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Curbs urged on Asset Based financiers

A LEADING Tory campaigner is calling for regulation over asset-based finance firms after his company collapsed into administration.

Brian Moore, who is currently also campaigning for an elected mayor for Newcastle, ran laundry company Smart and Kleen at the Whitehouse Enterprise Centre in Benwell, in the city.

But the former Conservative Party Newcastle chairman says the company closed two years ago with the loss of 16 jobs after its bankers demanded £10,000 when it was already in difficulties. With cash flow problems, Moore had applied for pre-pack administration, a move in which businesses can re-structure their debts.

But he says the firm’s finance company demanded £10,000 hours before the administration was to be finalised and that he was unable to find the cash, so the firm had to be wound up.

He is now chairing a pressure group of like-minded people from business and trade unions, politicians and banking reform campaigners to get the asset -based finance industry regulated by an independent ombudsman.

The group, Asset Based Finance Associates, currently has more than 40 members and is applying for charity status in the next few weeks.

Moore said: “The ombudsman, the FSA and the Office of Fair Trading, all have no power to intervene in disputes between the companies and their clients, both existing and former.

“The objective of the group is getting the asset based finance industry to be regulated by an independent ombudsman with substantial powers and funded by the industry. We need to break the potential incestuous relationship between administrators of failed companies and the members of this industry that appoint them.

“The industry has made substantial income from companies that have gone into administration at the expense of HMRC and creditors for the last 10 years. We are demanding that the government apply a multi-billion-pound claw-back tax.”

http://www.nebusiness.co.uk/business-news/interviews-with-business-people/2012/06/15/curbs-urged-on-financiers-51140-31187369/

This was posted in Bdaily's Members' News section by Brian Moore .