New Post Office scandal report sparks call for ‘fast action’ as software is compared to Horizon

Published

1 month ago

September 30, 2024

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A lawyer representing people affected by a “second Post Office IT scandal” has said they “must not” have “a long, hard battle ahead for exoneration and compensation”.

A report today found it is “a reasonable likelihood” that Capture software “created shortfalls” for sub-postmasters prior to the Horizon scandal.

The system, which was the predecessor to Horizon, was rolled out to branches from 1993 onwards.

An inquiry into the Post Office’s Horizon accounting system has heard that more than 900 sub-postmasters were wrongly prosecuted and received criminal convictions because the IT system made it appear as though money was missing at their branches.

At least 40 former sub-postmasters claim they were also falsely accused of stealing as a result of “glitches” in Capture.

The independent report into Capture by Kroll, a risk advisory and financial solutions company, concluded it was “a reasonable likelihood that Capture could have created shortfalls for sub postmasters”.

Kroll has not made any conclusions about the safety of criminal convictions. It did find that 13.5% of all branches may have been using Capture.

The report also discovered that sub-postmasters said that network managers and area managers pressured them to use the system.

It said that legal investigation teams weren’t looking at the question of “bugs or errors” in the system at the time.

Kroll also questioned the Capture Helpdesk remit and effectiveness.

Following the publication of the report, Neil Hudgell, a solicitor at Hudgells solicitors, told Sky News his firm is advising more than 70 people who experienced unexplained losses at their branches when Capture was in use.

He said: “Like Horizon, it was a flawed system which was destroying lives whilst officials repeatedly ignored the evidence playing out in front of their eyes.”

The independent review has only taken place “as a result of the bravery, determination and resilience of those affected, who came forward to speak about what had happened to them, and ultimately would not let injustice go unchallenged”, he added.

Mr Hudgell is calling for “fast action on these failings” including the creation of a compensation scheme to allow people to “seek speedy settlements, or to further investigate their own individual cases”.

“It should never have needed such a long, hard battle to reach this stage, and there now must not be a long, hard battle ahead for exoneration and compensation,” he said. “As we have seen this year, new legislation can be fast-tracked and introduced to overturn unsafe convictions and clear peoples’ names.”

Lord Beamish, formerly MP Kevan Jones, was at the report briefing meeting and said he believes that records on Capture “do exist”.

“I think some more digging needs to be done at the Post Office,” he said. “I wouldn’t trust the Post Office as far as I can spit.”

He described it as a “copycat” of the Horizon scandal.

A Post Office spokesperson said: “We have, and will continue to, fully support the independent forensic accountancy investigation established by the government into the Capture software.

“We have been very concerned from the outset about the reported problems relating to the use of the Capture software in the 1990s and are sincerely sorry for past failings that have caused suffering to postmasters.

“We remain determined that wrongs must be put right as far as that can be possible.”

Earlier this year, Sky News revealed that the government agreed to have an independent expert review evidence of Capture.

A group of sub-postmasters submitted material, including floppy disks containing the software, to investigators.

They claimed that errors occurred when upgrades were made to Capture, and power cuts were also another possible reason for faults.

Steve Marston, 68, says he was wrongly convicted of theft and false accounting after errors caused by Capture accounting software.

Auditors found shortfalls of £79,000 at his branch in Greater Manchester in 1998 – he subsequently pleaded guilty to theft and false accounting.

He said Capture “was totally unfit for use and should never have been released”.

He claims that sub-postmasters were told that “[the software] would make our lives easier and that we would no longer have to do manual accounting as we had in the past”.

He says he was given Capture by the Post Office “and basically left to get on with it without any sort of guidance”.

Another Capture victim, Steve Lewis, lost his job in 2000 after raising concerns about shortfalls and Capture software glitches.

“I’ve always been looked on as being the man who robbed the Post Office,” he said.

“I lost my post office, the commercial buildings that I had moved my office to, and was forced to sell my family home.”

