Loan Default by Digital City Ltd & Change of Directors at Avidity Consulting Ltd

Geoff Reid made this Freedom of Information request to Swindon Borough Council

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The request was partially successful.

Dear Swindon Borough Council,

Freedom of Information request re: Avidity Consulting

Background information relevant to my information request:

Swindon Borough Council is involved in a Public/Private Partnership with Digital City (UK) Ltd.

The purpose of the above partnership is to deliver a Borough-Wide Wireless Internet system to Swindon via a project vehicle known as ‘Getsignal’.

The project is at least one year behind schedule, has failed to complete even its pilot-phase in Highworth, has run out of money and was recently described as having ‘stalled’ by Swindon Borough Council.

Swindon Borough Council made a loan facility of £450,000 available to Digital City (UK) Ltd, of which £400,000 has been drawn down. John Richard ‘Rikki’ Hunt is the Chief executive officer of Digital City (UK) Ltd.

The loan facility of £450,000 was nine-hundred times greater than the £500 credit limit suggested by a credit assessment agency engaged by Swindon Borough Council to run credit checks on Digital City (UK) Ltd prior to offering a loan to that company.

At a meeting of Swindon Borough Council’s Scrutiny Committee on Monday the 7th of February 2011 it was disclosed by Swindon Borough Council that Digital City (UK) Ltd has defaulted on its loan repayments to the Council since November 2010. John Richard ‘Rikki’ Hunt was present at this meeting in his capacity of Chief executive officer of Digital City (UK) Ltd.

Up to the date of this information request, three Interest payments on the loan have not been made and they were due on the 4th November 2010, 16th December 2010 and 20th January 2011. I understand that Swindon Council expects Digital City (UK) Ltd to similarly default on further interest repayments as they become due.

I understand that 30% of Digital City shares are held by Avidity Consulting Ltd. Rikki Hunt is the Chief executive officer of Digital City (UK) Ltd and, until the 31st of December 2010 Mr Hunt was also the sole director of Avidity Consulting Ltd.

Records held at Companies house show that Mr Hunt resigned as a director of Avidity Consulting Ltd on the 31st of December 2010 and that his wife, Laura Hunt replaced him as Director of that company on the same date. This resignation and change of Director was not disclosed or discussed by Mr Hunt, cabinet members or officers of Swindon Borough Council at the 7th February scrutiny meeting.

I note that the Deputy Leader of Swindon Borough Council, Councillor Garry Perkins, is also a director of Digital City (UK) Ltd and that Cllr Perkins was publicly denying Digital City (UK) Ltd had defaulted on its loan commitments to Swindon Borough Council three months after the first default on the 4th of November 2010.

My request for information is therefore as follows:

1. At what point prior to the 7th of February meeting of the scrutiny committee did the Deputy Leader of Swindon Borough Council – Councillor Garry Perkins, (also Director of Digital City (UK) Ltd), learn that a company he is a director of, (i.e Digital City (UK) Ltd), had defaulted on its commitments to pay interest payments to Swindon Borough Council on the loan of £400,000 made to it by the Council? In all instances: How and when did Councillor Perkins learn that the company he is a Director of had been defaulting on a loan made to it by a Council of which he is also serving as Deputy Leader?

1a. At what point prior to the 7th of February meeting of the scrutiny committee did the Deputy Leader of Swindon Borough Council – Councillor Garry Perkins, (also Director of Digital City (UK) Ltd), learn that that Mr Hunt, his fellow director at Digital City (UK) Ltd, had resigned his directorship of Avidity Consulting Ltd on 31/12/10? In all instances: How and when did he learn of Mr Hunt’s resignation?

2. Prior to the 7th of February meeting of the scrutiny committee did the leader of the council, Councillor Roderick Bluh know that Mr Hunt had resigned his directorship of Avidity Consulting on 31/12/10? In all instances: how and when did he learn of Mr Hunts resignation?

2.a At what point prior to the 7th of February meeting of the scrutiny committee did the Leader of Swindon Borough Council – Councillor Roderick Bluh – learn that Digital City (UK) Ltd had defaulted on its commitments to pay interest payments to Swindon Borough Council on the loan of £400,000 he had been instrumental in providing to that company in his capacity as leader of the Council? In all instances: How and when did Councillor Bluh learn that Digital City (UK) Ltd was defaulting on the loan?

