THE death of Heritage plc may have been no different from hundreds
of other company
receiverships, but that, according to London MP Dr Rudi Vis, is the true scandal: Heritages
die all the time, and from the same cause. Vis, in the Commons, Baroness Dean and
fellow-peers Lucas of Crudwell, Montague of Oxford and Evans of Watford - among others
- have described in the Lords how when a bank gets edgy about a company it will send in
a firm of accountants to investigate. Too often, the investigating accountants are also in the
More often than not there are bigger fees to be
made in putting a company into receivership
than not. Occasionally, the accountants have been advisers to the company and may wish to
cover their tracks.
When the investigating accountants advise that a
company should be put into receivership, the
bank usually appoints the firm to conduct the receivership. After all, the firm has already
picked over the company's books. Some accountancy firms offer to conduct
investigations as a loss-leader to get the lucrative receivership.
In the carve-up that follows, the bank and its
receivers get paid off first. Other creditors
have to take their chances. Businesses, jobs and homes are lost.
Companies are being sent into receivership,
MPs and peers have heard, when in many
cases they could have been saved.
One such company, Dr Vis believes, was Heritage
plc, a quoted London importer of
tableware from volume manufacturers in Europe for resale to Asda, Woolworths and
other stores. Heritage employed 105 people, a dozen of them disabled, most of them in the
HQ at Marshgate Lane, Stratford, one of the poorest districts in London, and others at a
small factory in Manchester.
Heritage went public in 1988. It went down,
owing £3 million, in 1996 after its bankers,
Lloyds TSB, sent in Grant Thornton as investigating accountants. The bank then
appointed Grant Thornton as receivers.
Three years later, the Heritage affair just will
not go away. Dr Vis is shortly to have a
meeting with Trade Minister Kim Howells about the Department of Trade and Industry's
inquiry into the Heritage affair. At issue is Dr Vis' call for a prosecution under Section 47 of
the Financial Services Act, which deals with the withholding of information or the issue of
misleading information re- garding investments.
Lloyds TSB and Grant Thornton, Dr Vis has alleged
in the Commons, colluded to make the
former chairman, managing director and major shareholder of Heritage, Jeffrey Lampert,
invest a further £250,000 in the company, when the bank and the receiver, claimed Vis, knew
what Lampert did not - that a decision on whether or not to close Heritage was now
'finely balanced'. Both the bank and the accountants have disputed Dr Vis' version of
Dr Vis, a former economics lecturer at what is
now the University of East London, is Labour
MP for Baroness Thatcher's old seat, Finchley and Golders Green. He and Baroness Dean in
the Lords aired the Heritage issue, and have succeeded in getting the DTI investigation into
Trade Minister Kim Howells has since queried
the propriety of the same accountants acting as
both judge and jury in receiverships.
Dr Vis took up the case of Heritage Plc because
Jeffrey Lampert is his constituent, and
- like many accountants - he now believes the methods of the insolvency business should be
put on the Government's 'Rip-Off Britain' list, along with the marketing of dud private
pensions and endowment mortgages.
On 16 November Jeffrey and Vanessa Lampert
moved out of their home of 16 years in
Hampstead Garden Suburb, which was sold in order to pay off personal guarantees to the
Jeffrey Lampert said today: 'I am staying in the
Finchley and Golders Green constituency,
because not only do I want to vote for Rudi Vis at the next General Election, but I want to
go knocking upon doors urging other constituents to vote for him as well. Nobody
could do more for a constituent than Rudi Vis has done for me, when nobody else wanted to
The Bank of England, the Financial Services
Authority, and the Banking Ombudsman all
told Jeffrey Lampert that he was someone else's problem, the Commons were told by Dr
Heritage's problems, he said, began in 1995
when Lampert sacked his finance director over
tax irregularities in the company's books. This was George Raynor, whom Dr Vis said, is a
friend of Brian Moritz, a partner in Grant Thornton. The accountancy firm was then
Heritage's tax adviser.
Heritage then fired Grant Thornton, whereupon
Lloyds asked Lampert to put £250,000 into
Heritage, money which the bank would lend him upon the security of the family home. A
year later, Lloyds asked for a further £125,000.
These were 'on demand' loans, which means that
a bank can ask for its money back
whenever and as quickly as it likes.
'Business people should not be encouraged to
invest in themselves when the insolvency
industry can grab that investment with impunity,' Dr Vis told MPs.
Lloyds TSB, the MP said, then asked for the
Heritage overdraft (then £594,000 ) to be paid,
giving Lampert, quite legally, two banking hours' notice. At the end of those two hours,
the investigating accountants, Grant Thornton, were appointed receivers. Lampert has been
harrying Lloyds TSB and Grant Thornton ever since.
Dr Vis says there is a clear conflict of interest
inherent in any accountants acting both as
investigators and receivers. Heritage, he told MPs, could have been saved and, indeed, was
already on the mend. A reconstruction scheme had been drawn up with advisers other than
Grant Thornton, and merger talks with a supplier were under way.
Kim Howells says his officials have yet to
come up with enough evidence for a
prosecution. The Institute of Chartered Accountants, to whom Lampert complained, is
also looking into the Heritage case, although many ICA officials cannot see what all the fuss
is about.The Finchley and Golders Green MP says he is going into the meeting with Kim
Howells with the evidence he thinks should fill in any remaining gaps in the DTI investigation.
On average, one quoted company a month is going
into receivership. The number of firms in
the hands of receivers rose 13% to 273 in the third quarter of this year, nearly half of them in