Mr Lewis claims he was warned “not to be a troublemaker” and told the issues were only happening to him.

It wasn’t until he watched the TV drama, Mr Bates Vs The Post Office, that he “realised” similarities between Horizon victims and himself such as “unexplained losses”.

Documents seen by Sky News also show the Post Office knew Capture was prone to glitches which could cause accounting issues.

In January, the government ordered the Post Office to investigate the claims related to Capture.

Business

Chelsea co-owner Boehly goes into bat with Lords cricket bid

Published

3 hours ago

November 2, 2024

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Chelsea co-owner Boehly goes into bat with Lords cricket bid

The joint owner of Chelsea Football Club has joined forces with one of his fellow board members to bid for the most valuable team in English cricket’s Hundred competition.

Sky News has learnt that Todd Boehly is backing a bid spearheaded by Jonathan Goldstein, a British property entrepreneur, in an offer for a large stake in London Spirit, the Lords-based franchise.

The bid represents the latest move by Mr Boehly, a billionaire financier, to gatecrash the British sporting elite, following his takeover of Chelsea in 2022 alongside Behdad Eghabli, the founder of Clearlake Capital.

Recent reports suggest the pair have fallen out and are looking at ways to buy each other out of the club.

Mr Boehly’s interest in the London Spirit franchise puts him and Mr Goldstein on a shortlist of a handful of bidders for – at least – a 49% stake in it.

Sources said this weekend that the other contenders to buy the interest as part of a process run by the England and Wales Cricket Board were Sanjiv Goenka, an Indian billionaire who owns the Indian Premier League’s (IPL) Lucknow Super Giants; the owners of the IPL’s Chennai Super Kings; India’s ultra-wealthy Ambani family; and possibly members of the Glazer family, which retains the largest stake in Manchester United Football Club.

The London Spirit franchise is expected to command the highest price of the eight teams being auctioned, with one of Chelsea’s lenders, Ares Management, plotting the purchase of a stake in the Oval Invincibles, Sky News revealed on Friday.

CVC Capital Partners, one of the most prolific backers of global sport with stakes in the men’s professional tennis tour and rugby union’s Six Nations Championship, is also bidding for the Oval Invincibles.

Insiders said CVC had also submitted offers for two other Hundred franchises.

In total, roughly 35 bids are said to have been shortlisted for the eight teams, with the respective host counties able to decide whether they offload part of their 51% stake in order to give new investors control of the franchise.

Those 35 proposals are, in turn, said to have come from 15 separate investor groups.

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The teams are in aggregate understood to have been valued at more than £600m in the first round of the auction, with the proceeds distributed across the recreational game, the 18 first-class counties and the MCC, which owns Lords.

The eight host venues play home to teams including the Northern Superchargers, Manchester Originals and Southern Brave.

A bigger-than-expected windfall from the process could offer a financial lifeline to a number of cash-strapped counties, with part of the proceeds likely to be used to pay down debt.

Concerns have been raised, however, that windfalls from the Hundred auction will not deliver a meaningful improvement in counties’ long-term financial sustainability.

The outcome of the auction, which will become clear in the coming months, is also likely to intensify other searching questions about the future of cricket, as the Test format of the game struggles for international commercial relevance against shorter-length competition.

The Hundred auction is being handled by Raine Group, which also oversaw the sale of Chelsea to Mr Boehly and Mr Eghbali two years ago after Roman Abramovich was sanctioned by the government.

Mr Goldstein, CVC and the ECB declined to comment on the process.

Business

Investment giant KKR wades into Thames Water survival battle

Published

6 hours ago

November 2, 2024

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One of the world’s largest investment firms has waded into the fight over the future of Thames Water, the water utility which is racing to stay afloat.

Sky News has learnt that KKR is in talks with Thames Water and its advisers about participating in a £3bn share sale which forms part of a wider recapitalisation plan.

City sources said this weekend that KKR, which has more than $550bn of assets under management, was among a handful of parties which had accessed a data room for potential investors.

