Around midnight last night, Ms Raccoon’s e-mail pinged with an exceptional morsel from Tom Winnifrith, the experienced and multi-talented financial journalist who was responsible for uncovering the frauds that lay at the heart of Rob Terry’s empire. That would be the ’empire’ that Slater and Gordon engorged in one gulp around a year ago as they sought to dominate the British personal injury market.
I haven’t had a lot of sleep since, too busy sitting on the virtual sofa with Tom watching a train crash occur on the Australian stock market as you slept. S & G shares, already down by a dizzying 90% from when anybody actually believed a word they said, was losing another 30% of the meagre 10% of value the market thought remained in them.
The problem can be summed up in one phrase. ‘False allegations’. The credulous high flying lawyers at Slater and Gordon believe everything they are told. They bet the bank on it. Actually they bet your bank on it. And your pension fund, and probably your shirt as well.
‘False allegations’ in particular, as made by Rob Terry, who so convinced them that his business was stuffed with cash opportunities for a credulous law firm that they borrowed and borrowed to buy him out – $1.3 billion Australian dollars to be exact – and now it turns out, after several fevered days of top financial auditors poring over the books, that the business was worth – at best – a measly $.3 billion dollars. They had overpaid by a cool Billion.
One of the attractions of Rob Terry’s empire was the ‘WIP’, a curious accounting mechanism, perfectly legal in Australia and Britain, but a mystery to international investors, whereby even a ‘false allegation’ can become a company asset.
‘WIP’, or work in progress, in the international world of accounting is held to be a cash asset. Perhaps you have signed a contract with the Italian Navy to build three boats for them at ten million a pop – that’s 30 million as good as in the bank, even though you haven’t built them yet and have only just bought the steel. Our accounting rules, and in Australia, allow you to put that 30 million of ‘almost there’ money in your shop front to lure in potential investors.
In the case of a personal injury law firm – and Slater and Gordon were the first to raise money on the stock market – your ‘WIP’ is not steel lying in your boatyard, it is middle aged matrons lying in your office…it is the claims that they were definitely assaulted 40 years ago and it has ruined their life ever since; it is the tales of Wombles, and Rolls Royces; of men who could walk through walls, and cobblers who make shoes out of baby’s skins. Slater and Gordon were so enamoured of these tales and the effect they had on the international money markets as their ‘cash assets’ soared, that they rushed to Britain and bought up every law firm they could find that had such a ‘product’ on their books.
Amongst the firms they bought were some who had positively committed fraud to boost their cash assets in this manner – including a company called ACH being sold by a convicted Nigerian fraudster, Andrew Odua; and Quindell, ostensibly a golf course but apparently holding several thousand claims for personal injury in the form of ‘hearing loss’ – Quindell, now known as Watchstone Group, is under investigation by the Serious Fraud Office.
70 credulous Slater and Gordon lawyers carried out ‘due diligence’ on Quindell before the purchase and cried with one voice #Ibelievethem. Last week, Slater and Gordon were forced to suspend trading in their unicorn shares as they belatedly took a second look at what they had bought.
A convenient state of affairs, for on Thursday we had the Dame Janet Smith report on the ‘hundreds of horrendous rapes and murders that Savile was alleged to have carried out at the BBC’ – claims that had done so much to boost Slater and Gordon’s standing on the international markets with their ‘hundreds of victims’ or ‘WIP’.
Buried in the lurid media coverage, and Slater and Gordon’s anguished cries on the airwaves, was the solid fact that precisely 36 victims had received a derisory average £14,000 for incidents which ‘could’ have occurred on BBC premises, not even necessarily anything to do with Savile, but considered as part of the same overarching ‘investigation’. Slater and Gordon picked up £381,000 for legal fees.
Do we need reminding that only days before, Slater and Gordon had negotiated £100,000 for Oisan’s punch on the nose? That should give you some idea of how seriously those ‘settled claims’ were taken.
It’s your money of course. Feel free to sit quietly as it gurgles down the plug hole.
Junior doctors are baling out of the country, nurses cannot leave fast enough, teachers are fleeing to Dubai and other exotic parts – and apparently our biggest concern to be addressed is the question of BREXIT.
If our continental neighbours have any sense, they will be considering the question of BROGOFF before we infect them with our madness.
Truly we are in ‘One flew over the cuckoo’s nest’ territory.
I leave you in the capable hands of Tom Winnifrith, viewing the debacle through a well earned bottle of Tequilla, for the full gory details of what was revealed last night. (You may have to register to hear it – its free and worth it!)
Quote: Slater and Gordon are ‘completely and utterly fuc*ed’.
Ms Raccoon is going back to bed.