December 4, 2022

Davey and Bottomley quiz OFT over its leniency deal with Peverel over the Cirrus price-fixing scam

ScandalstrapEnergy Secretary Ed Davey demanded answers this afternoon from the Office of Fair Trading over its tardy investigation into the Peverel / Cirrus price-fixing scandal.

He and Sir Peter Bottomley, MP for Worthing West, wanted to know why the investigation was so protracted and why Peverel was offered a 100 per cent leniency deal.

Peverel only began co-operating with the OFT after the Times had already outlined how its scam with Cirrus operated on December 4 2009. One of the three Campaign against retirement leasehold exploitation whislteblowers, Susan Wood, has involved Nick Clegg, her MP, in the case.

In a letter to Cavendish Elithorn, senior director, Office of Fair Trading (Goods & Consumer), Wood writes:

“Disappointment turned to outrage when I discovered from your press release that Peverel had successfully gamed the system by claiming leniency because of self-reporting, allegedly before you had received formal notification from either ourselves, or the SFO.  Quite apart from the information that was in the public domain, it is clear that Peverel only turned themselves in because they had seen the Times article of 4th/5th December 2009, and realised the game was up.  Hardly a crisis of conscience.  And the information in the Times had been supplied by one of the Campaign against retirement leasehold exploitation complainants.”

Her full letter is below.

At the meeting this afternoon, Sir Peter Bottomley set out his view that he did not believe that the Cirrus fiddle was cartel, but one with a dominant party calling the tune or perhaps a monopoly.

The OFT set out as per the preliminary findings and press statement that Peverel had reported themselves as being part of a cartel to supply door access systems in the retirement sector through is Cirrus subsidiary.

It is clear from public records that the other three companies in the cartel were very small and the whole purpose to the scam was so that “Cirrus allegedly shared confidential pricing information with each of the other companies with the aim that they would submit higher bids, enabling Cirrus to win the tenders”

The OFT was pushed strongly to consider whether it should bring stronger action which would result in a fine.

While not being able to set out what would be in the final findings, the OFT made clear that it understood one of the functions of its findings was to provide information which those impacted by this practice could use to help obtain compensation.

On a wider issue, Ed Davey set out that he had raised a number of concerns about the lack protection offered in the retirement sector and those concerns remained. The prospect of referring the sector to the competition commissioner was raised.

The full implications of this meeting are yet to be revealed.

But thanks to Campaign against retirement leasehold exploitation a cosey little stitch-up between OFT and Peverel is now receiving the full attention of senior politicians.

The open question is whether this scandal impacts more on Peverel or the pathetic and indolent OFT.

 

Susan Wood’s full letter to the OFT is below:

To:   Cavendish Elithorn
Senior Director – Office of Fair Trading (Goods & Consumer)

Dear Mr Elithorn

As you know, I am one of the main three Campaign against retirement leasehold exploitation complainants in your long-standing enquiry into the Peverel group.  I have personally spent a huge amount of time assisting your team and providing them with what I believed was information to help them understand the case.  I was initially disappointed that the OFT diluted my complaint – which was ‘abuse of a monopolistic position in the marketplace’ – by putting it together with Ken Kilmister’s complaint about Cirrus to the Serious Fraud Office in 2009, and restricting your investigation to the Cirrus bid-rigging only.  Disappointment turned to outrage when I discovered from your press release that Peverel had successfully gamed the system by claiming leniency because of self-reporting, allegedly before you had received formal notification from either ourselves, or the SFO.  Quite apart from the information that was in the public domain, it is clear that Peverel only turned themselves in because they had seen the Times article of 4th/5th December 2009, and realised the game was up.  Hardly a crisis of conscience.  And the information in the Times had been supplied by one of the Campaign against retirement leasehold exploitation complainants.

At the meeting in July, you explained the OFT’s leniency rules were designed to tempt the ‘little people’ caught up in price-fixing to blow the whistle on the major players.  But in this case, you have allowed Peverel – the perpetrator of the whole thing – to cynically exploit the rules, and get off Scot free, while two of the little companies so essential to the scam have gone into administration.  Throughout the case, the OFT pledged us to keep matters confidential, on the grounds that disclosure could prejudice a prosecution.  But your team knew all along that our evidence wasn’t needed, because Peverel had already admitted they were running the scam.  And they were also seemingly immune from penalties.  I feel our time, and that of our pro-bono lawyers, has been wasted.

