TWO major financial institutions have been accused by a Yorkshire MP of acting “like a dark-suited Mafia” as they “colluded” to “steal” a company from its rightful owner.
Austin Mitchell, the MP for Great Grimsby, has called for an inquiry into the forced sale of Leeds firm Premier Motor Auctions in 2008.
Mr Mitchell said Lloyds Bank and accounting giant PricewaterhouseCoopers (PwC) were embroiled in the “monstrous theft” of the 10-year-old firm from its owner, Keith Elliott, after it ran up debts of more than £1.75m.
Mr Mitchell said Lloyds, which ran Premier’s overdraft facility, had placed a PwC executive on the firm’s board who said it must increase borrowing to £3.75m, creating “a hole in the company’s finances”. He said Lloyds then demanded the firm be put into administration and sold – with PwC acting as administrators.
The Labour MP suggested one of the finance giants even vetoed a last-minute rescue deal that Mr Elliott struck with Scottish Motor Auctions (SMA), so ensuring the administration went ahead – and hiking PwC’s fees from £10,000 to £500,000. The Leeds firm was then sold off to SMA anyway, with Lloyds retaining 50 per cent ownership.
“A company which was making £2.5m that year before tax was put into administration by PwC and bought back by Lloyds and SMA – and is now generating considerable profits for them,” the MP said.
“(Mr) Elliott has been forced out. SMA, Lloyds and presumably PwC are laughing all the way to the bank, having made a very considerable profit out of effectively stealing the company.”
Both PwC and Lloyds Bank have denied any wrongdoing, and said the case has been investigated by financial regulators who concluded there was no case to answer.
“PwC discharged its statutory duties and acted properly throughout,” a spokesman said.
Lloyds added: “This customer’s complaint has been looked at by the group at the highest level, and also separately by two regulators.
“To date no-one has uncovered anything to support (Mr) Elliott’s allegations.”