‘Businessman robbed us of our hotel’

Martin Shipton

A couple have made a formal complaint to a global accountancy firm, claiming they were duped out of the hotel they owned by a controversial businessman.

Tony and Jane Jay have paperwork they say proves that David Lewis conned them out of the Maes Manor Hotel at Blackwood with the unwitting assistance of Deloitte, two of whose employees became joint administrators of the hotel company.

Mr Lewis ran the former Ffos-y-fran opencast mine at Merthyr Tydfil, and there are concerns that he is trying to avoid paying more than £90m to restore the site, leaving the clean-up cost to the public sector.

In a letter to Deloitte’s senior management, seen by Nation.Cymru, Mr Jay states: “The whole sorry saga is multi-layered and complex. To be candid with you from the outset, we believe that [two named Deloitte employees] were negligent in failing to apply the appropriate due diligence while having the wool pulled over their eyes by David Lewis.

“I have a background of being employed in hotel management. In around 2003, having worked at the Maes Manor Hotel for the previous five years, was offered by the owner, David Boden, the sole director of Jackson Properties Limited (JPL), the chance to take it over via a lease agreement.

“We agreed a 10-year term, with an initial rent of £75k per annum. My wife and I ran the hotel through a company we formed called Monnington Leisure Ltd. Thereafter, we operated successfully and were able to draw a good living and associated lifestyle.

“As a result of our hard work, the hotel, located in a picturesque part of Blackwood, gained a stellar reputation as a venue for weddings, in view of the spacious grounds and beautiful backdrop. Life was good. We resided in a detached property. We bought some horses. We provided employment for local people.”

David Lewis then arrived on the scene. He was a business partner of David Boden in an unrelated civil engineering business. He had had prior input in JPL, but had resigned as a director of the property company in 1999.

Mr Jay writes: “Notwithstanding what appeared on the face of things to have no proprietary interest in the Maes Manor Hotel, he nevertheless turned up at the hotel in late 2009 or early 2010, suggesting that I and my wife Jane buy the hotel. While we were happy to continue as we were, in view of the profit generated, the idea of owning the hotel did appeal to us.

“We assumed, in view of David Lewis taking the lead, it was with the agreement of David Boden. We agreed to buy the hotel for £1.75m. Obtaining funding did prove problematic. David Lewis introduced us to a commercial manager of Barclays Bank, based in Cardiff. Barclays agreed to loan us £1.5m over a 15-year term. The outstanding balance of £250,000 was added as a loan payable to JPL at the rate of £25,000 over a 10-year period. That was what we were led to believe at the time.

“The legal side of the purchase was dealt with by a solicitor from Cardiff. I was introduced to him by David Lewis and found it somewhat unorthodox, but he acted for both vendors and us as purchasers. Completion took place on March 31 2010.”

‘Shareholders’ Agreement

Mr Jay went on to state that Barclays were keen to publicise their funding of the hotel, and a story appeared in a local paper. He wrote: “Following completion of the sale, David Lewis turned up at our house with what he stated was a Shareholders’ Agreement, giving him 51% of shares in the hotel as security for the £250,000 loan. We did not obtain any legal advice as we were somewhat ambushed by him turning up and at that stage trusted Lewis without realising we were putting our heads in the mouth of a shark. We retained 49% between us. Lewis had 51%.

“However, we have since discovered that Lewis did not have any authority to agree this share division in Monnington Leisure Ltd, as he was not a director of JPL and had not paid any hard cash to JPL to cover the £250,000. In view of the foregoing, his request for security was flawed and fraudulent.

“It is clear that Deloitte obtained no proof of funding from Lewis and clearly had concerns about abbreviated accounts, which should have been a red flag.

“Following completion and the publication of the press release, Lewis began displaying worrying traits towards us. He was incandescent that our purchase had hit the newsstands and online. We were baffled by his conduct, which became increasingly hostile and intimidatory.

