AESR calls for DTI inquiry into Sturmey collapse - BikeBiz

AESR calls for DTI inquiry into Sturmey collapse

The pressure group Architects and Engineers for Social Responsibility the sponsors of which include numerous profs, Lords, Sirs, CBEs, and PhDs has copied BikeBiz their letter sent to the Department of Trade and Industry. It questions the ethical business values of a corporation which could pocket the millions of pounds from the sale of Sturmeys land, but then sell the now asset-less company for £30 to an unknown investment house
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The DTI is rumoured to be already conducting an investigation, although nobody at their Companies Investigation Branch can confirm this.

The letter from the Architects and Engineers for Social Responsibility the most famous patron of which is cycle-friendly Lord Rogers, the governments favourite architect asks some telling questions.

Heres a slightly edited copy:

13th December 2000

Dennis OCallaghan Esq

Department of Trade and Industry

Companies Investigations Branch

Romm 716

10 Victoria Street

London

SW1H 0NN

Dear Mr OCallaghan

Re: Closure of Sturmey Archer

I understand from your colleague Mr Alan Woods that you are looking to the possibility of holding an investigation into the sale and subsequent liquidation of Sturmey Archer. On behalf of AESR I would urge strongly that this should take place.

The details of the sudden sale to an unknown company, a fifteen day downward spiral into bankruptcy and subsequent break up of the company are well documented in the pages of Bicycle Business and in the local and national press, so I will not reiterate these details here, suffice to say that I understand the last few workers are completing clearing the factory in the hope of receiving some part of the redundancy pay they should have been due.

Some of the burning issues that should be answered in an inquiry are:

1. Did Lenark Ltd deceive Derby International as to its status and therefore after buying the company for £30 and taking out cash in the form of management fees did they obtain money by deception?

2. If Derby International were not deceived, did they proceed with due diligence in making the sale?

3. Why did Derby International sell the European distribution company Sturmey Archer Europa BV in a paper transaction of £800 000 to Sturmey Archer Ltd only days after selling Sturmey Archer to Lenark Ltd. for £30? If Sturmey Archer was worth only £30 to Lenark Ltd how could SA Europa BV be worth £800 000 to S.A? This looks very suspicious. Did this help SA go bankrupt?

There is, of course, the wider issue of how it can be right for a company making a successful product to be forced to move because the company is of less value to its owner than the site on which it is located, but I expect this would fall outside the scope of any enquiry.

I am sure that with good management, Sturmey Archer could have continued as a successful British company.

AESR is an organisation of architects and engineers from many disciplines. Among our objectives are the encouragement of environment friendly technologies and an awareness of ethical values in our professions.

Yours sincerely


Michael Poteliakhoff

Member, Executive Committee

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