WORLD CUP referee Hugh Dallas is among 51 staff who have been axed by the receiver of the Wilson family housebuilding and windows companies, which owe about (pounds) 10m to Bank of Scotland, it emerged yesterday.
Dallas has now registered an interest with the receiver in mounting a management buy-out of the Watson Dallas windows business, which was this week put into receivership along with George Wilson Homebuilders and Wilson Manufacturing Holdings.
PricewaterhouseCoopers, the receiver, said on Wednesday that it had become apparent following an internal review earlier this year that ''the historic true profitability of the businesses had been overstated''. PwC added that it ''became apparent to management that the three groups had net liabilities and could not meet their commitments''.
Ernst & Young is auditor to
the Wilson family companies. It
yesterday decided not to give
any opinion on PwC's findings, citing client confidentiality.
The Wilson companies have long been customers of HBOS subsidiary Bank of Scotland. The receivership represents another significant blow for the bank, which was also the debt provider of Semple Cochrane.
Semple was brought to the brink of insolvency following a (pounds) 10m write-down of net assets in 2000, arising mainly from profits over-statement. It was Ernst & Young which uncovered this over-statement.
Bruce Cartwright, partner of PwC, is keeping the Wilson family businesses trading in the hope of finding buyers and said yesterday that he wanted ''clarity'' on the sale process by the end of this month.
The companies claimed a pre-tax profit of about (pounds) 500,000 on turnover of (pounds) 38m in the year to June 2001.
Referee Dallas took on the role of managing director of Watson Dallas - which has evolved from a business he and business partner David Watson sold to the Wilson family in 1997 - about eight months ago. He was previously a director, but assumed control when Stephen Wilson went to run George Wilson Homebuilders.
The 51 redundancies were announced yesterday by Cartwright, who had decided upon them on Wednesday but wished to speak first to the
Cartwright emphasised Dallas would be given no preferential treatment in his bid for Watson Dallas.
He said: ''We are treating this very much as a level playing field. I don't want to focus on an individual. I want to find buyers for all the businesses because I want to preserve the employment and the more people show interest, the more confident I will be of selling them.'' Cartwright said most of the redundancies - 38 - were at Watson Dallas at Perth and Cambuslang.
There have been four redundancies at George Wilson Homebuilders, based at Stonehouse in Lanarkshire, and nine at Wilson Manufacturing Holdings, which has operations at Lesmahagow and Stirling. This leaves 52
people at Wilson Manufacturing Holdings, 23 at George Wilson Homebuilders, and 140 at Watson Dallas.
A former senior employee of the Wilson family claimed yesterday that the group ran into trouble because it over-extended itself when it bought Wishaw-based facilities management business GF Sharp a few years ago. GF Sharp was separately put into receivership in early June.
The former employee said the Wilson companies owed (pounds) 10m or (pounds) 11m to Bank of Scotland, and one source familiar with the businesses confirmed this was ''about right''. The former employee said Bob McGowan, formerly of major Scottish contracting, development, and services company Robertson Group, had been brought in to run the Wilson businesses, looked through the books, and found things were worse than Bank of Scotland had believed.
Cartwright said McGowan had been brought in by a ''third party'', which was neither PwC nor Bank of Scotland, with the agreement of the Wilson board.
He added: ''He came in really to review things. Bob is working very closely with me now. He is very key and integral to what we are doing right now.''
Dallas declined comment on a claim from the former employee that McGowan, when he came in, had disparaged Dallas in front of staff from the receptionist up.
Ernst & Young yesterday declined to comment on PwC's claim that the Wilson businesses' profits had been overstated.
In a statement, it said: ''Client confidentiality prevents us from commenting on this issue, but we continue to work closely with the directors and shareholders of Wilson Homebuilders during this difficult time, and we
reiterate Ernst & Young's commitment to the highest standards in all of the services we provide to our clients.''
Cartwright said: ''It seems some of the asset valuations were over-stated.
''If money is not coming in as you might expect, there obviously is cash pressure.''
Asked whether he was talking about debtor valuations being too high, Cartwright replied it was ''across assets generally''.
And he emphasised: ''People who owe money to any of the groups should pay it as normal.''