Police not pursuing Smooth Financial case
GREATER Manchester Police is not investigating the circumstances around the collapse of Sale-based debt management firm Smooth Financial Consultants.
The Sale-based company went bust in July and administrators at Royce Peeling Green in Manchester discovered that payments worth £850,000 from 3,500 clients, that should have been used to service their debts, were being used to sustain the business.
At a creditors’ meeting in October administrator Alan Coleman said the police had been informed but he had not yet been interviewed.
A police spokesman told TheBusinessDesk.com that both the economic crime unit and the division covering Sale were not aware of the case. The administrators could not be reached for comment.
In October administrators said they were chasing cash that left the business through loans to directors and to sister companies. Mr Coleman said he was investigating an overdrawn directors’ loan account of at least £158,000 which was used for holidays and a deposit on a property.
And he said client money may have been used to make loans of £590,000 to connected companies. Royce Peeling Green was planning to liquidate Contingence Ltd, Smooth Investment Group and Smooth Media which owed a total of £306,000. A further £233,500 was owed by Citizens Claims, controlled by the Smooth Investment Group, which also went into administration last year.
Around 50 staff lost their jobs at the business which was owned by the Smooth Investment Group whose largest shareholder is Mark Broadstock. He was a director along with his wife Josephine Broadstock. Robert Jones was the finance director from January 2012 until June.
People with debt management plans pay a regular amount which is held in a client account and distributed to creditors by a debt management company in return for a fee. Smooth’s client base has since been sold on to Surrey-based Money Expert in a deal worth up to £450,000.
Unaudited accounts for the year to January 2012 show the company made a net profit before tax of £114,136 on turnover of £2.6m. The company failed with debts of £1.3m, including the client account deficit, however, the administrators expect to make a return to unsecured creditors.
