In a shocking turn of events, Thurrock Council, a local authority in south-east England, has accused Liam Kavanagh, a Dubai-based businessman, of misappropriating approximately £150 million from funds the council invested in solar farm-backed bonds. The allegations, detailed in recently publicised High Court papers, shed light on the council’s dealings with Kavanagh between 2017 and 2020, which ultimately led to the authority’s bankruptcy in 2022.
According to the court documents, Thurrock Council invested nearly £400 million in bonds backed by British solar farms through deals with Kavanagh and his company, Rockfire Capital. The initial investment amounted to almost £270 million, with the council claiming it put in additional funds based on “fraudulent misrepresentations” by Kavanagh and Rockfire. The council, which accumulated substantial debts to finance these investments, also alleged that Kavanagh diverted some of the money for personal gain.
The court filings accused him of spending £13.7 million on a yacht, £9.1 million on a Bombardier jet, and £20.75 million on a 232-acre country estate in Hampshire. Thurrock Council further claimed that Kavanagh intentionally provided “completely unrealistic” electricity pricing assumptions to a third-party valuer, the Association for Public Service Excellence (APSE), resulting in an overvaluation of the assets.
In an email cited in the court filings, Kavanagh dismissed concerns raised by an employee about the pricing assumptions, stating that the deal with the council was a “very long term play” and that the council could “accommodate drops in income” due to various factors. Kavanagh, in a written statement provided to the Financial Times through his lawyers, vehemently denied the allegations and argued that Thurrock’s claim had not been validly served. He has asked the High Court to dismiss the claim, asserting that the court lacks jurisdiction. However, if the court allows the claim to proceed, Kavanagh has stated that he will present “a full defence.”
The council’s dealings with Kavanagh have left Thurrock as one of the most heavily indebted councils per capita in the UK, with a budget deficit for the 2022-23 year projected at £470 million, more than three times its annual spending. The authority, which was under Conservative control throughout its dealings with Kavanagh, is now led by the Labour party following their victory in the May elections. John Kent, the Labour leader of Thurrock Council, emphasised the council’s obligation to residents, stating that they will “leave no stone unturned” and “vigorously pursue all available legal avenues” to recover as much money as possible to help the council regain financial stability.
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