Newsletter - Sat 15 Jul, 2023
In this issue..
Borough council looks to find out more on outstanding £1.1 million loan owed by a company it set up, Pathway for Care
Gatwick submits plans for second runway
Wind in the Willows starts this weekend at Gatton Park
Surrey to pay compensation in another SEN case
Council presses for details on £1.1 million lent to company
There's uncertainty about when Conservative-run Reigate & Banstead Borough Council will get back £1.1 million lent to a company that it set up.
Pathway for Care Limited was established in 2016, mainly to provide assessment, direct support and electronic monitoring services for older people. The council aimed both to reduce costs and generate income, and was the majority shareholder.
Subsequently the company also diversified into supported living services.
In 2018, the company's borrowings of £1.1 million from the council were converted into redeemable preference shares, while at the same time the digital services were spun off into another company.
The council also sold most of its shareholding, and today holds only 10% of the ordinary shares in the company.
The preference shares (i.e. the £1.1 million loan from the council) were supposed to be redeemed this year (so repaying the council), but a report this month (Opens in a new window) said: "The redemption date of 5 April 2023 has not been honoured due to the company holding insufficient funds. The council is now awaiting tangible proposals for redemption of the preference shares."
The report added: "The council has received audited accounts for the year to 31 December 2021, but these do not have a valid audit opinion, do not include a 'going concern' statement and show that the company is technically insolvent. Accounts for the year to 31 December 2022 are not yet available."
At a council committee meeting (Opens in a new window) on Thursday, executive member Cllr Andrew King (Conservative) said: "The council is continuing to seek critical business information from the company as a minority shareholder including with regard to the redemption of the council's preference shares which the company has not yet honoured".
The topic was also considered at a council scrutiny meeting (Opens in a new window) the week before. Cllr Jonathan Essex (Green) asked when the company's accounts were expected to be available. Cllr King responded that the answer would need to be dealt with in the private part of the meeting because of the risk of commercial information being shared.
The report to both meetings noted that the council has a nominated director on the board of the company.