FSA probes Dylan Harvey land division

THE FINANCIAL Services Authority has launched a probe into the activities of Dylan Harvey Land Investments, a subsidiary of the recently-renamed Harley Scott Holdings group of companies.

Details of the probe are revealed in recently-filed accounts for Burnley-based Harley Scott Holdings – formerly Dylan Harvey Group Ltd.

The accounts cover a 12-month period to February 28 2010, but the firm declared that since its year end Dylan Harvey Land Investments had been investigated by the authority. It added that the outcome of the FSA’s investigation was not known as the accounts were being signed off, but warned that there was potentially a “material uncertainty” as to its impact on the group.

Dylan Harvey Land Investments was set up in January 2009. Its only set of filed accounts to date state that it had collected £1.76m of reservation fees from customers for long leases on plots of land. Around £1.7m of these deposits were transferred from other schemes, and the FSA’s enquiry was to investigate whether this could be classed as a collective investment scheme.

Other matters of “material uncertainty” potentially affecting Harley Scott Holdings include its current financial position. Group accounts show that its liabilities outweigh its assets to the tune of £7.9m, although this was an improvement on the £9m deficit in the previous year.

The company’s accounts were only prepared on a “going concern” basis due to the support of its directors and although there had been “numerous correspondence between the group’s financier and the directors” since its year end, no deal has been concluded.

The company also faces potential claims from the liquidators of the former Dylan Harvey Residential business, which collapsed in 2009.

Dylan Harvey Residential had taken around £6.5m in deposits from investors into a series of schemes in Manchester including Clippers Quay in Salford, Zacharie Tower and Bengal Mill in Ancoats.

A report to creditors produced by Dylan Harvey Residential’s administrators CLB Coopers in July last year, stated that the firm would be placed into liquidation but that CLB Coopers in its role as liquidator would pursue a number of issues with the Dylan Harvey Group.

These included repayment of a £285,000 company overdraft owed by the group. Liquidators were also planning to review the sale of three properties on Birch Street in Wardell for £510,000, a £1.6m dividend paid to directors in February 2008 and an inter-company loan of £253,194 made to Paradise Project (Liverpool) Ltd made just three days before  it was placed into administration. The report stated that it considered both the property sales and dividend payments as “reversible transactions”.

Two other companies within the Harley Scott Holdings group have ceased trading since the February 2010 year end,  during which Harley Scott Holdings made a profit of £1.3m on sales of £15m. M8 Manchester Ltd has been placed into receivership by its bank and La Schappe Ltd has been struck off at Companies House.

In notes accompanying the accounts, the company said that it had managed to successfully re-sell all of the units at the Liverpool Business Centre it completed in late 2011, providing what it described as a “healthy profit pipeline”, while its Harley Scott Residential division sold both the freehold and management of its proposed Fresh Tower building at Chapel Street in central Salford and its Westgate residential scheme in Burnley.

Harley Scott’s owner Toby Whitakker was contacted by TheBusinessDesk.com but no reply was received. The Financial Services Authority said that it does not comment on any ongoing investigations.