A Report to Blackpool Borough Council on Research into the preferred bidder for the Stanley Park Golf Course: Holmes Investment Properties PLC

Posted on: Fri Feb 7 by Tom Barlow

EXECUTIVE SUMMARY

Blackpool Borough Council (BBC) are planning to enter into a contractual agreement with Holmes Investment Properties Plc (HIP), whom they have identified as their preferred providers for the following the tender for the provision of Stanley Park Golf Course (ITT reference DN386031).

This report has been collated through diligent and detailed research, possibly in excess of any due diligence a local authority might generally perform. All the detailed company information is from Companies House, a publicly accessible government website[1].

Key points:

  • HIP is a young company, very inexperienced operationally, with NO track record for developing such complex sites  
  • ‘Adrenaline World’, as a concept, has NO operational sites.
  • The previous business and financial track record of HIP’s directors is questionable
  • HIP do not, according to their audited accounts, appear to have funds to develop the Stanley Park site at £40m, as they have suggested they will
  • HIP are yet to make any profit whilst trading and their shares have been suspended on the stock exchange.
  • An historic collaboration in mismanaged companies is a common thread of HIP.
  • The golf course can be financially viable if it is promoted, marketed and maintained appropriately, and there are experienced golf course management companies who are keen to take it on

Conclusion:

Early indications are that, without planning permission being approved, HIP’s entire proposal is unviable. The financial profile outlined in this report suggests that HIP are NOT a company that the Council should be entering into any financial relationship with.

It is very unlikely that BBC will have had any of this information prior to the Council Executive awarding preferred bidder status. We hope that if the following information had been available earlier, HIP’s bid would have been rejected.

We are currently in a situation where no contracts have yet been signed, although they are imminent. We urge the Council to consider the findings outlined in this report; to cease any further negotiations with HIP. There are other more creditable options for this site. The Stanley Park Golf Course Community Benefit Society continue to offer a significant alternative and enhanced proposal to the running and development of the site.

A)  Procurement: background information.

The background to the decision to consider an alternative to golf on the site was made based on the Council’s claims that the course is not financially viable and had been losing money under its previous management. However, when the BBC and their subsequent subcontractors, Mac Trading, were managing the course they failed to invest, market, promote or show any enthusiasm for alternative or innovative use of the course. There was little or no attempt to develop any sort of community involvement, or any alternative benefit for the residents of the town. Indeed, BBC allowed Mac Trading to operate even though they were in breach of their contract by not paying any rent.

Following the decision to award HIP as the preferred providers in July 2019, complaints were submitted to the council in relation to: the procurement process; potential unfair advantage given to HIP; the fact that the proposal from HIP would contravene BBC’s own Local Plan and policies; and the subsequent multiple issues that are likely to prevent planning approval.

HIP’s plan for Stanley Park Golf Course was announced on 29th August 2019 in a joint press release from BBC and HIP. This outlined the building of up to 250 holiday lodges, the building of an Adrenaline World tourist attraction, and the reduction of the Golf Course to 9 holes.

We are advised that the Council are currently still carrying out their due diligence on HIP, who were chosen as the preferred providers using a “most economically advantageous tender” (MEAT) analysis. We hope that the information in this report will support the due diligence process.

B)  Holmes Investment Properties PLC (HIP) background information.

  1. HIP’s plans for Stanley Park Golf Course: –

The entire Stanley Park Offering is totally at odds with HIP’s corporate strategy and they have no experience at all in construction of such complex sites.

