Questions have been raised over the sale of Hebridean Princess to industry investors led by Roger Allard shortly before the collapse of the All Leisure Group which he chaired.
Focus has fallen on the independence of Grant Thornton, whose corporate finance unit advised directors on the sale and leaseback of the ship in 2015 and some other businesses, before the firm’s appointment in January to handle the administration of All Leisure, The Times reported.
In a statement of the administrator’s proposals recently filed at Companies House, Grant Thornton said: “There are a number of matters which have been brought to the attention of the joint administrators and will be reviewed further during the course of the statutory investigations process.”
The administrator must file a report to the Department for Business, Energy and Industrial Strategy regarding the conduct of directors in charge during the three years prior to the administration under its statutory duties.
Grant Thornton added in its report: “Creditors should note that further investigation into these matters is not confirmation of any wrongdoing on the part of the directors.”
Grant Thornton is reviewing all recent transactions of the Market Harborough-based company, which was delisted from Aim in June last year,
Under the sale and leaseback of the Hebridean Princess, £3 million was paid in December 2015 by a consortium led by Allard, and All Leisure continued to operate the ship under an eight-year lease for £500,000 a year, with the option to buy it back within two years.
The funds were designed to plug cash requirements in All Leisure’s cruise business, including the Swan Hellenic and Voyages of Discovery brands, which had been loss-making for a number of years.
The report blames some of the group’s more recent woes on currency fluctuations and a fall in demand for holidays and cruises to Turkey and Egypt due to terrorism and political unrest.
With All Leisure leaking cash, the directors looked to raise further funds from disposals.
These included the sale in December for £3 million of the continuing Hebridean Island Cruises operation to Allard’s consortium, effectively reuniting the ship and the company that ran it, the newspaper reported.
Grant Thornton’s initial investigation indicates that all sales were “undertaken following market testing”, were reviewed by the independent board members with advice taken from professional advisers “in the context of both value and insolvency risk” and took into account the Hebridean Princess would have ceased trading if it had gone into administration because of licensing requirements.
Before being appointed administrator, Grant Thornton said that it “carefully considered” its position with regard to the licensing bodies’ ethical guidelines and “considered that there were no circumstances preventing them from being administrators of the company”.
Grant Thornton had previously advised All Leisure on the sale of its profitable Travelsphere and Just You escorted tour brands to G Adventures.
Allard rejected any suggestion of wrongdoing, telling The Times: “I am confident that everything was above board, with all transactions conducted on an arm’s length basis.
“Everything that took place was done for the good of the company, its creditors and its shareholders. I have complete confidence that the Grant Thornton investigation will confirm this.”
Grant Thornton said: “The role of the joint administrators is ultimately decided by the creditors and for whom the work is conducted; and there has been unanimous support for their proposals.”