Sunday 21 January 2018

Bloxham staff won't be paid this month as liquidator to probe firm

Donal O'Donovan

Donal O'Donovan

Administrative staff and others who lost jobs following the collapse of Bloxham Stockbrokers will not be paid this month, while some senior executives including former managing partner Pramit Ghose have already taken up new jobs at rival Davy.

Bloxham was put into liquidation on Thursday following a dramatic collapse of the firm after the discovery of financial irregularities last weekend.

Under a last-minute deal sealed last Sunday, rival firm Davy bought an asset management business from the collapsing firm for €3.6m, and brought forward an already agreed deal to buy a private client business for €2.2m, before markets opened on Monday.

Twenty-one staff, including the managing partner of Bloxham, Mr Ghose, have transferred to Davy under that deal.

A number of staff, but not Mr Ghose, were already due to transfer to Davy under a previous agreement.

Yesterday, the remaining 35 Bloxham employees not transferring to Davy were told by liquidator Kieran Wallace of KPMG that they would only receive a statutory redundancy payment, and would not be paid in June.

Last night, former staff said they were shocked by the news.

The firm's partners assured them as late as last Tuesday that they would be paid in June, staff told the Irish Independent.

However, that was before the partners met on Thursday and agreed to seek the appointment of a liquidator.

The High Court appointment of a provisional liquidator to Bloxham included granting Mr Wallace powers to investigate the company, its partners and its employees.

The liquidator's probe into the collapse of Bloxham is likely to focus on how the firm's financial position came to be misrepresented, possibly for as long as five years, and who knew the true financial position and when.

A second court hearing following the application for a liquidation is due to be held on June 25.

The Financial Regulator moved against Bloxham a week ago after being alerted that the firm had overstated its capital reserves by about €5m, creating the impression that it had enough cash set aside to meet regulatory requirements.

That move by the regulator was part of a wider probe of the entire stockbroking sector.

The unprecedented investigation is understood to be ongoing.

Irish Independent

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