  • It is notable that HIP PLC only have 1 other site, in the North East, which is following their corporate strategy of using previously built infrastructure, refitting and branding as a new leisure offering.
  • This is a hugely cheaper option than the idea at Stanley Park.
  • the Newcastle site involved no construction costs at all; no infrastructure costs; no planning costs; no professional costs such as Architects and Engineers
  • The current company strategy, as stated on the website and through numerous financial channels, at no point refers to design and build.
  • They have no Architects or engineers and no available plans.
  • The company have no track record at all that is relevant to the Stanley Park project.
  • The main parties involved in the preferred provider’s tender: –

The track record of the directors, however, is questionable, and HIP appears to be run by only 3 people:

  • CEO (Micheal Simmonds)
    • MD (James Holmes)
    • Chairman (Martin Eberhardt)
    • All board members of HIP are non-executive, except the Chairman (Martin Eberhardt) and this is the first year Board members will draw a salary from HIP, they only receive expenses otherwise.
    • The CEO (Michael Simmonds) is currently owed £53k in wages according to accounts filed 30.12.19
    • The Company’s strategy is to entice investment by offering 8-10% return over 5 years, based on interest and growth of investments elsewhere. They use the leverage of a contracted lease period with leisure operating partners to ensure interest repayment and profit.
    • HIP do not, according to their audited accounts, appear to have funds to develop the Stanley Park site at £40m, as they have suggested they will.
    • HIP’s role in the proposal is to construct the buildings only, making them ready for fit out by 3rd party leisure partners.
    • HIP have no experience in golf course management at all so have appointed a consultant, Colin Jenkins (see later) to advise initially.
    • The golf consultant lives in Kent and has no intention of onsite involvement, should he be contracted to deliver any subsequent operational golf management role.
    • HIP is a young company, very inexperienced operationally, and they have NO previously developed sites.
    • ‘Adrenaline World’, as a concept, has NO operational sites.
    • David Lloyd is the sole director of Adrenaline World Ltd, which was only set up in July 2019.
    • David Lloyd Developments are HIP’s partners and have NOT developed any Adrenaline World sites, although they have agreements in place in at least 3 parts of the country.
    • David Lloyd Developments MB Ltd do currently have planning permission in place for a site worth over £400m, but he has chosen to develop that site with someone else: that project does not include HIP at all.
  • HIP’s finances and guarantors: –
  • HIP was set up in March 2017, having originally been a gold mining company (Cariboo Gold Mining).
  • The immediate parent company (Grosvenor Square Investments Ltd) has only promised HIP financial support until September 2020 (taken from the Audited Accounts of HIP PLC).
  • James Holmes, the MD of HIP PLC, is also the Director of the parent company (Grosvenor Square Investments Ltd) and is the sole owner of the ultimate parent company (Auchroisk Holdings Ltd). Essentially James Holmes is acting as guarantor through a company he is the sole director of.
  • In total, James Holmes’ companies currently have less capital than HIP PLC has liability.
  • HIP PLC are traded on the Borse Berlin Exchange. One of the reasons may be that it is a less regulated market. It is certainly a lower level market in comparison to the FTSE 500 or the AIM.
  • Shares were suspended in September 2019.
  • As can be seen in the following table, the shares were practically worthless: 0.003 cents down from 0.15 cents at its height.
  • The reason for suspension is unclear. No details have been disclosed by Borse Berlin. HIP PLC have been asked why this currently is their position, no answer has been forthcoming.
  • This is the second time the shares have been suspended, previously issues with mal administration caused it to be necessary.

Share price at 5/1/2020:-

  • James Holmes MD of HIP PLC
  • James Holmes is a Conservative Councillor for Merton Council in London (Trinity), but has not declared some of his business interests in his council interest declaration
  • James Holmes has been a director of up to 80 other companies in the past 20 years and has clearly not concentrated on HIP.
  • He has a history of unsuccessful companies (see below)
  • He has no track record at all in delivering this kind of enormous development project, making this his first attempt. As such, this is a very high-risk investment prospect and a very risky partner for the council to rely upon.
  • There is not enough finance in place to start the development, as mentioned above (according to audited accounts)
  • No published time frames have been met according to their strategy on https://www.hipplc.com/
  • No projects have yet been planned or developed
  • No architect has yet been appointed
  • The combined cash at bank value for all the businesses James Holmes holds does not cover the liabilities.
  • The listed companies below are not the full complement of Mr Holmes liabilities. There are a very complex set of businesses that he is secretary and director to. He also has businesses abroad, which are not listed in the UK. Is this complexity the equivalent of hiding in plain sight?