3. At what point prior to the 7th of February meeting of the scrutiny committee did Councillor Mark Edwards learn that Digital City (UK) Ltd had defaulted on its commitments to pay interest payments to Swindon Borough Council on the loan of £400,000 he had been instrumental in providing to that company in his capacity as lead member for finance? In all instances: How and when did Councillor Edwards learn that Digital City (UK) Ltd was defaulting on the loan?

4. Prior to the 7th of February meeting of the scrutiny committee were any other cabinet members informed that Mr Hunt had resigned his directorship of Avidity Consulting on 31/12/10? In all instances: How and when were they informed of Mr Hunts resignation and who informed them?

5. Prior to the 7th of February meeting of the scrutiny committee was the chair of the Scrutiny Committee advised by any officer(s) that Mr Hunt had resigned his directorship of Avidity Consulting on 31/12/10? ? In all instances: How and when was the chair informed of Mr Hunts resignation and who informed him?

6. Prior to the 7th of February was Stephen Taylor, Swindon Borough Councils Director of Law and Democratic Services aware that Mr Hunt had resigned his directorship of Avidity Consulting on 31/12/10? In all instances: How and when was Mr Taylor informed of Mr Hunts resignation and who informed him?

7. Prior to the 7th of February: Did Hitesh Patel, Swindon Borough Councils Director of Business Transformation know that Mr Hunt had resigned his directorship of Avidity Consulting on 31/12/10? In all instances: How and when was Mr Patel informed of Mr Hunts resignation and who informed them?

7a. Can Hitesh Patel confirm the date on which Swindon Borough Council registered a charge, (with the appropriate authority), on the equipment and/or assets of Digital City (UK) Ltd in respect of the £400,000 secured loan it obtained from Swindon Borough Council? Please supply documentary evidence that the charge was made, and that it was made within the required timeframe.

8. Prior to the 7th of February: Was Gavin Jones, Chief Executive of Swindon Borough Council aware that Mr Hunt had resigned his directorship of Avidity Consulting on 31/12/10? In all instances: How and when was Mr Jones informed of Mr Hunts resignation and who informed him?

9. Prior to the 7th of February: Was Celia Carrington, Deputy Chief Executive of Swindon Borough Council aware that Mr Hunt had resigned his directorship of Avidity Consulting on 31/12/10? In all instances: How and when was Celia Carrington informed of Mr Hunts resignation and who informed her?

10. Prior to the 7th of February: Was Stuart MacKellar, 151 Officer at Swindon Borough Council aware that Mr Hunt had resigned his directorship of Avidity Consulting on 31/12/10? In all instances: How and when was Stuart MacKellar first informed of Mr Hunts resignation and who informed him?

10a. Will Stuart MacKeller be reviewing the investment/loan, or other financial arrangements, agreements and understandings with Digital City (UK) Ltd, Avidity Consulting and aQovia Ltd ? In all instances: Now the loan has been defaulted on, what steps will Mr MacKellar be taking in his capacity as 151 Officer to recover the outstanding £400,000 loan and missed interest payments due from Digital City (UK) Ltd or other individuals and organisations?

11. Has, or will, the Head of Audit at Swindon Borough Council, be asked or required to audit the material facts of the WiFi update report (as presented to Scrutiny on Monday 7th February 2011) including, but not limited to, the circumstances surrounding the registration or non-registration of a charge against the assets of Digital City (UK) Ltd, the non payment of interest payments by Digital City (UK) Ltd 12. What steps is Swindon Borough Council taking to establish why Mr Hunt resigned as Director of Avidity Consulting Ltd and who is now in legal control of the 30% share of Digital City (UK) Ltd held by Avidity Consulting Ltd after Mr John Richard Hunt resigned and was replaced by his wife, Mrs Laura Hunt?

Yours faithfully,

Geoff Reid

Customer Services, Swindon Borough Council

Thank you for your email which has been forwarded to the FoI office for response.

Kind regards

Customer Services
Swindon Borough Council
Wat Tyler House
Swindon SN1 2JG
Phone: 01793 445500

E-mail: [Swindon Borough Council request email]
Website: www.swindon.gov.uk

show quoted sections

Sharon Druett, Swindon Borough Council

Dear Mr Reid,

Ref: FOI101000263262 Freedom of Information Request
Loan Default by Digital City Ltd & Change of Directors at Avidity Consulting Ltd

Thank you for your email received in our office on 10 February 2010.
The Council has a duty to respond 'promptly' to your request or no later than 20 working days,
which in this case is 10 March 2011.

