Xmas is always a busy time for Michael Stainer (pictured below), quite apart from making sure the Grand provides its usual range of activities for the festive season. As the director of multiple companies trading out of the Grand, according to Companies House, he likes to ensure that all their accounts are filed promptly, as befitting a chartered accountant.
Obviously there is one company less than previously, as the Grand Folkestone Ltd is in liquidation, courtesy of HMRC. We are assured that there is a very robust investigation being carried out by the Insolvency Practitioners, Macintyre Hudson on behalf of the Official Receiver, whose remit is to report on the conduct, or misconduct, of directors and to recover assets to pay the debt.
We cannot comment on whether or not there might have been a connection between Mr. Stainer’s other enterprises and the liquidation of the Grand Folkestone Ltd. The findings of the two Tribunals that found in favour of HMRC suggest that there was, and to this day, anyone doing business with “The Grand” would not find it easy to know which commercial entity is actually taking his or her money as “The Grand” does not exist as a trading entity, merely as a trading style. All the companies trading at the Grand have two things in common: Michael Stainer is the director and their registered address at Companies House is the Grand.
To found out what really goes on therefore, we must have recourse to the filed accounts, and here the problem starts, Mr. Stainer files micro-entity accounts. According to the Government website:
Micro-entities are very small companies. Your company will be a micro-entity if it has any 2 of the following:
a turnover of £632,000 or less
£316,000 or less on its balance sheet
10 employees or less [our emphasis]
If your company is a micro-entity, you can:
prepare simpler accounts that meet statutory minimum requirements
send only your balance sheet with less information to Companies House
benefit from the same exemptions available to small companies
Hmmm…. As the accompanying picture shows, courtesy of the Grand’s Facebook page, there are at least 40 employees, all subject to PAYE and NIC deductions.
So what do the balance sheets tell us? In truth, not a lot, aside from a mountain of debt. We showed them to an accountant friend and he stated:
There are no trading accounts, only balance sheets so impossible to see what’s going on and hard to put context around the current debt (I.e we don’t see the annual profit & loss and income).
Let’s look at the companies in question:
This excludes what HMRC hope to recover from the liquidation of the Grand Folkestone Ltd. Its last accounts, filed for the year ending March 30th 2015 showed a balance sheet entry of -£991,584. Does this include the debt to HMRC as this was only finally quantified in mid-2016 at around £814,000.
Aside from this, the most interesting/worrisome debt is the £736,928 shown on Hallam Estates Ltd accounts. Why so interesting? This is the company which owns the freehold of the Grand, the only jewel in Michael Stainer’s somewhat bedraggled crown. The building shows up on the accounts as a fixed asset with a value of £537,366. But to whom is this debt owed? For what? Could this debt be called in and leaseholders find they have a new freeholder? This is what happened back in 1996 when following Barclays Bank repossession of the Grand from Michael Stainer, the building was sold on to Hallam Estates Ltd. which was formed in 1995.
Leaseholders at the time had no idea that Stainer was still “in charge” as the founding director was Mr. Neil Howard with Mrs. Joan Howard as company secretary. However, the paperwork was completed in Stainer’s handwriting. In March 1998, a new director was appointed, Mr. Roy Seidenbird. Interestingly, Stainer is now shown as the contact for any Companies House queries. He only becomes a director in his own right in December 2000.
Such a sale from over the heads of leaseholders couldn’t happen today. Firstly, following the appointment of a manager and receiver following the removal in 2015 of Michael Stainer and his agent, Roddy Baker of Fell Reynolds from day-to-day responsibility for managing the residential areas of the Grand, the First Tier Property Tribunal has greatly strengthened the protection afforded to the leaseholders. Secondly, recognition by the Tribunal of the residents’ association, AORG, has unified the majority of leaseholders in their determination to see their rights protected, and in particular, that delinquent leaseholders pay their share of the service charges. This takes us back to the Stainer commercial empire and its many enterprises.
Its debts suggest that it is only the generosity of creditors that allow them to survive. It has already been established by the Tribunal that the commercial enterprises pay not one penny to maintain the building in which they trade, and that their activities are partly subsidised by leaseholders who do pay. Furthermore, there is one additional trading enterprise that freeloads off the ‘generosity’ of leaseholders, and maybe also the ratepayers of Folkestone. These are the 19 flats privately owned by the Stainers and used as holiday lets which will be subject to a Tribunal hearing on January 24th and 25th to determine whether, and how much, the Stainers need to pay in service charge arrears. From sources extremely close to Mr Stainer it is alleged the claim is for £167,000 plus interest.
Interesting times for Michael Stainer.
The Shepwayvox Team