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FAILED law firm Asons Solicitors owed as much as £26 million when it ceased trading early last year, it has been revealed.
The figures came to light following discussions between the Solicitors Regulation Authority (SRA) and the liquidator in charge of the company’s assets.
While a deal to pay out any sum of money is yet to be agreed with creditors, the liquidator has confirmed that it has received claims to date totalling £26.4 million.
It follows news that Kamran Akram, one of the founders of the Churchgate-based firm, was handed an 18-month suspension from practising as a solicitor last month.
The SRA, which was brought in to intervene in the struggling company last March, requested to take control of some of the firm’s assets while it made a deal with liquidators to begin paying back some of the money owed to creditors.
A spokesman for the authority said: “We continue to discuss the situation with the liquidators, which is complex.
“Our first priority is our clients and making sure they are protected and then it’s about the profession itself and making sure other solicitors don’t have to foot the bill for our interventions.”
It is believed that one of the bills comes from HM Revenue & Customs, which is thought to have laid claim to more than £1 million, although the department refused to comment.
The situation became particularly controversial when it was revealed that Bolton Council had given a £300,000 grant to Asons from its town centre regeneration fund.
This money was then repaid in full by Mr Akram after the authority warned that it would be launching legal proceedings to recover the grant.
Following disclosure of how much the firm owed, Bolton Conservative leader, Cllr David Greenhalgh, said: "The news that Asons are left owing approximately £26 million once again raises the very serious question of what due diligence the council undertook on this company before £300,000 of public money was handed over under emergency powers.”
He added: "This flawed and unacceptable decision, that the ruling Labour group supported and defended every time it was discussed at full council, will be the stain on their administration, that no matter how hard they try, they cannot remove."
An independent review into the grant, completed by financial services firm KPMG, found that the decision to give Asons the money was “legal and appropriate”.
Investigators said they were “not satisfied” with the emergency powers procedure used following the collapse of the law company but praised the council for the way it pursued the return of the grant.
In May, Asons founder Mr Akram was told he was suspended from practising law for 18 months after appearing before the Solicitors Disciplinary Tribunal in London.
It followed allegations brought against him by the SRA that, between 2013 and 2015, he misrepresented the grade of fee earners to increase the level of recoverable costs in personal injury claims, allowed claims for special damages for non-existent incidents and acted in circumstances giving rise to conflicts of interests between Asons and its clients.
It was also alleged that he provided misleading information to a court and/or the SRA and caused or permitted payments of prohibited referral fees.
He was also said to have failed to run Asons effectively and in accordance with proper governance and sound financial and risk management principles.
http://www.theboltonnews.co.uk/news/16319620.Failed_law_firm_Asons____26m_debt_shock/?ref=mrb&lp=1
The figures came to light following discussions between the Solicitors Regulation Authority (SRA) and the liquidator in charge of the company’s assets.
While a deal to pay out any sum of money is yet to be agreed with creditors, the liquidator has confirmed that it has received claims to date totalling £26.4 million.
It follows news that Kamran Akram, one of the founders of the Churchgate-based firm, was handed an 18-month suspension from practising as a solicitor last month.
The SRA, which was brought in to intervene in the struggling company last March, requested to take control of some of the firm’s assets while it made a deal with liquidators to begin paying back some of the money owed to creditors.
A spokesman for the authority said: “We continue to discuss the situation with the liquidators, which is complex.
“Our first priority is our clients and making sure they are protected and then it’s about the profession itself and making sure other solicitors don’t have to foot the bill for our interventions.”
It is believed that one of the bills comes from HM Revenue & Customs, which is thought to have laid claim to more than £1 million, although the department refused to comment.
The situation became particularly controversial when it was revealed that Bolton Council had given a £300,000 grant to Asons from its town centre regeneration fund.
This money was then repaid in full by Mr Akram after the authority warned that it would be launching legal proceedings to recover the grant.
Following disclosure of how much the firm owed, Bolton Conservative leader, Cllr David Greenhalgh, said: "The news that Asons are left owing approximately £26 million once again raises the very serious question of what due diligence the council undertook on this company before £300,000 of public money was handed over under emergency powers.”
He added: "This flawed and unacceptable decision, that the ruling Labour group supported and defended every time it was discussed at full council, will be the stain on their administration, that no matter how hard they try, they cannot remove."
An independent review into the grant, completed by financial services firm KPMG, found that the decision to give Asons the money was “legal and appropriate”.
Investigators said they were “not satisfied” with the emergency powers procedure used following the collapse of the law company but praised the council for the way it pursued the return of the grant.
In May, Asons founder Mr Akram was told he was suspended from practising law for 18 months after appearing before the Solicitors Disciplinary Tribunal in London.
It followed allegations brought against him by the SRA that, between 2013 and 2015, he misrepresented the grade of fee earners to increase the level of recoverable costs in personal injury claims, allowed claims for special damages for non-existent incidents and acted in circumstances giving rise to conflicts of interests between Asons and its clients.
It was also alleged that he provided misleading information to a court and/or the SRA and caused or permitted payments of prohibited referral fees.
He was also said to have failed to run Asons effectively and in accordance with proper governance and sound financial and risk management principles.
http://www.theboltonnews.co.uk/news/16319620.Failed_law_firm_Asons____26m_debt_shock/?ref=mrb&lp=1