Professor Steven Broomhead
Chief Executive
Mr R Buttrey
Gareth Hopkins
Reply via:
request-488206-
Assistant Director Customer
and Business Transformation
xxxxxxxx@xxxxxxxxxxxxxx.xxx
Quattro 5th Floor
Buttermarket Street
Warrington
WA1 2NH
22nd June 2018
Our ref:
FOI/CORP/2347 Dear Mr Buttrey,
Freedom of Information Act Request: Redwood Bank and Warrington
Guardian I am writing in response to your email of 31st May 2018 requesting information
about Council contact with the Warrington Guardian in relation to Redwood
Bank.
Please the Council’s responses to your enquiries outlined below.
1. Copies of any correspondence between the Council and the Warrington
Guardian newspaper that have mentioned either Redwood Bank Limited or
Redwood Financial Partners Limited.
Please see the attached enquiries from the Warrington Guardian newspaper
and the Council’s responses, in relation to either Redwood Bank Limited or
Redwood Financial Partners Limited.
In addition, the Council’s ICT team has completed a search of all emails that
have passed through our systems. They searched on header information
(Date, Time, To, From & Subject Line) and another for the specific phrases
“Redwood Bank Ltd” or “Redwood Financial Partners Ltd” during the past two
years. The search did not return any results. The method used cannot search
the body of emails or attachments to see if they contain references to
Redwood Bank Limited or Redwood Financial Partners Limited.
The Council does not implement journaling within email system, therefore we
cannot provide any emails that have previously been deleted. If we were to
manually search through the body of every email, this would involve 4,500
mailboxes which have been active during the past 2 years. To do so it would
take the Council a considerable amount of time to identify and review the
relevant mailboxes. There is also no guarantee that this search would find any
of the information you requested. If anything was found, it would take further
resource to provide the information you requested in a readable format.
Section 12 of the Freedom of Information Act 2000 allows a public authority to
refuse a request if the cost of providing the information to the applicant would
exceed the ‘appropriate limit’ as defined by the Freedom of Information and
Data Protection (Appropriate Limit and Fees) Regulations 2004:
“12 Exemption where cost of compliance exceeds appropriate limit
(1) Section 1(1) does not oblige a public authority to comply with a request for
information if the authority estimates that the cost of complying with the
request would exceed the appropriate limit”.
The Regulations provide that the appropriate limit to be applied to requests
received by local authorities is £450 (equivalent to 18 hours of work). In
estimating the cost of complying with a request for information, an authority
can only take into account any reasonable costs incurred in:
“(a) determining whether it holds the information,
(b) locating the information, or a document which may contain the
information,
(c) retrieving the information, or a document which may contain the
information, and
(d) extracting the information from a document containing it”.
For the purposes of the estimate the costs of performing these activities
should be estimated at a rate of £25 per hour. The Council estimates that the
cost of supplying any information would exceed £450 and 18 hours of staff
time.
To be within the cost limit or 18 hours, we would need you to provide a list of
Council members of staff for us to search their mailboxes. If you provide a list,
we will estimate the time it would take to provide any information to you.
The Council is currently refusing this part of your request under section 12 of
the Freedom of Information Act 2000.
2. The subject matter and dates of any telephone conversations between the
Council and the Warrington Guardian that have mentioned either Redwood
Bank Limited or Redwood Financial Partners Limited.
The Council does not hold any information in relation to any telephone
conversations between the Council and the Warrington Guardian that have
mentioned either Redwood Bank Limited or Redwood Financial Partners
Limited. Therefore the Council does not hold the information as specified in
your request.
3. Have any meetings between the Council and the Guardian been held in
which either Redwood Bank Limited or Redwood Financial Partners Limited
were discussed, and if so what were the dates, the subject agenda and who
from the Council and Warrington Guardian were present at any meeting.
(Add paragraphs in response to the information requested and refer to
enclosures where appropriate).
The Council does not hold any information about meetings between the
Council and the Guardian being held in which either Redwood Bank Limited or
Redwood Financial Partners Limited were discussed. Therefore the Council
does not hold the information as specified in your request.
