MYSTERY and a shroud of silence continues to surround what is happening to two Thurrock Council wholly-owned companies – which may now be operating outside the law, risking a significant a fine for the authority.

The council is staying tight-lipped about all matters related to its two established regeneration companies but it seems possible the changes to Thurrock Regeneration Ltd and Thurrock Regeneration (Homes) Ltd may be related to a half million pound deal the council has just struck up with property consultancy Lambert Smith Hampton (LSH).

They are being paid £580,000 for a year's work to deliver to help deliver a regeneration and housing development programme for the council. The project appears likely to be centred on the £6 billion Purfleet regeneration project - but the new consultants have already been involved in a wider brief in the borough.

LSH said the scope of the contract is still to be confirmed, but will involve site-specific planning work, largely focused on housing delivery, as well as co-ordinating bids for central government funding from sources including the Town Centres fund and the Future High Streets Fund.

Other services to be provided will include acquisitions, disposals, quantity surveying and building surveying.

Neil Parlett, director of planning, development and regeneration at LSH, said: "With pressure on local authorities to quickly deliver new housing, employment, community and infrastructure schemes, there is an onus on finding innovative approaches to working collaboratively".

The council's regeneration portfolio holder Mark Coxshall says: "It is important that the council can provide the right level of resource to be able to successfully deliver our key development programmes."

LSH has a track record of working with Thurrock Council, having been paid £164,000 as consultants on the controversial civic offices extension project, £425,000 for work related to a lease on Grays multi storey car park and £123,000 for land procurement advice.

Al of those deals took place while the two internal regeneration companies were still fully functioning.

Earlier this month Thurrock Nub News reported that the three directors of the two companies, Thurrock Regeneration and Thurrock Regeneration (Homes) Ltd had quit their posts in August and had not been replaced.

While there is scope within the rules for limited companies to operate for very brief periods without directors because of extenuating circumstances, it would seem that - approaching seven weeks on - new directors should have been appointed to avoid a breach of the law.

Three people who sat on the boards of both companies terminated their directorships in August – and they have not been replaced. Just one council employee, Helen McCabe, who is the development manager and company secretary of both companies, remains.

Those who left their directorships with the company were the council's strategic resource accountant Michael Jones, its assistant director of housing Carol Hinvest and Anna Eastgate, who is an assistant director with responsibility for the Lower Thames Crossing and transport infrastructure projects. She has been in charge of the over budget and much-delayed A13 widening and Stanford rail station projects.

One reason directors might leave a company is if it was in serious financial trouble or is facing problems with its business. That might mean financial liability or fines but directors who have handed in notice would not be liable.

When directors resigns leaving a company without management, the company itself will be in breach of the Companies Act 2006 and could receive a direction from the Secretary of State to appoint directors.

Any such direction would advise the company of the statutory requirement which has been breached, what the company must do to comply with the direction (which will be to make the necessary appointments and notify the registrar of companies of the appointments) and the time period within which it must do so. The period will be within one and three months of the date of the direction. It is not known if the two companies have received any direction but if it has an fails to comply they commits an offence together with every officer of the company who is in default, in this case Ms McCabe who might be liable to a fine.

Fines could not be levied on former directors. Sources within the council told Thurrock Nub News that the three senior members of the council staff resigned their positions with the two regeneration companies on the instruction of the council's chief executive Lyn Carpenter. This has not been confirmed by the council.

The council has been asked to explain why the directors left their positions and what arrangements are being put in place for the future – and why the council appears to be running the risk of incurring financial penalties for not having directors in place?

However, the council has declined to answer our questions other than repeating a previous earlier statement that says: "Thurrock Council is aware that the three directors of Thurrock Regeneration Limited and Thurrock Regeneration (Housing) Limited submitted their resignation as directors of both companies with effect from 31 August 2020."

Questions about what is happening by councillors about what is happening have also been blandly batted back. An internal memo by director of place Andy Millard, acting under instruction from Ms Carpenter, says: "Whilst the companies can operate for a short period without directors, the council needs to ensure there are new directors in place to continue current operations and support the delivery of new homes.

"Options for the future strategy of these companies are currently being considered and will be reported appropriately at the relevant stage."

Senior members of the council's ruling cabinet with responsibility for finance and regeneration have been asked to comment but have also declined to do so to date.