VANTIS, the troubled accountancy outfit, is preparing a fire sale of its assets unless it can find an investor with a “wad of cash” to help pay down its £54m debt pile.
The Aim-listed firm tumbled deeper into crisis yesterday when its shares were suspended due to doubts over its ability to continue operating.
In a shock announcement to the stock exchange, Vantis also said chief executive Paul Jackson and senior manager Nigel Hamilton-Smith had resigned. Stephen Smith, the company’s finance director, will take over as interim chief executive until a new boss is found.
The statement said: “The board of Vantis has been focused on reducing the company’s level of debt… [But] it can no longer be certain that it will continue to have sufficient funding to enable it to continue to trade on a going concern basis.”
A source close to Vantis said its problems revolved around cashflow. Much of Vantis’ working capital has been tied up in the complex liquidation of Stanford International Bank (SIB) in Antigua, from which it has struggled to extract fees. Last week the High Court of Antigua dealt Vantis a heavy blow by removing it as joint liquidator of SIB.
Vantis’ working capital has also been soaked up by a wave of corporate insolvencies brought on by the recession. According to accounts for the six months to October, Vantis generated net cashflow of £700,000 on revenues of £43.1m. The interest bill on its debt for the same period was around £7.5m.
It is understood Vantis has put all its units up for sale, including its core business recovery, forensic accountancy, tax accountancy and corporate finance arms. An alternative would be a takeover by an investor with a “wad of cash”, a source said.
The developments cap a traumatic period for Vantis, which was rocked when two of its partners were charged with leading a multi-million pound tax evasion scheme in October. HMRC said David Perrin and Roy Faichney, members of Vantis’ tax team, helped affluent individuals dodge payments on £219m of income through an arrangement exploiting charitable donations.
Time Line | how vantis’ troubles multiplied
26 February 2009
Antigua plans to seize tens of millions of dollars of assets belonging to Sir Allen Stanford, the Texan tycoon accused of operating a huge Ponzi scheme. Vantis is brought in to liquidate his estate.
16 March 2009
Tensions emerge in the chase to sort out Stanford’s property and business holdings. The US accuses Antigua of muddying the waters by hiring a separate insolvency firm. Antigua says the US has no right to Stanford’s Antiguan assets.
15 September 2009
A full-scale spat breaks out over the processing Stanford’s assets. The Montreal Superior Court says the work should go to a US receiver, Ralph Janvey. Vantis, appointed by Antigua, says it “fully anticipates” appealing the ruling.
11 October 2009
Two senior figures at Vantis, David Perrin and Roy Faichney, are charged by HMRC with a £219m tax scam involving clients from the celebrity and sports worlds. The charges, which will be tested in court next year, damage Vantis’ reputation.
1 February 2010
Vantis falls £10.7m into the red for the first half to 31 October, after incurring £11.7m of write-downs on its assets. The loss comes on revenues of £43.1m and compares with a previous pre-tax profit of £4.6m.
14 June 2010
The company tells the stock exchange its shares have been suspended due to serious concerns over its ability to survive. Vantis’ paper has fallen 90 per cent in a year, valuing the group at just £5.9m.