James Holmes UK Directorships:

Everyone Entertained LtdAccounts overdue – HIP Chairman is a director
UK Adventure Parks LtdNicolas and James Holmes are directors
David Lloyd Adventure Parks LtdDavid Lloyd is not a director (Jawad Munib Ahmad) *see section 6 later
HIP (operations) LtdAccounts overdue – all current board and executive members have at some time in the past been directors of this company.
Game Global LtdNotice of strike off – accounts overdue
Grosvenor Square Investments LtdAccounts overdue
Holmes Property Ventures LtdCompulsory strike off
Merchant Corporate Recovery PLCCompulsory liquidation (Rangers)
Merchant Turnaround PLCWinding up order. Strike off (Rangers)
Merchant House Group PLCVoluntary liquidation
Merchant Trading LLPCompulsory strike off
Merchant Strategic Renewal PLCCompulsory strike off
LM logistics Group LtdVoluntary Liquidation
Country Liner Group LtdCompulsory strike off (Rangers link)
Stratton Asset Management LtdCompulsory Liquidation
Ignite Frontiers Markets LtdCompulsory strike off
Zemfill PLCVoluntary strike off Rangers link
535X (UK) LtdCompulsory strike off
Hollywood Recovery LtdCompulsory strike off Rangers link Aiden Earley link
Foundation (Northern Ireland) #NI068079Accounts Overdue
Auchroisk HoldingsHIP are ultimate parent company
Holmes Improvement Bond LtdNew company no filing
Merchant Capitals Holdings LtdOwns Valens Bank Ltd (not on Companies House)
International Communities Organisation Ltd 
Forum for Cities in Transition Global Ltd 
Impetus Impact Investment Ltd 
Compass (Mali) LtdDormant
Valens Clearing LtdNo filing
Valenspay LtdNo filing
Valens Crypto Investments LtdCompulsory strike off
  • James Holmes and RANGERS Football Club insolvency
  • James Holmes was a Director of companies that were ultimately part of the demise of Rangers Football Club, along with fellow director, Craig Whyte.
  • Investor capital was lost up to £2m through his group of companies.
  • The companies were asking for private finance injections to sustain the club, with promises of 8% returns over 5 years. No investors were reimbursed, and the companies entered voluntary liquidation. Mr Whyte meanwhile moved his assets to the British Virgin Islands.
  • Mr Whyte was charged and tried in the biggest corporate fraud case in Scottish history.
  • Both Mr Holmes (MD) and Mr Eberhardt (Chairman) have had multiple dealings with Mr Whyte and struck off director Aiden Earley, all of whom also have association with Mr Holmes via Worthington PLC, where Mr Holmes was consulted over a pension scheme “Heist”.
  • There are newspaper reports; media posts; financial investment blogs; and legal comment on this subject. None of it positive to either Mr Holmes or Mr Eberhardt (copy available).
  • “Mr James Dominic Rupert Holmes holds 10 appointments at 10 active companies, has resigned from 23 companies and held 39 appointments at 39 dissolved companies. Their longest current appointment spans 14 years, 2 months and 9 days at MERCHANT HOUSE GROUP PLC. The combined cash at bank value for all businesses where JAMES holds a current appointment equals £141.8k, a combined total current assets value of £3.6m with a total current liabilities of £54.5m and a total current net worth of £-2.3m. Roles associated with Mr James Dominic Rupert Holmes within the recorded businesses include: Director, Company Secretary, Llp Member”[2]
  • This episode is a very complex picture to paint, however we are more than willing to explain as far as possible face to face on request.
  • Interdependency (*see table earlier)
  • There is a link between James Holmes and Jawad Munib Ahmad through shared directorships of David Lloyd’s Adventure Parks Ltd.
  • There is also a link between David Lloyd Development M-B Ltd and Valens Bank Ltd; Jawad Munib Ahmad is a director.
  • The Valens Bank Ltd is an unofficial offshore bank run by James Holmes. It is registered in the Comoros islands, and is a tax haven with a questionable history with crypto currency brokerage.
  • Ahmad has 3 companies prefixed by “Valens”: Valens Commodities Oil and Gas Ltd, Valens Capital Markets Ltd, all registered at 35 High Street Wimbledon, an address shared by James Holmes.
  • In almost all cases the directors of HIP PLC have been fellow directors of other failed companies: many of them making large losses for both investors and HMRC.
  • Track record and previous patterns of behaviour are essential in any risk analysis when signing contacts with suppliers.
    • This company have no track record at all in regard to the Stanley Park Bid.
    • The kindliest description of this company we have had from accountants and lawyers, whom we have asked for advice, has been that HIP are “speculators”.
    • The multiple insolvencies, joint insolvencies and inept management of account filing seems to be a constant.
  • The management are very familiar to each other and they are obviously very experienced in how to liquidate companies and limit their own liability, then move on to the next project.
  • The directors are so interdependent because of their group responsibility for so many failures.
  • New management would struggle to deal with their lack of success.
  • Other key players in the HIP PLC Bid
Nicolas Holmes Non- Exec Director of HIP PLC
L P Bonds PLCAccounts Overdue (second time 03/12/19) Notice of strike off. Charge made by Independent Portfolio Managers Ltd.
West Place Enterprises LtdCompulsory strike off
  Brother of James Holmes no experience of a company of this size. Is a joint Director with his brother in UK Adventure Parks Ltd.
  
