Sears plans fight at Facia

Sears, the retail giant, is set for a bitter battle this week with controversial Sheffield businessman Stephen Hinchliffe over the choice of liquidator for his collapsed Facia retail empire.

At a meeting at the Queen's Hotel on Tuesday morning in Leeds, Sears will propose the appointment of accountancy firm Stoy Hayward as liquidator for the voluntary winding-up of Facia.

Mr Hinchliffe, meanwhile, has put forward Brendan Gilfoyle, a partner at Leeds firm Geoffrey Martin & Co - a proposal that Sears and Price Waterhouse, the administrator to Facia's separate footwear operations, strongly oppose.

The group collapsed in June, with debts of up to pounds 70m, and the Serious Fraud Office and South Yorkshire police have since started an investigation.

As chairman of Facia Ltd, which owned chains including Sock Shop and Salisbury luggage, Mr Hinchliffe has the right to chair the meeting.

Sears, via Price Waterhouse, has brought a pounds 30m claim against Facia, which would make it by far the largest creditor. It is likely to bring a legal challenge, should Mr Hinchliffe fail to acknowledge the claim.

The businessman denies all wrongdoing and has said he, too, is owed millions by the group - a claim that accountancy firm KPMG, Facia's own administrator, has rebuffed.

Should he appear at the meeting, he will face calls to justify a series of allegedly irregular payments to himself, staff at his Israeli bank backers United Mizrahi and his private master company, Chase Montagu, totalling over pounds 10m.

As revealed in the Independent on Sunday last month, investigators have tracked down at least pounds 1.3m of payments made in return for over pounds 10m of loans.

Facia also lent pounds 2.5m on uncommercial terms to two of Mr Hinchliffe's other firms, Colibri Lighters and French & Scott.

Other payments include:

pounds 430,531 of helicopter expenses.

pounds 100,000 for fitting out Facia's headquarters at Parkhead Hall paid to Chase Montagu, which did not own the building.

pounds 275,000 of introductory fees to Chase Montagu in respect of Salisburys; pounds 400,000 for Sock Shop; pounds 100,000 for jewellery firm Torq; pounds 104,000 for introductions to Burtons and pounds 161,000 to Sears.

The last form part of pounds 2m of so-called "finders' fees", even though Facia is understood also to have paid commissions direct to firms, including Coopers & Lybrand in Leeds, for introductions.

Comments