I respond as follows to your requests for information:

1. At what point prior to the 7th of February meeting of the
scrutiny committee did the Deputy Leader of Swindon Borough Council
- Councillor Garry Perkins, (also Director of Digital City (UK)
Ltd), learn that a company he is a director of, (i.e Digital City
(UK) Ltd), had defaulted on its commitments to pay interest
payments to Swindon Borough Council on the loan of £400,000 made to
it by the Council? In all instances: How and when did Councillor
Perkins learn that the company he is a Director of had been
defaulting on a loan made to it by a Council of which he is also
serving as Deputy Leader?

Response:

Councillor Perkins says he cannot recall the exact time and circumstances when
he was made aware but it was done verbally and, therefore, not recorded information
under the FoI Act.

1a. At what point prior to the 7th of February meeting of the
scrutiny committee did the Deputy Leader of Swindon Borough Council
- Councillor Garry Perkins, (also Director of Digital City (UK)
Ltd), learn that that Mr Hunt, his fellow director at Digital City
(UK) Ltd, had resigned his directorship of Avidity Consulting Ltd
on 31/12/10? In all instances: How and when did he learn of Mr
Hunt's resignation?

Response:

Councillor Perkins says he cannot recall the exact time and circumstances when
he was made aware but it was done verbally and, therefore, not recorded information
under the FoI Act.

2. Prior to the 7th of February meeting of the scrutiny committee
did the leader of the council, Councillor Roderick Bluh know that
Mr Hunt had resigned his directorship of Avidity Consulting on
31/12/10? In all instances: how and when did he learn of Mr Hunts
resignation?

Response:

Councillor Roderick Bluh says he cannot recall the exact time and circumstances when
he was made aware but it was done verbally and, therefore, not recorded information
under the FoI Act.


2.a At what point prior to the 7th of February meeting of the
scrutiny committee did the Leader of Swindon Borough Council -
Councillor Roderick Bluh - learn that Digital City (UK) Ltd had
defaulted on its commitments to pay interest payments to Swindon
Borough Council on the loan of £400,000 he had been instrumental in
providing to that company in his capacity as leader of the Council?
In all instances: How and when did Councillor Bluh learn that
Digital City (UK) Ltd was defaulting on the loan?

Response:

Councillor Roderick Bluh says he cannot recall the exact time and circumstances when
he was made aware but it was done verbally and, therefore, not recorded information
under the FoI Act.

3. At what point prior to the 7th of February meeting of the
scrutiny committee did Councillor Mark Edwards learn that Digital
City (UK) Ltd had defaulted on its commitments to pay interest
payments to Swindon Borough Council on the loan of £400,000 he had
been instrumental in providing to that company in his capacity as
lead member for finance? In all instances: How and when did
Councillor Edwards learn that Digital City (UK) Ltd was defaulting
on the loan?

Response:

Councillor Mark Edwards says he cannot recall the exact time and circumstances when
he was made aware but it was done verbally and, therefore, not recorded information
under the FoI Act.

4. Prior to the 7th of February meeting of the scrutiny committee
were any other cabinet members informed that Mr Hunt had resigned
his directorship of Avidity Consulting on 31/12/10? In all
instances: How and when were they informed of Mr Hunts resignation
and who informed them?

Response:

Councillors Fionuala Foley, Peter Greenhalgh, Dale Heenan, Peter Mallinson, Brian Mattock,
David Renard and Keith Williams have no recollection of being made aware of these issues in the time period specified,
but if so it would have been done verbally and, therefore, have no recorded information under the FoI Act.

5. Prior to the 7th of February meeting of the scrutiny committee
was the chair of the Scrutiny Committee advised by any officer(s)
that Mr Hunt had resigned his directorship of Avidity Consulting on
31/12/10? ? In all instances: How and when was the chair informed
of Mr Hunts resignation and who informed him?

Response:

The Chair of the Scrutiny Committee was not aware prior to the meeting on
7 February. Currently we can find no written evidence of how the information
was passed on to him.

6. Prior to the 7th of February was Stephen Taylor, Swindon Borough
Councils Director of Law and Democratic Services aware that Mr Hunt
had resigned his directorship of Avidity Consulting on 31/12/10? In
all instances: How and when was Mr Taylor informed of Mr Hunts
resignation and who informed him?

