XX XXXXXXX XXXXX. What am I to make of the fact that it coincides with a bigger fee, being double the fee, being paid, then, to Xx Xxxxxxx? XX XXXXXXXXX: My Lord heard what Mr Xxxxxxxx said about that. With regards to Xx Xxxxxxx, he felt that there was a bit of a squeeze being put on him. I can't remember his exact words. But my Lord has heard the evidence on that and will make of it what he will. But -- XX XXXXXXX XXXXX: The two things do coincide, in the sense that, at the same moment that the half per cent stops, the one per cent kicks in. XX XXXXXXXXX: My Lord, yes. My Lord, I accept that. And Mr Xxxxxxxx has given his explanation on that point insofar as Xx Xxxxxxx is concerned. My Lord knows full well the details around the PwC audit, and I don't propose to take my Lord through that. I went through it in some length in the opening. But the conclusion is that they had all the information they needed, everything they wanted, and they produced the audit, unqualified, and there is no way that the Surge team would have been in the know that they didn't have all the material that they needed or wanted. So, clearly, when moving forwards, they moved forwards in the knowledge that PwC endorsement or the unqualified audit was in existence. The same point for Ernst & Young, my Lord. As I said before, clearly, the audit had the impact of attracting more investment, and we can see that from the graphic that's been shown. But, my Lord, prior to the PwC report, as I said, and I'm concluding now, prior to the PwC report, there were a layer of advisers involved, which gave great comfort; the best advisers, as Mr Xxxxxxxx was concerned. They, at Surge, told everybody about their fee. They were in the process of recording calls and offering them up. They didn't prevent Xx Xxxxxxxxx from scrutinising the material. They gave him what he needed. They offered Xxxx Xxxxxxx up to him for him to speak to him if he wanted to. They weren't pressured into signing the Surge/LCF agreement at the request of Xx Xxxxxxx because they didn't want to jeopardise their VAT position. There were clearly VAT implications, as my Lord will recall. But notwithstanding that, they stood their ground, and that's quite telling because it ran the risk of bringing everything down for them if Xx Xxxxxxx was right, in that the auditor will want to take a closer look, wants to take a closer look at them, because they didn't have the signed Surge/LCF agreement. That could have caused major issues. But, clearly, Xxxxx Xxxx...
XX XXXXXXX XXXXX. What was the position at this time in relation to those companies? XX XXXXXX: I hope we can find out by going back to schedule 1 to the neutral statement of uncontested facts, which is in A1. It is the directors of LCF that we are looking for as at this date. It is going to be <A1/5> -- I'm going to say page 76. Let's have a look at page 76. No, it is page 70. XX XXXXXXX XXXXX: So, at the date of that letter, which was in August -- XX XXXXXX: It is Xx Xxxxxxx. Only Xx Xxxxxxx. XX XXXXXXX XXXXX: And then Xx Xxxxxx. XX XXXXXX: From 5 September. XX XXXXXXX XXXXX: Well, that document was, on the face of it, 6 September, the one which had the pictures. So, that would have included Xx Xxxxxx. That would have been correct. XX XXXXXX: Yes. But, in fact, the companies mentioned in the letter are not beneficially owned by Xx Xxxxxxx and Xx Xxxxxx. Bewl Holiday Homes was a Xxxx-Xxxxxxx company. Lakeview was -- I can't remember whether at this point we have moved from 75 per cent Xxxxxxx Xxxxxxx, 25 per cent Xxxxx Xxxx-Xxxxxxx, we say really Xxxxx Xxxx-Xxxxxxx, to the subsequent ratios of 71.25 per cent Xxxxxxx Xxxxxxx, 23.75 per cent Xxxxx Xxxx-Xxxxxxx, and 5 per cent Xx Xxxxxxx. But it is going to be one of those two iterations as at that time. Certainly, Xx Xxxxxxx -- we say Xx Xxxx-Xxxxxxx -- I will come to it, but we say the registration of the shares in Xxx Xxxx-Xxxxxxx'x name is very similar to the registration of the shares in Xx Xxxxxxx'x name. It is a nominee arrangement. In any event, it is not Xx Xxxxxxx and Xx Xxxxxx who own Lakeview. XX XXXXXXX XXXXX: Sanctuary? XX XXXXXX: We saw the chart. That one is, as at this date -- I'm going to have to go back. We saw Xx Xxxxxxx got the first 30 shares in Sanctuary -- well, certainly legal title to them on 25 June 2013, and he got a further 25 shares on 31 December 2013. So, I'm not entirely sure what was the position as at the date of that letter in respect of the other 50 out of 80 shares, which were in the two share certificates of 25 shares each, but it was presumably Xx Xxxxxxxx, who didn't resign as a director until December of that year, when he transferred some shares -- yes, that's right, we saw the December transfer of 25 shares was from Xx Xxxxxxxx to Xx Xxxxxxx. The other 25 -- I don't know, I'm afraid, whether it would have been Xxxx Xxxxxxx or Xxxx Xxxxxx as at the date of that letter, possibly Xxxx Xxxxxx. XX XXXXXXX XXXXX: The other thing that letter seemed to refer to -- I'm only looking at it ver...