In fact, our entire dealings with the OFT have proved to be a disappointment.  (This extends also to the insipid outcome of your investigation into exit fees.)  You have not provided an adequate explanation of why you didn’t start the Cirrus scam investigation until 2011, despite learning of it in December 2009.  And at our meeting on 24th July, you promised we would be told “within two weeks” either the precise date Peverel allegedly turned themselves in, or that you were not prepared to tell us.  We are still waiting.  I am also disgusted you have withheld the non-confidential Statement of Objections on the grounds we didn’t apply for ‘formal complainant’ status.  But it didn’t occur even to our very experienced lawyer that this would be necessary.  Indeed, the OFT themselves have referred to us as ‘complainants’ all along (see sample email from Yael Shine on 23rd November 2011).

I am still keen to help you in any way with this investigation, so I am asking once more for a copy of the Statement of Objections so I can ‘materially assist you’, as required by your rules.  As we have said repeatedly, the Cirrus scam is only the tip of the iceberg of the lucrative exploitation of the elderly indulged in over the years by  Peverel & Consensus.  We are all doing our best to bring them to book, and make sheltered retirement housing a secure option in all senses of the word for the elderly.  Unfortunately, to date the authorities have provided only flimsy support.

Please also note that I am copying this to Nick Clegg, my local MP, who has asked to be kept informed.

Regards

Susan Wood

Comments

  1. Susan,
    Well done, I have followed this Peverel/Cirrus/Careline Fiasco since it first raised its head. I have also noted that it was designed to allow the little people to be free from prosecution not Major Companies such as Peverel. I will notify our MP Mr Philip Dunne and email Sir Peter Bottomley who I know has taken a great interest in this disgraceful episode.

    What can we do next to prevent this total injustice?

  2. Well done Susan for not taking no for an answer and pursuing this until they agree to a proper investigation. As ever, they think people will get tired and give up… no we won’t!

    I shall add my name to the list of people who will forward the link to this case onto my MP Ed Balls and Hilary Benn MP the Shadow Secretary of State for Communities and Local Government…

    I can’t help thinking that MP’s who spend more than the accepted level on a taxi home get more grief than Freeholding Landlords and their agents for mis management of leaseholders funds that can go into the millions collectively…..where is the justice?

    • Karen
      I wonder under what part of the The Whistle Blowing has Peverel been let off. Where do we find the actual Legislation that can be challenged. Who is in charge of the OFT and do we have an email address to let them know how we feel.

      I recently asked our Area Manager at a Budget Meeting what do we pay Cirrus/Careline for under the heading Door Entry & Emergency Call System. We were informed it was an Insurance that if there was a problem we would be visited by a Cirrus Engineer within 24 Hours. We do not have any communal areas that require a Door Entry System. If this is an Insurance Contract why is it not covered under the Cost Heading, Insurance, the first floor flats have a single door entry system, which does not work if a new PVCu Door was fitted.

      We recently had an emergency situation when one of the residents fell in their bathroom and Careline refused to provide the Access Code to a Paramedic who was sent by Social Services. The residents had been given a second pendant by Social Services which sent an emergency signal if the person fell over. The problem was that the Access Code to their own Key-safe next to their door was not the correct Access Code. I phoned Careline and was informed that I was not entitled to know the Access Code as I was only a resident. They refused also to give the Access Code to the Paramedic as they had not sent him. It was 40 minutes after the emergency call was received by Social Services that the Paramedic gained access to the flat.
      This was no thanks to Careline, we the residents had contacted a family member and was able to retrieve the correct Access Code. (40 minutes after the original emergency call) and gave it to the Paramedic.

      It was then that we found out that eventually Careline did provided the Access Code for our development, only it was the WRONG ACCESS CODE.
      The code had been changed when the House Manager was sacked in September 2012 and a new Combination Lock was purchased by the Area Manager (we paid the invoice for the Combination lock in October 2012.)
      I contacted Careline on Sunday the 01/09/13 at 18.00 hrs the following day as my neighbour was very concerned that the Emergency Careline had failed. It took 6 minutes for Careline to reply to my pressing the button and when I asked had they now the correct Access Code, I was informed that they would contact Peverel on Tuesday 03/09/13 for the correct Access Code. I asked had they an Emergency contact number for Peverel Retirement, Area Manager, the answer was NO WE DO NOT HAVE AN EMERGENCY CONTACT NUMBER FOR PEVEREL.