“We became increasingly uneasy and quizzed Boden when we had to start paying the instalment of £25,000, as we had received no paperwork or dates for payment. Boden reassured us: ‘Don’t worry, it will be all right.’

“We went on holiday for two weeks in August 2010. We went abroad. Upon our return, we were met with a torrent of abuse from Lewis, accusing us of reneging on paying the £250,000 loan. We reiterated to Lewis what Boden had told us. With no information about where to send the payment, we had reached an impasse.

“Lewis kept up his barrage of abuse throughout the summer following our return from holiday, culminating in his advising us he was calling in his security, which we now know to be fictitious, as he had not provided any. We were obviously not aware of this at the time.

“Unable to deal with the aggressive tactics of Lewis which were impacting on our health, we were effectively bullied out of the hotel. We left in September 2010, just months after completing the purchase. We were devastated.

“We now know that during this period, Lewis, a gambling addict, had lost around £600k in a casino in Monte Carlo. His wife Jayne paid the debt with assistance from David Boden. We understand that the price of funding this gambling debt was Boden receiving in return a higher percentage of shares in David Lewis Civil Engineering Ltd of 20%, which rankled with Lewis. At the same time his wife left him, upset at his reckless gambling and knock-on effects for her and her financial position.

“Lewis was impecunious at the time – his only financial salvation was wresting control of the hotel from us so he could have access to the tills and monies received for weddings, functions, etc.

“In the course of my enquiries, I have discovered that Lewis is a convicted fraudster linked to his gambling addiction, which led to his nefarious strategy with us to fund his habit and to try to restore his marriage, which worked as he then reconciled with his wife, Jayne.”

Serious errors

Mr Jay goes on to point out what he says were serious errors made by Deloitte in the handling of the case. In writing his analysis, he was able to rely on information disclosed by Barclays in response to a subject access request made by him in line with the Data Protection Act.

The figure of £557k, which Lewis alleged was provided by JPL, was overstated by £350k.

At the time of the purchase of the Maes Manor Hotel, Lewis did not have an option on any shares in Monnington Leisure Ltd, nor was he a director or shareholder in that company. However, in a Companies House document submitted on April 27 2011, Lewis claimed that the date of his appointment as director of the company was March 31 2010, 13 months earlier. Notification of a director’s appointment should be made to Companies House within 14 days.

Equally, the option on 51% of the shares in Monnington Leisure Ltd as being “security” for David Lewis would only be valid if Lewis had provided any money or placed himself at financial risk. He did neither.

Mr Jay writes: “On November 17 2011, the date of sale of the assets and business of Monnington Leisure Ltd, both Barclays Bank and administrators believed they were overseeing a transaction between Barclays Bank and Maes Manor Hotel Ltd, owned by David Lewis. In reality, the transaction took place between Barclays Bank and Maes Manor Hotel Ltd, owned by Jayne Lewis. This happened because on September 29 2011, David Lewis transferred all of his shares in Maes Manor Hotel Ltd to his wife, Jayne Lewis, without notifying Barclays Bank or Companies House until six months later on March 27 2012.

“From March 20 2012, Jayne Lewis became the sole owner and director of Maes Manor Ltd. At the date of the prepack sale on November 19 2011, no money was paid by Maes Manor Hotel Ltd to Barclays Bank. Instead, Barclays accepted a worthless guarantee for £350k as collateral, believing that Lewis was a man of financial substance.

“By June 2012, Lewis was insolvent and his personal financial affairs were being managed by insolvency practitioners.”

‘Duped’

Mr Jay said: “Deloitte and their employees were completely duped by David Lewis. As such we have requested they self-report the matter to their regulatory body and the Serious Fraud Office.

“The conduct of David Lewis severely impacted the health and welfare of my wife and myself at immense personal cost, and Barclays Bank who lost £1.2m.”

We asked Mr Lewis to comment. He did not respond.

Mr Boden also did not respond to our request for comment.