In this final piece (for now) we look at at very specific part of the time line in the P & R potential £1.5 million pound fraud which came about as a result of failings of previous management and poor governance at the subsidiary, of Bilby Plc. Poor management and poor governance of East Kent Housing (EKH) by the four Councils, who own EKH, has also been substantiated.
In Feb/March 2018, EKH employed a Chartered Surveyor who was tasked to discover if evidence of overcharging by P & R had happened. His report strongly suggested that it had.
In May 2018, East Kent Audit Partnership began an audit on East Kent Housing management of the contracts they managed for Canterbury, Dover, Folkestone & Hythe and Thanet Councils. This was released in Oct 2018 to each of the Councils. However, the first draft in July 2018, was discussed with EKH former Chief Exec Deborah Upton and former Director of Property Services, Mark Anderson, to agree factual accuracy. This report made it clear that overcharging was more likely than not, intentional rather than error.
In early July 2018, Folkestone & Hythe District Council’s robust financial systems did not identify the overcharging in 2017/18. We know the Council did not have robust financial systems as it was impossible for the Council to discover overcharging. We know this because the Council stated:
The Council does not hold a list of all overpayments and I am therefore not able to provide it to you. We have explored the available routes but we neither hold this information nor are able to generate it.
In July/August GCS undertook a desktop report and they too concluded that overcharging was more likely than not, intentional rather than error.
The Councils too became aware of potential overcharging/fraud in late August 2018, yet the Council continued to pay P & R even though it was “established the Council’s payment processes (invoices being submitted by the contractor (P & R) direct to the councils finance departments) did not reflect the process set out in the contracts (with each of the councils). This resulted in contractor (P & R) submitting invoices which are not valid under the contract”; and being paid in full by the Council. The amount of this irregularity for Folkestone & Hythe District Council in excess of £200,000.
P & R were responsible for annual gas safety checks, boiler installations and servicing as well as providing a 365 day, 24 hour emergency service.”. The value of the contract over five years was worth £27 million. P & R are ultimately owned by Bilby Plc a company quoted on the Alternative Investment Market (or AIM market) based in London
“Phil Copolo (pictured) was the former Deputy Chairman of Bilby PLC. He founded P & R in 1997 and in 2014 started Bilby PLC who became the owners of P & R.
Bilby Plc was registered on the Alternative Investment Market (or AIM market) based in London. Global witness has said of the AIM Market, “it has provided a home to unscrupulous firms that benefit from the wealth and cachet a London listing brings while continuing to operate in the shadows.“
Now we mention this because by the first week in Sept 2018 three reports had pretty much concluded that overcharging was happening and it might be a potential fraud. Now by sheer coincidence on 4 September 2018, Phil Copolo, founder of P&R and Deputy Chairman of Bilby, retired from the business and at the same time Leigh Copolo, Group Operations Director, resigned from the Board and left the business. Concurrently Phil Copolo and Leigh Copolo sold their entire holdings of 12,596,896 ordinary shares of 10p each, representing 31.26% of the Group’s total issued share capital, at a price of 100p, trousering £12.6 million between them.
On 3rd Oct 2018, the East Kent Audit Partnership report was released to the Councils. It too concluded that overcharging by P & R was more likely than not intentional rather than error.
Now the Council’s paid P & R £5.8 million between the start of the Contract on the 1st April 2017 and the termination of the contract on July 3rd 2019; and an estimated 26% of the contract was overcharged the Council’s claim. In money terms that’s £1.5 million.
So as we know the Council could not generate overcharging payments on their system, nor did they hold the information. This then begs the question: how many other contractors have overcharged our Council which they do not know about?
We honestly believe – and this is an expression of opinion, Mr Copolo was tipped off about the potential fraud and that these tip offs did not just emanate from East Kent Housing, but from inside our Council too. Evidence we have seen strongly suggests this. This would suggest collusion. We have a pretty good idea who these people might be.
The Shepwayvox Team
Journalism for the People NOT the Powerful