In a twist to the latest cartel case, one of the agents named as being found ‘provisionally guilty’ is in administration.
Richard Worth Ltd went into administration last November after trying to recover from a £2m fraud case.
The administrator, Debi Harvey of Harvey Insolvency and Turnaround, in Newbury, Berkshire, notes in a report this January that in 2015, the former financial controller of the company, Julian Kremer, was convicted of defrauding it to the tune of £1,981,916.
The report says that when Kremer’s pension matures, the company should be entitled to £100,000 under the Proceeds of Crime Act.
It was a notorious case, covered at the time by EYE, where the court heard of the financial crisis caused to the firm and its director Steve Jones.
The administrator’s report notes that after the case, the company downsized its branches and passed its letting services to a competitor – ironically Romans, which is also named in the ‘cartel’ case.
Richard Worth went on to reopen a branch in Bracknell, attempting to build back what had been lost. Initially, says the administrator’s report, this was successful, but in 2018 the market fell away and hit the company hard.
The administrator’s report states that preferential creditors – five former employees who had been made redundant– are owed just under £20,000. Unsecured creditors are owed almost £96,000.
The Richard Worth name is still going after being purchased in a pre-pack last November by Adelfas Property Group.
Yesterday, a statement requested by EYE from director Steve Jones said: “Richard Worth Estate and Land Agents is a trading style of Adelfas Property Group Ltd and as pointed out by the CMA in its statement is not one of the companies under investigation.
“The internal checks and procedures of Adelfas Property Group will ensure that it will never be placed in a position that could be construed as anti-competitive.
“It would however be remiss of us not to recognise that Richard Worth Ltd (in administration), from whom we bought the name and assets, is subject to the CMA’s investigation, but this is not a matter we are able to comment on.”
Meanwhile, all the agents named by the Competition and Markets Authority will now have to consider the CMA’s findings.
All four – Romans, Prospect, Richard Worth and Michael Hardy – have been found provisionally guilty of breaking competition law.
They have until September to respond, both in writing and orally. The CMA will then consider the responses before coming to a final decision.
The CMA alleges that the agents agreed to fix a minimum commission fee; exchanged confidential pricing information; and held meetings, colluding to enforce and maintain the agreed minimum rate.
The four are all big names in Berkshire and beyond. Romans in particular is a well known brand nationally, having won a number of highly prestigious awards. It has also been expanding via acquisition and is now part of the national Leaders Romans Group.
Romans and Prospect were quick to release statements after the CMA yesterday made its announcement.
Romans said it had itself notified the CMA after becoming aware that some sales executives had acted in a manner “totally contrary to the standards and values of the company”.
Prospect said it appeared that it had “inadvertently” broken anti-competition law during the 2008 recession.
Michael Hardy has since said it feels unable to comment until it has worked through full details of the allegations being made against it.
The statement regarding Richard Worth is in full above.
Fines – should they be levied in this case – could be steep and the fall-out painful.
In the Burnham-on-Sea case, four agents were fined over £370,000 between them. A fifth was not fined, as it was the first company to confess its participation in the cartel. Subsequently, three directors of the firms involved have agreed to be banned as directors of any company.
In a previous case – and physically much closer to home for the four Berkshire agents – members of the Three Counties Estate Agent Association were fined £735,000.
Three members were agents – Countrywide brand Hamptons, Castles and Waterfords – and a fourth was a local newspaper publisher. Active around Fleet, Hampshire, they had agreed to prohibit the publication by agents of fees in the local paper.