Leaseholder evicted from iconic Coal Exchange building
The company which has been running Cardiff’s iconic Coal Exchange building as a hotel has had its lease terminated following major safety concerns and financial irregularities first exposed by Nation.Cymru.
In September 2023 we published shocking pictures showing how the building had been neglected to such an extent that part of it was literally falling apart. Some of the rooms were uninhabitable and in places the roof had disintegrated. During our visit to the building, a dead bird was on a corridor floor.
Located in the Butetown district of Cardiff, the Victorian Coal Exchange is a Grade 2* listed building. More recently it was a music venue, but was forced to close in 2013 because the building’s structure was no longer considered safe.
In 2016 it was bought by the Liverpool-based hospitality firm Signature Living, with financial assistance from Cardiff council. Ownership was passed to a newly created subsidiary company called Signature Living Coal Exchange, which devised an ambitious renovation programme and turned part of the building into a hotel.
However, the Signature Living group effectively went bust during the Covid-19 pandemic, leaving the Coal Exchange in limbo.
Its ownership is now complicated. A company called Eden Grove Developments, whose sole director is former Cardiff Labour councillor Ashley Govier, stepped in to rescue the building but a lease on it was granted to a limited liability partnership called Cardiff Exchange Hotel LLP, headed by businessman Anil Rai, of Eastbourne. In turn, Mr Rai’s company granted an operating contract for running the hotel to another firm he controlled.
Mr Rai, of Cardiff Exchange Hotel LLP, was previously a designated member [equivalent to director] of Focus Wealth Management LLP, whose licence to operate was revoked by the Financial Conduct Authority in 2015 after the firm failed to meet its financial commitments.
In September we saw documents showing that earlier in 2023 HMRC was pursuing the Exchange Hotel for unpaid VAT totalling more than £160k and unpaid employer national insurance contributions of more than £132k.
A further document showed that in April 2023 an insurance policy on the building was cancelled because the insurer had not been made aware that it was in a poor state of repair.
We also spoke to investors who thought they would receive a guaranteed return for participating in a scheme that saw them become the owners of individual hotel rooms they bought for up to £110k. In some cases Mr Rai’s firm had been letting out the investors’ rooms to paying guests and keeping the revenue.
We saw evidence of many thousands of pounds being transferred to Mr Rai’s company. We also saw a court summons issued to Mr Rai’s Coal Exchange Operations Ltd on September 4 for unpaid business rates and costs totalling £81,690.94.
Since our visit to the hotel in September, Mr Rai’s company has had prohibition notices served on it by South Wales Fire and Rescue Service covering a range of breaches, including: “Emergency routes and exits could not be used as quickly and as safely as possible” and ”The automatic firefighting equipment is inadequately commissioned or maintained”. Structural problems were also identified that compromised the building from a fire safety point of view.
On December 27, Mr Govier’s company, the freeholder, took back possession of the Coal Exchange, and told Mr Rai’s firm that it had no right to enter the premises.
Mr Govier told Nation.Cymru on December 31: “We have offered the operator the chance to stay in situ to minimise disruption on a temporary licence while we conduct a full review including health and safety on the site to get underway next week.
“We also told them to cease trespassing in rooms that belong to bedroom investors. A written agreement must be established with individual bedroom investors before there is any further use of them. We also need to check the conditions of the rooms and have invited investors to come and see their rooms.
“We hope the hotel will continue to function in the long term. During January it will be functioning only at weekends.
“We made sure that weddings that had been booked could go ahead but some room reservations had to be cancelled because the operator did not have permission from the bedroom investors to let the rooms out.”
Mr Rai did not respond to messages we left for him.
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