"The chain of insolvencies appears to contain more examples of phoenixism a process when companies are liquidated and directors are able to rise from the ashes with a new entity, free of debts. HM Revenue and Customs (HMRC) has estimated that phoenixism, which is generally legal, cost the exchequer about 22% of the 3.8bn of tax losses reported in 2022 to 2023."
"In the latest case, an administrator's report details how two Hampshire-based recruitment companies Sert Group and Sert Training collapsed in January and were acquired for 196,304 by an unconnected buyer that insisted the previous management remained in place. The management, which includes Sert chief executive Mark Edwards and chief financial officer Ben Knight, had run two earlier iterations of the same business that had also gone into administration."
"Together, the three insolvencies appear to leave creditors 7.6m out of pocket, including about 4.5m owed to HMRC, according to research compiled by business data firm Tech City Labs. In February 2022, Edwards and Knight were directors of a recruitment business called 3R Global when it had its assets acquired by Sert Workforce Solutions for 60,000 after collapsing into administration."
A Hampshire-based recruitment chain has undergone three insolvencies in four years, with the same management team remaining in place across iterations. The latest acquisition involved Sert Group and Sert Training collapsing in January and being purchased for £196,304 by a buyer who retained previous management, including CEO Mark Edwards and CFO Ben Knight. These three insolvencies collectively left creditors £7.6 million out of pocket, including approximately £4.5 million owed to HMRC. This pattern exemplifies phoenixism, where companies liquidate and directors establish new entities free of debts. HMRC estimates phoenixism accounts for 22% of the £3.8 billion in tax losses reported in 2022-2023, representing a significant drain on public finances.
Read at www.theguardian.com
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