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Coal Exchange workers release details of irregular payments

30 Jan 2024 5 minute read
The Coal Exchange in Cardiff. Photo Nation.Cymru

Martin Shipton

Angry workers who lost their jobs when a hotel in Cardiff’s iconic Coal Exchange shut down suddenly have released documentation which suggests that more than £1.3m was taken in revenue by a firm that wasn’t entitled to the money.

The 77 former workers are owed money in unpaid wages by Coal Exchange Operations LLP, which suddenly closed the hotel, accusing the firm which owns the freehold of the building of depriving it of revenue.

In fact, the revenue dried up because the operating company was stopped from taking any more money that should have been paid to individuals who had bought rooms in the hotel as an investment.

Nation.Cymru has reported extensively on the long-running problems affecting the Coal Exchange, a Grade 2* Victorian listed building in the Welsh capital’s Butetown district.

On December 27 it was repossessed by Eden Grove Developments, which owns the freehold and whose sole director is former Cardiff Labour councillor Ashley Govier.

Prohibition notices had been served on the operating company by South Wales Fire and Rescue Service in respect of serious health and safety issues affecting the building, part of which had collapsed.

Liquidation

For a brief period the operating company carried on trading, occupying the building on a week-by-week basis.

But the hotel was shut when Eden Grove insisted that the revenue from investor-owned rooms be paid to the individuals rather than the operating company.

Workers were told the operating company would go into voluntary liquidation, but that has yet to happen, leaving them in limbo.

The former employees have written to insolvency practitioners Leonard Curtis, who are handling the liquidation of Coal Exchange Operations LLP, which is controlled by Eastbourne businessman Anil Rai, whose checkered business history we have previously reported on.

The Coal Exchange is the third of Mr Rai’s firms to have been put into liquidation.

Public records show that in 2013, his company Focus Wealth Ltd was put into liquidation with a net deficiency of more than £276,000. Of that, more than £83,000 was due to the Inland Revenue.

In 2021, his company Focus Wealth Consultancy Ltd was liquidated with an estimated deficiency of more than £171,000, including more than £41,000 owed to HMRC in respect of PAYE payments and £80,000 in corporation tax.

In addition, Mr Rai was previously a designated member of Focus Wealth Management LLP, whose licence to operate was revoked by the Financial Conduct Authority in 2015 after the firm failed to meet its financial commitments.

Focus Wealth Management LLP was struck off the Companies House register in 2019 after failing to file its accounts.

The ex-employees’ letter sets out details of what they consider to be irregular payments.

Included in the material sent to Leonard Curtis is a spreadsheet which details revenue for every room in the hotel from May 2022 until December 2023.

Some 46 of the rooms are owned by individual investors, yet over the period concerned a total of £1,340,067.11 was paid to the operating company.

Bedroom revenue 2023

Duties

In their letter to Leonard Curtis, the former employees state: “Just for the record no staff member at the Exchange has ever signed a nondisclosure agreement and they are all protected by whistleblowing policies that cover them.

“It was on Monday January 15 that Mr Rai was telling staff it would be open for the weekend. He then emailed all the staff on January 17 informing us of the company ceasing to trade and that he was placing the company into the liquidation process.

“Mr Rai then went on to offer staff money for carrying out duties for him, for example counting stock, even though he had already terminated us via email. If there were positions available for work should there not have been a consultation process?

“The weekly paid staff who should have received their pay on January 19 had all received their payslips the same day they received the email from Mr Rai. These weekly staff are in the main the lower paid of our workforce and depend on their money for their families.

“They were not paid on Friday January 19 as they should have been. Amongst those staff are two ladies on maternity pay who were left all weekend with no funds for their families.

“One is a 17-year-old single mother with a three-month-old. Let’s hope she is mentally strong enough to get through this period of hardship and she is able to afford food for her baby.”

The letter goes on to detail allegedly irregular payments made out of the hotel’s revenue, including some to an unrelated financial advice company controlled by Mr Rai. It asks for funds to be released to pay the former employees what they are owed.

Mr Rai has not responded to our requests for comment and Leonard Curtis has not added to a statement it released previously which said: “The designated members [equivalent to directors] of Coal Exchange Operations LLP [Limited Liability Partnership] have engaged Leonard Curtis to assist with placing the LLP into creditors’ voluntary liquidation.

“The LLP made all employees redundant on January 17 2024 and issued redundancy letters and a fact sheet to assist. Leonard Curtis has engaged employment agents to help with this matter once appointed as liquidators, assisting former employees to support redundancy claims and associated queries.

“Designated members of the LLP have been encouraged by Leonard Curtis to contact customers to confirm their rights for claiming any deposits/refunds from bookings or events which will no longer be honoured. There is no further comment to make at this stage.”

Eden Grove Developments has hired engineers to investigate what work needs to be done to make the Coal Exchange safe. It is also seeking a new operator to run the hotel and hopes that some of the former workers will be re-employed.


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Linda Jones
Linda Jones
1 month ago

Such a shame for all involved. It seems no checks were made on Mr Rai’s previous record of running or failing to run businesses before allowing him to run the Coal Exchange. So much corruption and outright swindling going on in plain sight in the UK.

Hywel
Hywel
1 month ago

There should be a limit on serial IVAs (bankruptcies), with a ban on setting up further companies without settling previous debts.
I’m surprised HMRC doesn’t crack down on what appears to be scams like this.

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