If you are not satisfied with my response to your request for information, you
may ask the Council for an internal review of this decision. You should write to
Paul Clisby, Legal Services Manager, Warrington Borough Council, Quattro,
Buttermarket Street, Warrington, WA1 1BN, giving details of your complaint.
You should do this as soon as possible, or, in any case, within two months of
your request being refused.
If, following the outcome of the internal review, you remain dissatisfied with the
Council's response to your information request, you have the right under section
50 of the Freedom of Information Act 2000 to appeal to the Information
Commissioner at:
Information Commissioner's Office
Wycliffe House
Water Lane
Wilmslow
Cheshire
SK9 5AF
Telephone: 0303 123 1113
Fax: 01625 545 510
Email
: xxxxxxxxx@xxx.xxx.xxx.xx
Yours sincerely,
Gareth Hopkins
Assistant Director – Customer & Business Transformation
Corporate Services Directorate
Please see the below enquiries from the Warrington Guardian newspaper and the Council’s responses, in relation to either Redwood Bank
Limited or Redwood Financial Partners Limited:
Email enquiries from the Warrington Guardian
Date received Council’s Response
Hi,
18/05/2018
“The Council approved the
investment of up to £30m to
This is a separate matter which is also linked to Redwood Bank – can a comment be
acquire and maintain a 33%
provided, please?
share in the Bank. The new
The Companies House records for RFPL show that on the 13/4/2018, 2,095,667 new shares
shares being issued have not
were issued.
weakened our position and
we still maintain this 33%
The confirmation statement, which should follow, has not yet been published so it is not yet
stake.”
known to whom these shares were issued.
Is the council concerned by the issuing of these new shares?
Does it know who these were issued to? If so, who?
If not issued to the council, it appears that the council’s major 33.3% stake has been
weakened. Does the council believe this is the case?
Email enquiries from the Warrington Guardian
Date received Council’s Response
Campaigner Richard Buttrey believes there is a ‘serious maladministration’ going on at
18/05/2018
“As part of the process of
WBC.
establishing Redwood Bank,
He raised ‘issues’ around the Investment in the bank generally referred to as Redwood
the Council utilised external
Bank, in which WBC have obtained a 33% share in for £30 million.
legal and financial advisors
-The first £10m part of the £30m investment in Redwood Bank that has been paid to
as well discussing at length
Redwood Bank is ‘ultra vires’ in that it has been made ‘contrary to the resolution’ that the
with our external auditors to
WBC Executive Board meeting passed in January 2017.
ensure the suitability,
-Redwood Bank has committed an illegal offence contrary to the Companies Act 2006.
sustainability and legality of
Here is addition info he has sent:
the deal.
This matter concerns WBC's investment of £30m in the banking company Redwood
“We can confirm that the
Financial Partners Ltd and the timing of a change to the Company's Articles of Association.
Articles of Association were
Warrington Borough Council (WBC) became a shareholder in Redwood Financial Partners
adopted prior to the Council
Ltd (RFPL) on 5 April 2017 with a shareholding of 33% of the company.
becoming a shareholder in
WBC was not a signatory to that resolution. The Companies Act 2006 requires a change of
the Bank. As such the
Articles be approved by 75% of shareholders, and since WBC held 33% of the shares (other
Council was not required to
shareholders 67%) on that day the resolution was passed illegally and contrary to the
sign the resolution.
Companies Act.
“We have received detailed
It should be noted that Jonathan Rowland with 25% of the shares in RFPL obtained power of
requests for information from
attorney to act on behalf of other shareholders on 31 March 2017 only five days before the
members of the public about
actual change of Articles on 5 April 2017, and he alone signed the Special Resolution.
Redwood Bank and we will
Why was this change rushed through? It would seem it was a (failed) attempt to change the
continue to respond to these
Articles before WBC became a shareholder.
individual queries.”
The effect of the (illegal) changes to the Articles are in many ways prejudicial to the interests
of WBC.
