shareholder least 10% (11.1%) and Issued Audit let

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I'm a shareholder least 10% (11.1%) and Issued Audit letter to Director one+ month in advance of yearend annual accounts. Director reneged, 7 months later with audacity issued Micro yearend again company accounts. Is this now classed as fraud / criminal case please, is there anything else you can advise on Thank you

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By johngroganjga
26th Nov 2020 10:42

You mean you exercised your right to demand that the accounts were audited? And they haven't been?

If so, what you need is legal advice, not accountancy advice.

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By Wanderer
26th Nov 2020 11:28

Troy wrote:
shareholder least 10% (11.1%) and Issued Audit let

I'm a shareholder least 10% (11.1%) and Issued Audit letter to Director one+ month in advance of yearend annual accounts. Director reneged, 7 months later with audacity issued Micro yearend again company accounts. Is this now classed as fraud / criminal case please, is there anything else you can advise on Thank you

11.1% - 1 share out of 9? Residents property management company?

Occasionally we are approached to do this sort of work but have never got involved. Some cases it is patently clear that the company can't afford an audit.

Usually the request comes from a shareholder who has an axe to grind. There's always something more fundamental or underlying going on.

Possibly one of those legal rights which, in practice, is never enforced or is unenforceable? Possibly throwing good money after bad?

Have never known it to actually happen in practice. Be interested to know if anyone has.

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Replying to Wanderer:
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By Paul Crowley
26th Nov 2020 11:41

If a residents property company
Op needs head examined
Provided of course that there is an independant qualified accountant preparing the accounts.
Service charge 'audit' is different to company audit

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Replying to Wanderer:
Flag of the Soviet Union
By thevaliant
26th Nov 2020 12:13

The only times I've ever seen this is on this forum and UKBusiness Forum. Person comes on, complaining that an audit request has been ignored and what can they do about it.

Then everyone realises its a dead letter in law.

OP would presumably need to bring a private prosecution against directors. Don't know if they have savings in the six figures, but afterwards they certainly won't.

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By frankfx
26th Nov 2020 11:38

Let us know why you desire an audit.

Are you connected to other shareholders.

Are you receiving dividends.

Audits are expensive.

What are you expecting the audit to achieve?

There may be an expensive expectation gap.

In summary the director s may want to rid themselves of a nuisance share holder.... they may see you in that light.

Fall out in small businesses are not uncommon.

Entrenched views and personality clashes can be expensive to resolve.

You may have to take a deep breath and prepare to move on, unpalatable .

How much will director agree to pay for your shares ' nuisance' value

That is the lot of a minority shareholder.

Google......

Protection of minority shareholder

And

Lord Denning minority shareholder oppression

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Replying to frankfx:
Melchett
By thestudyman
26th Nov 2020 21:46

frankfx wrote:

Let us know why you desire an audit.

Are you connected to other shareholders.

Are you receiving dividends.

Audits are expensive.

What are you expecting the audit to achieve?

There may be an expensive expectation gap.

In summary the director s may want to rid themselves of a nuisance share holder.... they may see you in that light.

Fall out in small businesses are not uncommon.

Entrenched views and personality clashes can be expensive to resolve.

You may have to take a deep breath and prepare to move on, unpalatable .

How much will director agree to pay for your shares ' nuisance' value

That is the lot of a minority shareholder.

Google......

Protection of minority shareholder

And

Lord Denning minority shareholder oppression

These are all valid questions for the OP to answer. Unless there is a very genuine suspicion of dishonesty going on and something substantially wrong with the presentation of the accounts (e.g. fraud) then the OP may be throwing money away in trying to bring this to attention if the directors ignore a request.

However this measure is within the Companies Act. Shareholders always have this remedy, as unlikely as it is for them to get the result they want, we cannot just ignore that they have the option to "activate" this way. Shareholder activism has been increasing over the last few years, and directors should understand even minority shareholders can wield some influence.

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By Duggimon
26th Nov 2020 11:53

Minimum £6000 fee for an audit, minimum £500 fee for FRS105 accounts so I can see their motivation.

You need a lawyer, we are not lawyers. Of course then your fees will really start to climb.

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By Tax Dragon
26th Nov 2020 12:10

There's audit within audacity.

Curious, rather than funny. But I like curious.

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Replying to Tax Dragon:
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By Troy
28th Nov 2020 14:17

Glad you spotted it audit in audacity,,,,,

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By Paul Crowley
26th Nov 2020 12:15

This is company law only

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Replying to Paul Crowley:
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By Tax Dragon
26th Nov 2020 12:23

By which you mean civil, not criminal.

I suspect you are right. But (while IANAL I feel confident in saying) company law does include criminal offences.

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Replying to Tax Dragon:
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By Wanderer
26th Nov 2020 12:45

https://www.icaew.com/regulation/membership/icaews-guide-to-directors-re...

ICAEW wrote:

Breach of company law may be a criminal offence. For instance, breach of the CA2006 requirements on corporate administration (eg, keeping company registers and making filings) may constitute an offence for which the company and every officer in default may be liable.

