Connaught debts may reach £100m
Published: 09 November, 2010
LONDON: Connaught could owe more than twice the multimillion-pound debt originally thought after 50,000 missing invoices were discovered, administrators said.
KPMG, which was appointed 10 weeks ago, said management accounts led it to believe the social housing arm of Connaught owed £46 million to thousands of unsecured creditors, ranging from a rugby club to a dairy supplier.
But as they compiled a creditors report, the administrators discovered thousands of supplier invoices that had not been processed and now believe debts could rise to as much as £100m.
Connaught owes trade creditors such as PTS Plumbing Trade Supplies, Jewson and Travis Perkins, nearly £57 million.
David Costley-Wood, joint administrator and restructuring partner at KPMG, told the Financial Times: "We were surprised at the level of backlog of invoices that had not been processed for a listed company."
The creditors' report also showed there was only £600,000 available to the unsecured creditors - meaning they are likely to recover less than one penny in every pound.
KPMG also said centrally-held employee records "proved to be 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."