Rothschild, the investment bank, is running a process to raise around £3bn from the sale of an equity stake in Thames Water, which is grappling with a debt mountain of as much as £19bn.

Other investors which have expressed interest in acquiring newly issued shares in the water company include Carlyle and Castle Water, the latter of which is controlled by Graham Edwards, the Conservative Party treasurer.

Global Infrastructure Partners, which is owned by BlackRock, Brookfield and Isquared are also reported to have lodged an interest, although sources said that the latter two were unlikely to play any further role in the process.

The crisis at Thames Water is presenting Sir Keir Starmer’s administration with a challenge as the debt-laden company attempts to avert temporary nationalisation.

Insiders said that KKR was “a serious player” in the equity process being run by Thames Water, although its outcome hinges on a final determination by Ofwat, the industry regulator, which is due by January at the latest.

Thames Water – and other suppliers across Britain – wants to hike bills and is demanding leniency from Ofwat on fines for past transgressions.

One obstacle to KKR buying a big stake in Thames Water, which has more than 15m customers, may be its 25% holding in Northumbrian Water.

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Under Ofwat’s mergers regime, the Competition and Markets Authority would need to review the deal, although there would not be an automatic prohibition.

The share sale process is being run in parallel to an attempt to raise up to £3bn in debt financing from hedge funds and other investors.

A battle has broken out between the holders of Thames Water’s class A bonds, which account for the bulk of its borrowings, and its riskier class B debt.

Both sets of bondholders have submitted proposals to the company, with the class A’s arguing that theirs is more certain and the class B’s arguing that theirs will save the company £380m or more in fees and interest over a 12-month period.

Thames Water has already endorsed the class A group’s offer, with an initial £1.5bn of funding to be delivered immediately.

The class A bondholders are now trying to secure backing for their proposal within the next fortnight.

Their group, which includes the American hedge funds Elliott Advisers and Silverpoint, would earn in the region of £650m during the first year of the financing.

One area of controversy is likely to be any incentive plan for Thames Water bosses, led by chief executive Chris Weston, as part of a deal to give the company a stay of execution.

Last month, the environment secretary, Steve Reed, established an independent review of the industry that will look at far-reaching reforms.

It was unclear this weekend which of KKR’s funds was participating in the Thames Water equity-raise.

The firm owns John Laing, an infrastructure investor, which it took private in 2021.

It has also owned South Staffordshire, another water company, selling its 75% interest in 2018.

KKR declined to comment.

Business

Reynolds to hold talks with bosses amid business budget backlash

Published

1 day ago

November 1, 2024

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Reynolds to hold talks with bosses amid business budget backlash

The business secretary will next week hold talks with dozens of private sector bosses as the government contends with a significant corporate backlash to Labour’s first fiscal event in nearly 15 years.

Sky News has learnt that executives have been invited to join a conference call on Monday with Jonathan Reynolds, in what will represent his first meaningful engagement with employers since Wednesday’s budget statement.

Rachel Reeves, the chancellor, unsettled financial markets with plans for billions of pounds in extra borrowing, and unnerved business leaders by saying she would raise an additional £25bn annually by hiking their national insurance contributions.

An increase in employer NICs had been trailed by officials in advance of the budget, but the lowering of the threshold to just £5,000 has triggered forecasts of a wave of redundancies and even insolvencies across labour-intensive industries.

Sectors such as retail and hospitality, which employ substantial numbers of part-time workers, have been particularly vocal in their condemnation of the move.

On Friday, the Financial Times published comments made by the chief executive of Barclays in which he defended Ms Reeves.

“I think they’ve done an admirable job of balancing spending, borrowing and taxation in order to drive the fundamental objective of growth,” CS Venkatakrishnan said.

His was a rare voice among prominent business figures in backing the chancellor, however, with many questioning whether the government had a meaningful plan to grow the economy.

Mr Reynolds held a similar call with business leaders within days of general election victory, and over 100 bosses are understood to have been invited to Monday’s discussion.