Goodwin runs into money trouble (again)
Tuesday 09 November 2010
Sir Fred Goodwin, the former RBS chief executive who was pilloried for his role in the financial crisis, ran into trouble again yesterday when the international architects he advises admitted cash flow problems.
RMJM, the global architectural consultancy behind the Scottish Parliament and St Petersburg's Gazprom Tower, hailed the appointment of its new adviser in January, praising his "rare [skill] set" and "huge amount of international business experience".
Yet just 10 months on, the business is struggling to pay its bills and has seen a mass exodus of senior staff following a restructuring in the way it pays its staff. Eighty people have left the firm's Hong Kong office, including Barry Shapiro, its director for Asia. The company has also parted company with its MD for Europe, its Middle East design director and several senior staff from its US operation.
It emerged over the weekend that officials representing the Dubai government visited RMJM's offices in the Gulf state to register their concern about delayed wage payments over the past year. It is illegal to issue bounced cheques in the country. The firm's operations in England have also been shaken up, with projects relocated from a Cambridge office to London due to "tough" market conditions.
RMJM's decision to appoint Sir Fred, a figure synonymous to many with the excesses of the banking industry, has been questioned in the past. Lord Oakeshott, the Liberal Democrat Treasury spokesman, said: "It is a strange business decision. I can't believe it will open doors for any contracts paid for by the British ratepayer."
However, an RMJM spokesman said yesterday that Sir Fred was merely an "adviser to the company". The spokesman admitted that the firm was facing cash-flow issues, adding: "Like other architectural companies, cash management is a vital component. There is a significant sum of money owed and we are trying to sort this out.
"As a result of cash-flow pressures, a significant client is behind on its payment schedule and we are in negotiations to have that brought up to date. That in turn has caused cash-flow issues, putting us in a similar position to many of our competitors in the region."
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