The Administrators of Globo Plc have published their initial report into the affairs of the company. It makes for depressing reading. In essence one might sum it up in the phrase “There’s no money left” which was the infamous wording of a note left by one UK Treasury Minister to his successor.
In this case, even the secured creditors (Barclays Bank in the lead), are unlikely to get paid in full and all unsecured creditors and shareholders will get nil. The assets held in subsidiary companies, where most of them were, appear to be of little value. Some of the subsidiaries are already closed down and others are being sold in a fire sale process as the Administrators have no cash to support them. The cash claimed to be held within the Group according to the audited accounts does not seem to be present.
The Administrators have already spent £303,000 and the final cost for the Administration may be double that, which just shows you how quickly the bills can be run up in such cases.
The key question is whether the Administrator is likely to pursue any claims against Grant Thornton or other parties. But the lack of any cash within Globo Plc itself (i.e. within the Administration), may well prejudice against that. Shareholders might therefore have to pursue such claims directly.
The Financial Reporting Council (FRC) has launched an investigation into Grant Thornton’s audits of the financial statements of Globo Plc for the years ended December 2013 and December 2014. This is of course not unexpected but will obviously take a long time to report as is normal in such cases.
Any shareholders in Globo who have not yet registered with the ShareSoc shareholder group should do so on this web page: www.sharesoc.org/campaigns/globo/.
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