Agenda item - Cash Collection - Company Administration Update

Report of the Executive Director, Finance & Resources

1)            That the Committee note the report.

2)            That the Committee support bringing a claim by the council against the Directors of CCI for wrongful trading, and/or their auditors once due consideration of the legal and financial risks have been considered by officers.

12.1      The Committee considered a report of the Executive Director, Finance & Resources that provided a further update following publication of the Joint Administrators’ latest progress report regarding the administration of CoinCo International Ltd (CCI), the council’s former security carrier provider.

12.2      Councillor Cobb asked if it would be possible to take legal action against the auditors of CCI.

12.3      The Executive Director, Finance & Resources answered that whilst there were high profile cases of auditors being sued for negligence, there was a very high threshold due to certain protections and indemnities.

12.4      Councillor Janio stated that action against CCI should be pursued with vigour to act as a deterrent.

12.5      The Chair noted that significant transactions in the context of the company activities had been made by CCI in 2012, 2013 and 2014 and therefore, it should be clear to establish which account that was deposited to.

12.6      The Deputy Chief Finance Officer confirmed this was a key point of the investigation by the administrators and that such transactions were made by CCI to give the appearance of being solvent. 

12.7      The Chair moved a motion to add a recommendation 2.2 as shown in bold italics below:

2.2      That the Committee support bringing a claim by the council against the Directors of CCI for wrongful trading, and/or their auditors once due consideration of the legal and financial risks have been considered by officers.

12.8      Councillor Sykes formally seconded the motion.

12.9      The Executive Lead Officer, Strategy, Governance & Law clarified that the motion was procedurally correct however; Members should be minded that as an unsecured creditor, it may not be possible for the council to recover its full claim. The Executive Lead Officer, Strategy, Governance & Law supplemented that it would incumbent on officers to use resources in the most appropriate and diligent manner and with a view on the likelihood of successful challenge.

12.10   Councillor Robins expressed his disappointment that the motion had been tabled adding that procedural rules dictated that any motion should be received by 10am on the morning of the meeting. Councillor Robins supplemented that there was little time to consider the motion when there had been insufficient notice and seemingly, the Chair had used his powers of discretion to accept his own motion.

12.11   Councillor Janio noted that a similar incident had occurred at a recent meeting of the Policy, Resources & Growth Committee.

12.12   The Chair apologised for the lateness of the motion that was due to personal circumstances hindering a drafting of the motion. The Chair added that the motion was not a controversial one in his view and set out more succinctly the actions officers had intended.

12.13   The Chair then put the motion to the vote that passed.

12.14   The Chair then put the recommendations as amended to the vote that passed.

12.15   RESOLVED-

1)            That the Committee note the report.

2)            That the Committee support bringing a claim by the council against the Directors of CCI for wrongful trading, and/or their auditors once due consideration of the legal and financial risks have been considered by officers.