      With Peverel having the Wrong Access Code we the residents were at Serious Risk, if an emergency had arisen, as the only way to gain access would have been to break down the door, some recent replaced PVCu doors are designed not to allow easy access.

      I have sent emails to Janet Entwistle, Chris Owens and our Area/Regional Manger, no one has bothered to contact me or ask if the resident was OK.

      • Have a look on the Office of Fair Trading website under ‘What we do’. It is ‘independent’ of the government so the OFT isn’t accountable to anyone in particular though presumably it is funded by the government through taxation? The problem is it is not structured to deal specifically with consumers’ complaints; its primary task is to regulate fair competition between businesses and it is clearly failing to do the job for which it was set up. It operates like the former ineffective FSA….

        • fleeced.
          I have looked at the website of the OFT and it states:-
          Pursuant to s190(4) EA02 , the OFT may issue a non-action letter.
          This is a written notice to an INDIVIDUAL that he will not be prosecuted for the particular matter under investigation, if the individual satisfies certain conditions. For example the individual must:

          * Admit participation in the offence
          * Provide the OFT with all available information
          * Maintain full cooperation throughout
          * Refrain from further participation in the offence

          This does not mention a Limited Company it only mentions an INDIVIDUAL????

  3. Michael Epstein says

    Those with concerns about the position adopted by the OFT should make those concerns known.
    They can do this by contacting Cavendish.Elithorn@oft.gov,uk

  4. Michael Epstein says

    Typo, Delete , insert .

  5. Chaz

    Back on duty now…

    If there is an issue with an invoice that you think you should not be paying for, I would write to Peverel and ask for a copy of the contract for the door and check – is it insurance or a maintenance contract!
    If they have entered into a section 20 long term agreement without consultation with the leaseholders then they have done so illegally if you are all not aware of any agreement.

    See the link below to a PDF.

    http://www.lease-advice.org/documents/Service_Charges.pdf

    http://www.lease-advice.org/publications/

    Hope this helps, let us know how you get on and if no response from Peverel then I know somebody that will be able to write to them and make them respond!

    Also, write again to your local MP and point them to this site so that they can see for themselves what is happening.

    The OFT are not interested and that is clear by their actions… Michael has posted the email address to complain to above.

    • “They can do this by contacting Cavendish.Elithorn@oft.gov.uk

      I have posted on this before: Yes, a complaint can be sent to this address shown on the OFT website but unfortunately internal complaints systems in any organisation are rarely dealt with fairly. The police has an independent complaints system for this reason. Who or what has overall control over the OFT – that’s my question?

  6. Michael Epstein says

    I am reminded of the fuel surcharge price fixing engaged in by some airlines.
    Virgin Atlantic gave evidence and as a result avoided penalties.
    However, as part of the settlement they were ordered to refund the surcharges to customers.
    It should also be noted that in this case the price fixing occurred between huge international companies.
    Peverel were price fixing with two tiny companies and they were the instigators of the price fixing.
    Even if the OFT justify the immunity granted on the most outrageous technicality, they appear to have failed to comply with the guidelines for immunity.
    If they had provided the OFT with all the information, why did it take 2 years to begin the investigation?
    If they maintained full cooperation throughout, why do the OFT not know how many developments were affected by the price fixing?
    Why 4 years after the price fixing was supposed to have ended are Peverel still benefiting from the price fixing?
    Why was Mr A.D who held a very senior position within Cirrus during the period of the price fixing subsequently promoted by Peverel?

  7. My comments are going missing…… 🙁

  8. Karen
    You can receive my email address from Sebastian and my mobile number

  9. Comments posting problem sorted out now thankfully.

  10. Peverel Group was sold to Chamonix and Electra Partners in March 2012 with £ 25 Mil Loan from fro Royal Bank of Scotland. The Peverel/Cirrus price fixing took place in 2008/2009 ? and it would be a criminal offence under the Fraud Act 2006.

    So I think it may be better for Susan ( together with Times Newspaper reporter if possible) :

    1. to report a criminal offence committed by the Directors in 2009 at the Local Police Station ( Section for Commercial Crimes )

    2. to report same criminal offence to Companies House and ask those persons who were the Directors of Peverel Group in 2008 and 2009 to be permanently disqualified .

  11. Section 12 of the Fraud Act 2006 says :

    Liability of company officers for offences by company.

    (1)Subsection (2) applies if an offence under this Act is committed by a body corporate..

    (2)If the offence is proved to have been committed with the consent or connivance of—.

    (a)a director, manager, secretary or other similar officer of the body corporate, or.