Response:

The Director of Law and Democratic Services was not aware of this prior to 7th February.
He was told on the evening of the 9th February and this was done verbally by a councillor.

7. Prior to the 7th of February: Did Hitesh Patel, Swindon Borough
Councils Director of Business Transformation know that Mr Hunt had
resigned his directorship of Avidity Consulting on 31/12/10? In all
instances: How and when was Mr Patel informed of Mr Hunts
resignation and who informed them?

Response:

The Group Director Business Transformation was not aware of this prior to the 7th February.
He was informed on the 10th February via internal email.

7a. Can Hitesh Patel confirm the date on which Swindon Borough
Council registered a charge, (with the appropriate authority), on
the equipment and/or assets of Digital City (UK) Ltd in respect of
the £400,000 secured loan it obtained from Swindon Borough Council?
Please supply documentary evidence that the charge was made, and
that it was made within the required timeframe.

Response:

No charge has been registered .

8. Prior to the 7th of February: Was Gavin Jones, Chief Executive
of Swindon Borough Council aware that Mr Hunt had resigned his
directorship of Avidity Consulting on 31/12/10? In all instances:
How and when was Mr Jones informed of Mr Hunts resignation and who
informed him?

Response:

The Chief Executive was not aware of this prior to the 7th February.
He was informed on the 10th February via internal email.

9. Prior to the 7th of February: Was Celia Carrington, Deputy Chief
Executive of Swindon Borough Council aware that Mr Hunt had
resigned his directorship of Avidity Consulting on 31/12/10? In all
instances: How and when was Celia Carrington informed of Mr Hunts
resignation and who informed her?

Response:

The Deputy Chief Executive was not aware of this prior to the 7th February.
She was not informed or made aware of this until this FoI question was raised.

10. Prior to the 7th of February: Was Stuart MacKellar, 151 Officer
at Swindon Borough Council aware that Mr Hunt had resigned his
directorship of Avidity Consulting on 31/12/10? In all instances:
How and when was Stuart MacKellar first informed of Mr Hunts
resignation and who informed him?

Response:

The Director of Finance was not aware of this prior to the 7th February.
He was informed on the 9th February by the Director of Law and Democratic Services.

10a. Will Stuart MacKeller be reviewing the investment/loan, or
other financial arrangements, agreements and understandings with
Digital City (UK) Ltd, Avidity Consulting and aQovia Ltd ? In all
instances: Now the loan has been defaulted on, what steps will Mr
MacKellar be taking in his capacity as 151 Officer to recover the
outstanding £400,000 loan and missed interest payments due from
Digital City (UK) Ltd or other individuals and organisations?

Response:

The Director of Finance is supporting the ongoing discussions with external parties
with a view to recovering the outstanding loan.


11. Has, or will, the Head of Audit at Swindon Borough Council, be
asked or required to audit the material facts of the WiFi update
report (as presented to Scrutiny on Monday 7th February 2011)
including, but not limited to, the circumstances surrounding the
registration or non-registration of a charge against the assets of
Digital City (UK) Ltd, the non payment of interest payments by
Digital City (UK) Ltd

Response:

The Head of Audit has not to date been asked to audit issues coming out of
the Scrutiny meeting on 7th Feburary.

12. What steps is Swindon Borough Council
taking to establish why Mr Hunt resigned as Director of Avidity
Consulting Ltd and who is now in legal control of the 30% share of
Digital City (UK) Ltd held by Avidity Consulting Ltd after Mr John
Richard Hunt resigned and was replaced by his wife, Mrs Laura Hunt?

Response:

The Council does not hold information on this matter under the terms of the Freedom of information Act.
.

If you are dissatisfied with the service you have received in relation to your request and wish to make a complaint or request a review, you
should contact:

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Website: www.[Swindon Borough Council request email]

The complaints/review procedure involves a full review and an examination of all the information by the Council's Monitoring Officer.

If you are not content with the outcome of our conclusion, you may apply directly to the Information Commissioner's Office for a decision,
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The Information Officer can be contacted at:

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Email: [email address]
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If you require any further information concerning this matter, please contact me as detailed,
quoting the above reference number in any future communications.

Yours sincerely

Sharon Druett

Sharon Druett ([email address])
Freedom of Information Officer
Law and Democratic Services
Swindon Borough Council
Tel: 01793 463377
Fax: 01793 463405
Web: www.swindon.gov.uk

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