The change of Articles on 5/4/2017 renders any due diligence undertaken by WBC with
respect to the Articles of Acorn Global Investments Ltd, (the previous name of RFPL until the
name change on 3 February 2017) prior to then largely redundant, since the Articles are now
different in so many ways to that which WBC and presumably the Prudential Regulatory
Authority were concerned with during the due diligence exercise.
This change of Articles by JR must call into question the bona fides of JR whose actions
have arguably put at risk WBC's investment in RFPL.
Question 1. As a majority shareholder what information do WBC have which has caused
them to take no action in the last 16 months about the illegal change in the Articles, and
what steps will WBC now take to have the change of Articles resolution made null and void
and the original articles reinstated? The simplest way would be to call for a Special
Resolution of shareholders to have the original Articles reinstated. The difficulty with this is
that WBC do not hold 75% of the shares and unless 42% of the other shareholders (i.e.
Jonathan Rowland and Ruskin Capital Ltd) agree, such a resolution would fail. WBC seem
to be in a Catch 22 position. The current articles were made illegally and need to be
changed but WBC do not have the necessary number of shares with which to call a special
resolution.
Question 2. What reasons (if any) are preventing WBC taking action under Section 168 of
the Companies Act 2006 to have JR removed as a Director for both his offence of signing
the Special Resolution when he was not permitted and his failure of the general duty to
exercise reasonable care pursuant to Section 174 of the Companies Act 2006?
Question 3. What steps if any will WBC take to ensure JR cannot make any decisions that
are prejudicial to WBC's interest in either RFPL or Redwood Bank Limited (in which JR is
also a director)?
An associated matter is the decision made by the Executive Board on 16 January 2017 to
commit to the Investment in Redwood Bank (RB). I'm not party to the details discussed
during the Private Part 2 of the meeting but throughout the Agenda and Minutes reference is
made to an investment in Redwood Bank not Redwood Financial Partners Ltd.
Question 4. Why was the Investment made in Redwood Financial Partners Ltd which was
not in existence on the 16 January 2017 when the Executive Board sanctioned the
investment in RB?
WBC clearly believed that the Articles could not be changed without their approval.
Given the illegal change of Articles we now know that belief was ill-founded.
WBC also identified future actions that were required before the investment be approved.
Mr Buttrey believes this whole matter calls into question the degree of due diligence, scrutiny
and monitoring that has taken place.
He said: "The Labour government's reason for having Elected Mayors was to make it clear
to councillors and public alike who is ultimately accountable.
“In addition a Mayor could appoint a politically balanced Executive Committee where all
views are heard."
Would it be possible for a comment in response to each of the above questions?
And would you like to respond to any other concerns above, including concerns over
the investment being ‘ultra vires’, the investment being made ‘contrary to the
resolution’ passed by exec board, and his quote at the bottom?
Email enquiries from the Warrington Guardian
Date received Council’s Response
During Tuesday’s Organisational Improvement and Development Policy Committee
19/04/2018
“When the Council explores and
meeting, concerns were raised over councillors not being informed about major
pursues commercial opportunities, it
decisions by the authority that contain commercially sensitive information.
is not possible to fully brief all
members as it could risk a breach of
Chairman Cllr John Kerr-Brown acknowledged the commercial sensitivity element
contracts and non-disclosure
but said ‘clearly there is an issue about members being informed’.
agreements.
He asked for ‘more openness, so members are aware of what is happening’.
Clearly though, there is a balance,
and we will continue to brief
He highlighted the Redwood Bank investment.
members at the appropriate time for
all relevant investment decisions.
And he said there should be something in place to ensure members are better
informed about potential investments ‘rather than being told afterwards’.
As agreed in the recent Treasury and
Capital strategy approved by Full
He was told the matter would be referred back to Lynton Green.
Council in February, we are
committed to offering more training to
1) Can a comment be provided on whether the council intends to provide
members to help them better
‘more openness’ and better ‘inform’ councillors about matters that have
understand the Council’s investments
commercially sensitivity information in the future?
and operating context. We have
previously held optional training
2) Would it like to respond to any other concerns above, including
sessions for members to better
concerns over councillors merely being told ‘after’ a decision is made?
understand investment and treasury
decisions and will continue to offer
Thanks
guidance.”