Zero Sum Worth

CEREP UK Investment D GP Ltd (no.05768117)  was recently informed that unless due cause was shown the company would be struck off the register and the company would be dissolved. Sounds ominous. The same document, which was sent to the directors (c/o The Carlyle Group), stipulated upon dissolution of the company all  "property and rights vested in, or held in trust for the company are deemed deemed to be bona vcantia, and accordingly will belong to the crown".

Sounds almost as bad as a bank threatening to take over your home if you don't pay your mortgage. But, of course, it isn't. If you look at CEREP UK Investment D GP Ltd's 2012 accounts (year end 30 June) you will see that the company is worth nothing. In fact, the the balance sheet is effectively overdrawn to the tune of almost £14.9 million.

Most of this amount is owed to Freeport, a company in which CEREP UK Investment D GP Ltd has a controlling share. (It's Freeport only shareholder). Unfortunately Freeport's own balance sheet has a deficit of £3.6 million. It's not worth much either, if anything. .

Makes you wonder what the "crown" would be inheriting if the company (CEREP UK) were dissolved. But don't worry. Due cause was shown why the company should remain on the register of company names (though the details not divulged) Does anyone care? CEREP UK Investment D GP Ltd is still worth nothing. Makes you wonder why it allowed to exist!  

It's Mine! (At Least According to William E. Conway Jr.)

People who make pots of money often think it's all down to them. They want all the credit - or as much of it as they can get. And they want all the cash -.or as much it that they can get. It's theirs - by right. The rest of us - we're nothing. Just their servants.

The above picture of David Rubenstein, joint CEO of the Carlyle Group, says it all: he's the king, you are the subject. Serve him.

William Conway, another joint CEO of Carlyle isn't much different. In his 2003 about the Carlyle Group, The Iron Triangle, Dan Briody attributed these comments to William Conway: "I am sick and of people complaining about their offices and their office furniture. It's not your office or your furniture. It's mine."

Briody went to say this about Conway and his Carlyle buddies, 'The way Carlyle was structured, the partners got very, very rich from big deals, and no one else saw a dime outside of their salary. Conway would would inexplicably remind employees of this sore spot when he would close a company meeting by proclaiming it was time to go out "and make me money."'

Says it all!

Worth The Money?

As many people might already know, the Bank of England has a new governor - Mark Carney - who took over from Mervyn King this month. But one of his first jobs has been... wait for it, to help publicize the issue of the new £10 note, which a picture of Jane Austen on the bank.

Very interesting. But is that what he is paid for?

300

The one thing you would expect from a qualified accountant, at least one that is a member of an esteemed institute like the Institute of Chartered Accountants of England and Wales (ICAEW) is that he can do (very) basic arithmetic. But no.

I recently downloaded (from Companies House) a set of accounts published by Freeport Retail Ltd (no. 07337895). Checking the accounts, I noticed that they didn't even add up: the total debtors figure of £177,066 less the creditors (amounts falling due within one year) of £96,995 should have been £80,071 - not the £80,371 stated in the accounts. A difference of 300. Clearly, it seems, that the creditors figure should have been £96,695  - or so we assume.

But this is not important. At least not to the ICAEW. I showed them the accounts and they confirmed the error, but merely thought that it was "sloppy" (their word). No further action would be taken. An accountant who doesn't check his own figures! Makes you wonder what the ICAEW do consider important.

The accounts were prepared by Ian S. Anderson of Maidenhead, Berkshire. They were also (almost certainly) prepared using a Word-type programme. That is why the figures did not add up. Accountancy packages (like ProCap), which tend do be more expensive, at least make sure that all the figures agree with each other.

Not only did Ian S. Anderson not check his figures, neither did the director, Iestyn Roberts, who signed the accounts. Mr Roberts once accused two former associates of Freeport, Charles Smith and Alan Perkins, of being incompetent. He should look at himself first!

Credit Worthy?

Would you invest in a company that had debts of nearly £15 million and had no assets and no visible means of income? No, of course you wouldn't. Nobody would.

However, CEREP UK Investment D GP Ltd, a company that owns (through its shareholdings) Freeport and also owes it almost £15 million in an ongoing loan - though it has no assets or means of income to back up this loan - is in a similar position.. Some people might question why this company should be allowed to exist.

In July this year there was an investigation by the Registrar of companies which asked this very same question - should it be allowed to continue? Though it finally conceded that there was sufficient cause not to have the company struck off the register. However, I wonder if The Carlyle Group (which essentially owns both companies) might decide to pull the plug anyway. CEREP UK Investment D GP Ltd has a loan to Freeport, which is in itself overdrawn (bankrupt) to the tune of £3.8 million - and is making losses via its profit and loss account; latest published accounts show a loss of approximately £68,000.

Does this make any economic sense to anyone?