    (b)a person who was purporting to act in any such capacity,.

    he (as well as the body corporate) is guilty of the offence and liable to be proceeded against and punished accordingly.

    (3)If the affairs of a body corporate are managed by its members, subsection (2) applies in relation to the acts and defaults of a member in connection with his functions of management as if he were a director of the body corporate.

  12. olie
    I thought the period was from 2005 to 2009 correct me if you need.

    • The offences reported by Susan may well have been committed during those years you mention but I would guess 2006 -2009 . BUT leaseholders at every block should investigate for themselves and make their own report to the Police Station .

      The leaseholders should point out that Peverel Group was conrolled by Consensus Business Group in 2009 when they file a complaint at the Police Station. The Peverel subsidiary companies managing your block probably have changed names and may not be so easy to locate the proper company listing at Companies House to identify the names of the Directors in 2009..

  13. Michael Epstein says

    Ollie,
    It has often been said that Chamonix and Electra Partners bought Peverel in 2012 with a £25m loan from RBS.
    But according to what i understand from Peverel accounts, Peverel are being charged between 9 and 15% interest on the money Chamonix and Electra Partners put in.
    That being the case, was it a genuine buyout, or was it basically a loan with ownership being used as a cover until Peverel could be sold?

    • Michael
      We were informed by Keith Edgar in March 2012 that Chamonix and Electra had purchased us at ABC as we were part of the Consensus Business Group.
      I emailed C.O. Head of Customer Relations at Peverel Services Ltd to check on who owns us, so we could go to Tribunal knowing who received the £8,000.00 in Commissions paid by Oval Brokering Services Ltd to Kingsborough Insurance Services Ltd, who then passed on this Commission to Peverel, which Peverel, I do not know for definite. But as a Managing Agent (MA), by Law, the MA should not benefit from the Service Charge Arrangements?

      To my surprise C.O stated that we at ABC were not part of the sale to Chamonix and Electra (C.E.), but were left over after the sale and still owned by Meridian, who had been purchased by YES, PEVEREL.

      We know Peverel owned us in 2006/07 as shown in the Expenses Files Invoices, for Management and Monitoring and there was no change in ownership? So what had changed? we were still in the same position as before the Sale to C. E. yet we now pay 20% VAT.

      When The Peverel Group known as Consensus Business Group was placed into Administration we were informed by Keith Edgar that we will not see any changes.

      The first thing that changed was we now had to pay VAT on Management Fees and Monitoring Fees of nearly £2,500.00 a year.
      I have checked the Expenses Files from 2006/07 to date and each Invoice for Management and Monitoring Fees are on Invoices that read Peverel Owned and up to 2012 VAT EXEMPT.

      • Chas,

        I believe the “Consensus Business Group” was the trading name of a group of companies controlled by the Tchenguiz Family Trust based in British Virgin Islands.

        This CBG group of companies includes Fairhold Group, Solitaire Group , Pemberton in 2006 , MCCarthy & Stone Group , Peverel Group in 2007 etc and other supplier based companies such as Kingsborough Insurance Services, Oval Insurance Group, Interphone Door entry systems etc. The Charter Quay website http://www.cqra.org shows the corporate structure of Tchenguiz Family Trust and identifies approx 400 different named companies.

        The purchase off Peverel Group was prev iously financed by Merryl Lynch ( later rescued by Bank of America in 2008) and I believe after the purchase, the freehold assets were detached and placed under another CGB group leaving the Peverel Group ( containg the remaining Management and Services Companies to shoulder 125 Mil Pds of bank debt and interest free loans of 594 Mil Pds owed by Proxima GR Properties ) . The Peverel Group was placed in liquidation in Feb 2011 and the front line management operating companies were rescued by Chamonix and Electra Partners with 25 Mil pds loan from Royal Bank of Scotland.

        For leaseholders in residential blocks of flats, they need to buy a copy of the freehold title from Land Registry Online ( costs 4 pds to download ) to identify their current and past freeholder and which bank has registered a loan charge over the freehold title.

    • Michael Epstein,

      Which “Peverel ” named company and company number controls the management group now ? Have you checked the names of the company’s shareholders for a match to Chamonix and Electra Partners ?

      If you think that Peverel is being made to pay 9% and 15% on funds invested by Chamonix and Elecetra Partners, has Royal Bank of Scotland agreed to such arrangement before agreeing to lend 25 Mil pds ? .

