Council files legal papers in battle to claw back millions from dodgy dealer Liam Kavanagh.

By Nub News Reporter 15th Aug 2024

Dealings with Liam Kavanagh led to the downfall of chief financial officer Sean Clark and the catastrophic collapse of Thurrock Council
Dealings with Liam Kavanagh led to the downfall of chief financial officer Sean Clark and the catastrophic collapse of Thurrock Council

THURROCK Council has launched its legal bid to claw back millions from dodgy bonds dealer Liam Kavanagh.

The flamboyant entrepreneur, who has fled the country and now lives and operates his business dealings in Dubai, was directly involved in selling around £150 million of bonds in his own companies to Thurrock Council which sought to make a profit by speculating in financial markets.

The scheme went disastrously wrong, landing the council with a debt of around £1.5 billion and it was effectively declared bankrupt in 2022, prompting a government intervention.

The council faces years of austerity and cost-cutting as it attempts to balance its books and pay off the debt – but it is hoping that a legal move against Kavanagh could recoup millions.

The council has issued a claim against Kavanagh and his company Rockfire Capital in relation to nearly £400mn it invested in bonds in solar farms in deals brokered with Kavanagh between 2017 and 2020.

The council is claiming it put in further money on the basis of "fraudulent misrepresentations" by Rockfire and says Kavanagh used some of the money to make purchases largely "for his personal benefit".

Documents now lodged at the High Court by Thurrock Council accuse him of diverting funds to spend £13.7mn on a yacht, £9.1mn on a Bombardier jet and £20.75mn on a 232-acre country estate in Hampshire.

The papers say Kavanagh deliberately caused "completely unrealistic" electricity pricing assumptions to be provided to a third-party valuer, Association for Public Service Excellence, which led to the assets being overvalued.

Kavanagh is reported to be ready to counter the allegations, which he 'strenuously denies'. He says Thurrock's claim has not been validly served and he has asked the High Court to throw out the claim on the basis that the court does not have jurisdiction, and that he would put forward "a full defence" if the court did allow the claim to proceed.

Thurrock Council leader Cllr John Kent, says: "We have an obligation to Thurrock's residents to make sure that we leave no stone unturned and vigorously pursue all available legal avenues to recover as much money as possible to help Thurrock Council get back on a firm financial footing."

Councillors on the authority's Investment Advisory Panel, were last briefed on the state of its finances and bids to recover lost money at its Investment Advisory Panel meeting on Tuesday, 2 July – where discussions about the prosed legal action against Kavanagh were discussed in exempt session.

However, a summary of other financial recovery plans were discussed and are minuted here

     

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