Report comment

It has been reported that the £300,000 was repaid by one of the directors (rather than by the company), in which case there would be no question of the payment being a preference.

However, if it is correct that the money came from a director, further questions arise. How was the director in a position to pay £300,000 out of his own bank account (ie, where did that money come from in the first place)? Why would a payment by a third party (ie, the director) extinguish the company's liability to repay the money, unless the Council agreed that it would?

Under the FOIA 2000, the Council has been asked to disclose a copy of its (or its solicitors') relevant correspondence with Asons and the director (or their solicitors). It has failed to produce it.

As a firm of accountants, it is hard to see how KPMG are in a position to express any views on questions of law. If there is no rationale (or "audit trail") for the payment (or the method of the payment), it cannot sensibly be said that there is nothing to worry about. The reality is that it will now fall to those acting for Asons' other creditors to investigate the matter fully.