Martin Eberhardt CHAIRMAN
04487961 LtdVoluntary Liquidation
Merchant Corporate Recovery PLCCompulsory Liquidation James Holmes also Director
Hollywood Recovery PLCCompulsory strike off
Merchant House Group PLCVoluntary Liquidation James Holmes also director
HIP Operations LtdAccounts overdue
Everyone Entertained LtdAccounts overdue
  No mention of HIP PLC on his LinkedIn page.
  
Micheal Simmonds CEO HIP
Detaininfo LtdVoluntary strike off
WMS (Specialist Lending) LtdInsolvency
Accessibility Will LtdCompulsory strike off
Tenacity XV LtdCompany looks to be his source of income
TXL Group LtdDirector: Holmes/ Simmonds
R H Capital LtdDirector: Holmes/ Simmonds
Omega FSG LtdVoluntary Liquidation – Insolvency
Personal background: ex-army; mortgage broker; private capital brokerage; no operational experience; no proven record within the sector; no measurable success in any field.  
  
Colin Jenkins Golf Consultant
Basildon Golf Course Ltd£48k loss to September ‘18 – mortgaged with Barclays
World Putting LtdDormant company which has never traded
Jobs in Golf LtdDormant company
Grimsby Golf Centre Ltd£22k loss to March 19 mortgage and debenture
Golf Range New Ltd£5k profit
Maidenhead Golf CentreVoluntary Liquidation -May 2017- (statement of solvency)
Organisation of Golf Range Owners LtdStrike off 2017
Runs a set of golf-based businesses, of which Basildon Golf Course seems to be the only professional venture. Colin Jenkins claims that GRN Ltd is the company that owns machinery4golf.net, GRN consulting, golffeatures.com, Golf range finder, ORGO. This is not the case, GRN Ltd are a company in Cambridge concerned with commercial construction. However, GRN Production Ltd went out of business in 2009. Colin Jenkins was a director.  
  • Public Profile: Social Media
  • The company do not interact with social media as a normal operating company would. Their minimal presence seems totally at odds with current commerce expectations and it seems strange that a purported multi-million pound company would not have a well-developed online presence.
  • Peaks in interest of the business only qualify as content and they fail to update information such as dates, data and people.
    • Twitter: 17/10/18 start, 8 posts to date.
    • Facebook: No presence
    • Instagram: No presence
    • Linkedin 4 posts. 
  • Responsibility of the council

During a procurement process a local authority have a responsibility to assess the risk of a possible contractor: viability and business risk included. This is conducted via a process of due diligence, which needs to include all contractors and sub-contractors. At this moment no 3rd party contractors have been appointed (apart from the initial consultancy on golf course planning), making the council policy unenforceable. BCC cannot be following their own protocols as they have not been given the pertinent info by HIP.