XX XXXXXXX XXXXX. All right. But as a matter of -- without that follow-up question about the amounts, is it your evidence that that figure of 1.634 million should be the same 16?
XX XXXXXXX XXXXX. Ar t i cl e 2. Obl i gat i ons of t he Part i es. It is speci f i cal l y agreed t hat the Par t i es’ responsi bi l i t i es under thi s Agreement are l i mi t ed to the t erms of thi s Agreement and nei t her Par x x xxxx l have any ot her responsi bi l i t i es or obl i gat i ons. It is f ur t her agreed that nei t her Par t y shall have any l egal or f i xxxxx xx x x abi l i t y wi t h respect to thi s Agreement.
XX XXXXXXX XXXXX. Did it own the shares or did the individuals own the shares? XX XXXXXX: They were never issued. There were never any such shares. XX XXXXXXX XXXXX: Right. XX XXXXXX: But I will come to that in a moment. XX XXXXXXX XXXXX: Sorry, let me just remind myself. Okay, the simple point, you say, is that there were no shares. XX XXXXXX: So that's the first thing, the guarantee. The second thing is that London Group LLP executed a debenture in favour of LCF. That's <MDR00007514>. My Lord can see it is dated 29 April 2017. London Group LLP is the chargor. At page 25, we see what it charged. First:
XX XXXXXXX XXXXX. Do you want to complete your answer?
XX XXXXXXX XXXXX. I take your point that there is no -- you make the very simple point that there is no mention of Xx Xxxxxxxx, but the question then will be whether what is pleaded is sufficient to bring this in. Are you content to continue on that basis? XX XXXXXXX: Absolutely, my Lord. XX XXXXXXX XXXXX: So, I will take it as a standing point that you are not to be taken to have waived any objections you have to the pleadings by not intervening at this stage. XX XXXXXXX: Yes, I'm grateful for that clarification, my Lord. Indeed, there are several other areas which are similar to this, not least the Sanctuary and SAFE loan area, but I will deal with all of that in my opening. I'm grateful for the clarification. Thank you.
XX XXXXXXX XXXXX. I think the question was were you aware that large amounts of money had been paid to companies associated with Xx Xxxx-Xxxxxxx and Xx Xxxxxxx?
XX XXXXXXX XXXXX. It also says there is a loss for the year there of £1.2 million. XX XXXXXX: Yes, there are continued -- XX XXXXXXX XXXXX: At the bottom. XX XXXXXX: That's right. It doesn't make money, it continues to make losses, and loans are advanced to prop it up and its position keeps getting worse. Consistent with that is the Mazars valuation of AML that we see at <MDR00213396>. My Lord will see that it's headed "Asset Mapping Limited. Company valuation as at 28 February 2019". On page 2, we see the genesis of it. It is addressed to Asset Mapping Limited. "Valuation of A ordinary shares in Asset Mapping Limited": "We have been asked to provide a valuation of the A ordinary shares in Asset Mapping Limited for tax purposes in relation to the proposed transfer of the A shares between shareholders and employees of Asset Mapping." On page 7, they provide information about financial performance, profit and loss. They set out the turnover. My Lord can see the financial year 2017, the turnover has been £437,373; for LTM 18 -- what does "LTM" stand for? I knew. XX XXXXXXX XXXXX: "Last 12 months".