Infers this sort of offence may be criminal.
Problem is, is there any prosecuting authority that would be even remotely interested in bringing a case?
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Replying to Wanderer:
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By Tax Dragon
26th Nov 2020 12:55

Wanderer wrote:

Infers this sort of offence may be criminal.

That was the query in the OP.

I may not have been able to answer it, but at least I've brought us back to the question! :-)

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By Calculatorboy
26th Nov 2020 18:41

Troy ..is your surname " Deep pockets " ?

Because you will need them,

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Replying to Calculatorboy:
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By paul.benny
27th Nov 2020 14:59

Who knows. Almost a day and a half after asking the question, the OP hasn't been back to participate in the discussion.

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By Troy
27th Nov 2020 18:34

I am humbled with such a response, thanks to all.
One person nailed it to the background situation i'm in and how it began.
I am 1 of 9 freehold leaseholders within a 9 block complex estate of apartments and we control our own Private ltd company, (as property services) only leasehold shareholders can become a director or directors, max of 9, but only 2 exist.
I have done nothing untoward to Sharehdrs or directors & paid monthly charges for 11 yrs, nothing in return. in fact director tried to get additional monies from me on verbal asks for refurbishment work on estate complex, got doped once out of £600 then i wised up.
So I thought get audit to get the detailed expenditure as Micro yearend report is useless just all subtotal values.
This director has numerous properties (5) outside this 9 flat complex estate and i'm sure he's using some of the shareholders like me as GDP Safety net. As he got a loan of £22,000, but i did not get to know about it until 13 months later, as gov website states loans to be prior discussed with shareholders, but in the AoA of the Plc director has the right to take loans onboard,but surely firstly discuss with all shareholders, fraud / criminal ???
Next point, on him becoming officially director (via the back door in AoA the current (now demised) then director can / did so authorise this shareholder as new director and in that year 2016 purchased a new property, and I know he has a mortgage I've seen it.
I've had 1 free chat (allowed 1) with solicitor but its going to be costly as it's a gradual build up of a clandestine run company, and in comparison monthly charge is low £80.
But i'm ahead of his curve ball he wants later to amalgamate his other properties with the 9 flat complex estate, but at the moment all 9 of us are equal shareholders and it by majority vote.
The only way i see it is get with other shareholders and start proposing company resolutions, or resolution for director to resign because I've never been given a dividend nor I think certain other shareholders.
I there was free legal advice or aid available i would jump at it, I'm that confident.

Thanks

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Replying to Troy:
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By Wanderer
28th Nov 2020 10:02

Troy wrote:

I am humbled with such a response, thanks to all.
One person nailed it to the background situation i'm in and how it began.
I am 1 of 9 freehold leaseholders within a 9 block complex estate of apartments and we control our own Private ltd company, (as property services) only leasehold shareholders can become a director or directors, max of 9, but only 2 exist.
I have done nothing untoward to Sharehdrs or directors & paid monthly charges for 11 yrs, nothing in return. in fact director tried to get additional monies from me on verbal asks for refurbishment work on estate complex, got doped once out of £600 then i wised up.
So I thought get audit to get the detailed expenditure as Micro yearend report is useless just all subtotal values.
This director has numerous properties (5) outside this 9 flat complex estate and i'm sure he's using some of the shareholders like me as GDP Safety net. As he got a loan of £22,000, but i did not get to know about it until 13 months later, as gov website states loans to be prior discussed with shareholders, but in the AoA of the Plc director has the right to take loans onboard,but surely firstly discuss with all shareholders, fraud / criminal ???
Next point, on him becoming officially director (via the back door in AoA the current (now demised) then director can / did so authorise this shareholder as new director and in that year 2016 purchased a new property, and I know he has a mortgage I've seen it.
I've had 1 free chat (allowed 1) with solicitor but its going to be costly as it's a gradual build up of a clandestine run company, and in comparison monthly charge is low £80.
But i'm ahead of his curve ball he wants later to amalgamate his other properties with the 9 flat complex estate, but at the moment all 9 of us are equal shareholders and it by majority vote.
The only way i see it is get with other shareholders and start proposing company resolutions, or resolution for director to resign because I've never been given a dividend nor I think certain other shareholders.
I there was free legal advice or aid available i would jump at it, I'm that confident.

Thanks

So to summarise you pay £80 per month in service charges and there is nothing wrong with the upkeep of the development? Sounds like all is okay then?

Lots of other stuff it appears you are plain wrong or barking up the wrong tree:-
"I am 1 of 9 freehold leaseholders"
"So I thought get audit to get the detailed expenditure"
"gov website states loans to be prior discussed with shareholders"
"of the Plc"
"because I've never been given a dividend"
Who knows what else in the above you are wrong about? You are very likely reading too much into the situation.

If you want to get more involved or obtain more substantial information the way to do it is get yourself appointed as a director. You have little, probably nothing, to be gained by forcing an audit other than incurring substantial extra costs for the company.