It is hoped that this report will support the BBC due diligence process.

  1. Conclusions
  1. The HIP bid for the running of a golf course seems a means to an end, speculative and ad hoc and their lack of operational experience in this area is worrying.
  2. It is unlikely that a company with no track record of delivering such an unusual concept would be likely to succeed at first attempt.
  3. The complexity of delivering such a project would not likely be imagined with a company like HIP.
  4. The company has amongst its executive and board members, a litany of unsuccessful financial ventures including insolvency.
  5. More worrying is the interconnection of the directors prior to HIP becoming a PLC and their track record in financial management.
  6. In almost every case the members of both board and executive had close connections in the past: almost to the point of the company structure appearing contrived.
  7. Regarding James Holmes, questionable practice and claims of fraud abound. It seems Mr Holmes has a previous track record with businesses needing to attract finance to start to operate.
  8. The HIP concept is very much on the lines of finding venture capital funding for developments, this has been disastrous in companies run by Mr Simmonds and Mr Holmes in the past.
  9. HIP is a company operating almost entirely on debt. Their liquidity is very worrying. They have 10 years with no evidence of profit to date, from latest accounts less than £5k in cash.
  10. Seemingly no institutional investment is also worrying, especially as the company have been developing the product for a reasonable time.
  • We would suggest that Blackpool Borough Council have not done their due diligence to a standard expected of a local authority. All the information in this report was available online via Companies House, court records and published newspapers.
  • It looks like BBC have chosen to make HIP PLC “preferred bidder” based purely on the “Bid process”; the marking criteria for which are not in the public domain, neither are the bids themselves: –
  • On FOI requests, BBC refused disclosure, based on commercial confidentiality, even though local government association guidance pushes for transparency and indeed the local government ombudsman advised (when contacted) that BBC were misguided in their decision not to make more documentation public.
  • Track record is essential as an indicator of future performance. The makeup of HIP with regard to its board and directors have, on almost all counts, questionable track records.
  • Below the surface this company has no depth. The necessity to raise finance based on an untested product is a hard sell. Made more unlikely by the lack of historically competent management and multiple past company failure. The David Lloyd partnership with HIP PLC, is purely an attempt to gain some gravitas for the company. David Lloyd is already making plans to both build and fit out “Adrenaline Worlds” in different parts of the country, with other operators rather than HIP.
  • The Stanley Park site is extremely unlikely to be the first site. David Lloyd’s own website says 2 other sites are ahead of Blackpool. It seems a little far-fetched to believe that his focus would be on a partner’s development prior to his own.
  • Added to this is that David Lloyd has already secured private finance capital for his own projects.
  • Neil Jack’s assertion to Cllr Williams that “companies often file accounts late” seems a little misplaced in the light of the overwhelming evidence of corporate mismanagement in HIP directors’ case in previous companies. The historic collaboration in mismanaged companies is the common thread of HIP. It is also likely then that they have legitimate reasons to protect each other’s interests rather than the interests of their investors or landlords.
  • Recommendation:

It is hoped that this information is taken seriously by BBC and gives them the opportunity to make an informed decision to stop this contract and reconsider the future for Stanley Park Golf Course, before they make a grave mistake.

All the information in this report is accessible in the public domain and can be checked by BBC should they wish to do so. It will also be forwarded to the local press, Local Government Ombudsman, local government minister, local MPs and all councillors.


[1] https://www.gov.uk/government/organisations/companies-house

[2] Company Check, About MR JAMES DOMINIC RUPERT HOLMES, Accessed at

 https://companycheck.co.uk/director/900561366/MR-JAMES-DOMINIC-RUPERT-HOLMES/summary Accessed on 3/2/2020