir is backed by prominent tech investors including Sequoia Capital and Tiger Global.

The company was one of the hottest start-ups of the pandemic, when financiers rushed to plough billions of dollars into businesses they believed would benefit from structural shifts in the economy.

It raised more than $750m in a funding round in early 2022, but has seen its valuation slump since then.

Last September, Getir also announced a sharp cut in the size of its workforce, axeing roughly 2,500 jobs, or about 10% of its global employee base.

Founded in 2015, Getir was one of a crop of companies promising city-based consumers rapid delivery of groceries and other essential products.

During the COVID crisis, the industry saw sales explode, with emerging trends such as working from home fuelling investor confidence that the boom was sustainable.

Many of its rivals have already gone bust, while others have been swallowed up as part of a desperate wave of consolidation.

Getir itself bought Gorillas in a $1.2bn stock-based deal that closed in December 2022.

“Getir principally doesn’t comment on rumours,” a spokeswoman said on Friday.

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