    • Ollie,

      I do not understand. To whom is the 9% and 15% on £62M being paid by Peverel Services Ltd?

      for the investment /purchase price paid ( on £62M ?) to the administrator (?) it would appear .

      How much interest pa, arrangement fees etc is being paid to whom?

      Is it paid to RBS by Peverel Management Service Ltd on £25 M or is it on £62M??

      Or is it paid to someone else?

      Electra invested /paid 53% and RBS 40% and Chamonix a mere 6% ?

      Yet Chamonix Knight Ltd own /control 51.19% of Knight Square Ltd the parent of Peverel Services Ltd.

      The share holders of Knight Square Ltd are approx

      34.80% Janet Entwistle
      13.94% Paul Lester
      51.19% Chamonix Knight Ltd

      Would directors /shareholders be Janet Entwistle,
      Andrew Hartley and Janet Crawford?

      So, to whom was the £25M RBS loan made? If Chamonix Private Equity does not own Peverel Management Services Ltd ? But if correct Chamonix Knight Ltd does?

      Can someone explain.

      • Michael Epstein says

        Concerened2,
        I will have a bash at explaining!
        Please bear in mind nothing is ever as it seems where Peverel are involved. It should also be noted that the buyout happened when Peverel were within hours of going into compulsory liquidation.
        So Peverel was purchased for £62m (this included £11.7m cash in the company). £25m was lent by RBS. This is charged at around 4% above libor (though Peverel have the loans hedged).
        The impression was given that debts were now down to a viable £25m.
        What was not generally known at the time is that the funds put in by Electra/Chamonix were being treated as a loan. The Electra/Chamonix investment is subject to interest rates of 15% senior debt and 9% junior debt. In the event of a Peverel collapse, senior debt means the lender has first call on repayments. Thus far, around £4m has already been taken out of Peverel to be given back to the “investors”. In addition £750,000 has had to be paid back to RBS.
        It would also appear that Electra has been paid a fee of £750,000 “for services”
        This indicates that there remains the possibility that a deal was done to save Peverel from being liquidated so that Tchenguiz could buy back the company.
        Electra/Chamonix buy Peverel and hold the company for 6 months, until Tchenguiz buys it back.
        For this, they receive £2m in interest plus a £750,000 fee.
        A quick “in and out” walk away with a tidy profit. Trouble is, it didn’t happen!.

        • Concerned2 says

          Michael Epstein,

          Thanks for your helpful explanation.
          Others have suspected that this was supposed to be a quick “in and out” deal so that

          Tchenguiz buys it back. Why did it not happen? Who put Peverel into liquidation and why?

          As well as perhaps banks, borrowers etc benefiting from bad debt tax write offs eg for 125 mil

          GBP plus 594 mil GBP owed by Proxima GR Properties Ltd; but owed to who?

          Proxima GR Porperties appears to be owned by Proxima Topco Ltd

          whose 94.30% shareholder is owned by Wiskay Ltd in BvD with one share holder.

          Are there tax benefits because from writing off bad debt?

          Can bad debts be written off more than once? by different entities? and in different jurisdictions?

          Was it because of such a paper and tax exercises why the SFO investigated?

          Should the liquidating company(ies), banks, directors as well as the liquidator have offered

          first purchase option to each and every resident?

          Can such “oversight” be reversed eg. by OFT and SFO or perhaps by others, who?

  14. Susan , Ed Davey , MP and Sir Peter Bottomley ,MP –

    How to search for the Directors of Peverel in 2009 for reporting the Peverel/Cirrus price fixing ??

    The controlling company of Peverel Management Companies during late 2009 was Peverel Group Ltd which was placed into Administration under Zolfo Cooper , Manchester in Feb 2011. This company was given a name change and lost its Peverel name link but you can search for the company under “previous name” at Companies House website to find its company number – 03073418. Then search for the company listed under this number and you will find final name to be “PGL Realisations 2012 Ltd”. I don’t know why the company name was changed before entering dissolution ?? Was it to cover up a mysterious waiver of loan debt of 594 Mil Pds owed by Proxima GR Properties Ltd ?

    After the company listing appears on the monitor screen , one can switch to access the list of past company filings and then it can be seen the Directors at 4 Nov 2009 are shown as below:

    David Edwards ( resigned on 11 July 2011
    Philip Cummings ( no resignation filed)
    Nigel Bannister ( resigned at 31 Mar 2011 )
    Michael Gaston ( resigned at 14 Jun 2010)
    William Procter ( resigned at 14 Jun 2010 )