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Replying to Wanderer:
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By Paul Crowley
28th Nov 2020 11:31

Agree
Dividends probably not permitted
I deal will over 100 Service charge companies. none of those companies has ever received an audit request.
OP just needs to politely ask the director for a copy of the full accounts. If none received then stop making payments.
The formal demand for payment is only enforceable with accounts showing the costs incurred.
Probably wasted the prior solicitors time.
Pay for a proper solicitor to give good advice.

Alternatively name the company so that one of us can read the formation documents

STRONGLY recommend OP not to tell other company members that he tried to incur a £6,000 extra liability before discussing with them what he intended to do.

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Replying to Troy:
Flag of the Soviet Union
By thevaliant
30th Nov 2020 02:56

A shadow of its former self, but try the same questions here:
https://forums.landlordzone.co.uk/forum/long-leasehold-questions

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By Troy
28th Nov 2020 11:25

Yes, I seem to concur with your response, it's logical way in doing things and at no cost, and play the game, get involved ,,,
I became so incensed over the years and appreciate reply "to change tactics"

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Replying to Troy:
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By Paul Crowley
28th Nov 2020 11:38

But not once decided to talk or communicate to other shareholders or even bother to ask for full accounts?

Be aware if a meeting is held and your letter is made known not one sensible shareholder would want you anywhere near the decision making process..

The best people for running these things effectively are people who have lots of property. They know how to get things done the cheapest way

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Replying to Paul Crowley:
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By Troy
28th Nov 2020 14:07

The name of the company is Robertswood Associates Plc, private Co

Address, 49 Park Rd South, Middlesbrough TS5 6LE
Should you wish to review at Companies House, as i would be grateful.

I have asked respectfully 2 years ago but only get the Micro yearend accounts which to me are useless, I think we need a cost-control (excel workbook) that summates the detailed expenditure to designated groups / month to total summaries for yearend accounts for the independent charted accountant.
That's how I see it, am I asking for too much?

Rgds
Ken Long

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Replying to Troy:
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By Paul Crowley
28th Nov 2020 15:20

The 2019 accounts in full on companies house

Profit and loss in full view

https://find-and-update.company-information.service.gov.uk/company/04305...

Bank loan interest shown as a cost

Someone is charging £220 accountancy

Talk to other shareholders and get a proper independent accountant to prepare accounts. It will cost a bit more but worth the money and forget audit.
The persons with significant control disclosures are just plain wrong

According to Co house you are Kenny

No idea why the company is buying extra fixed assets, Building originally shown at £7,500

No idea what is really happening as the Provisions for liabilities is clearly a figure made to fit

Shareholders funds at £10,644 never changing is peculiar. Stagnated profit and loss account at an odd amount

No accounts I prepare would look like these

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Replying to Paul Crowley:
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By Troy
28th Nov 2020 16:41

Thanks Paul for your efforts and appreciated,

Can you please explain further your ' Bank loan interest shown as a cost'

As director states a loan through HSBC which i think bank only transports/transfers monies around, like it is not a company loan just a S/O set up to company from director to accrual / benefit from.

Yes strange findings you noticed, and Ken not Kenny, the director Mr Swan lacks integrity putting it mildly.
Thanks all again Paul
Ken Long

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Replying to Troy:
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By Paul Crowley
28th Nov 2020 18:08

Print the 2019 accounts
Last item on detailed profit and loss, labelled as page 5

this is a public forum
edit the word before 'putting'

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Replying to Paul Crowley:
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By Wanderer
29th Nov 2020 00:07

Paul Crowley wrote:

No idea why the company is buying extra fixed assets

Could be correct e.g lawn mower? Funded by bank loan?

Other than:-
'Increase Provision for repairs', which is likely a contrived figure to give the nil profit.
Accountancy which is stupidly low.
there's probably not a lot wrong with the underlying transactions.

Troy, no evidence in the published figures of 'GDP Safety net' (whatever that is), nor loan of £22,000, nor additional properties.

I'd hazard a guess you are over thinking the whole situation and reading too much into matters.

Carefully read Paul's advice.

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Replying to Paul Crowley:
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By Wanderer
29th Nov 2020 00:36

Paul Crowley wrote:

Someone is charging £220 accountancy

Talk to other shareholders and get a proper independent accountant to prepare accounts. It will cost a bit more but worth the money and forget audit

No accounts I prepare would look like these


2017 & 2018 accounts name a firm of Chartered Certified Accountants ...........
Although their own filing history leaves a lot to be desired.
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Replying to Wanderer:
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By Paul Crowley
29th Nov 2020 01:03

Shocking
Did you read the PSC?

If you pay peanuts........

Looks like the 2019 accounts filing was a mistake

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Replying to Paul Crowley:
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By Wanderer
29th Nov 2020 03:22

Paul Crowley wrote:

Did you read the PSC?

Didn't but have now. No idea, and shouldn't be advising others. Suppose if you only charge £220 for residents management company you can't afford to keep yourself up to date nor comply with your own filing responsibilities in a timely manner.
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