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Back to Rogue Traders case summary.


Back to Documents in support of Rogue Traders case.

10 October 2000



To: all creditors and interested parties. 

I am a director and creditor of JML.  Some of you will be aware of the events and circumstances surrounding the promotion, incorporation, directing into serious insolvency with no realistic prospect of success, and subsequent liquidation of the company. 

Michael Turner promoted JML to me in 1994.  His solicitor, Steven Daultrey at the solicitors’ practice of Francis Read in Mayfair, London, was to conduct due diligence in the formation of JML. A meeting was arranged with Mr Daultrey at the offices of Francis Read for that purpose.  The company (JML) was subsequently formed by accountants/auditors Body Dubois of Esher, Surrey, who also knew Mr Turner and who were fully apprised of the type of business proposed and that it would be initially capitalised by me.  Shortly after its incorporation, while it was trading modestly, JML sustained a large credit fraud, the deals leading to which were orchestrated by Mr Turner who had introduced the perpetrators to the company. The fraud seriously compromised the company, which I reported to the police although Mr Turner was reluctant to do so. Mr Turner and the auditors subsequently showed the losses as a legitimate business debt on JML’s accounts. 

JML had not at that time committed itself to premises, third party loans, or other contractual liabilities.  Despite its insolvent state, however, Mr Turner and Mr Daultrey advised that there was no risk contained in continuing to direct the company as they were in a position to rescue it.  The rescue package included investment capital from one or a number of Mr Daultrey’s clients in the form of equity or debt, and from Mr Turner who was soon to be in receipt of separate, personal funds from Messrs Daultrey and Read, as they were acting for him - prior to the promotion and formation of JML - in another matter nearing conclusion.  

All creditors including its bank were made aware of JML’s status yet were induced to provide goods and services on credit to the seriously insolvent company on the strength of assurances given by Mr Turner and the solicitors.  Consequently, JML occupied leasehold premises in Teddington, Middlesex, and entered into other contractual arrangements of which many creditors are aware. Francis Read held the leasehold documents on which he had charged to advise. Coinciding with JML’s occupation of the premises, Mr Daultrey moved to another Mayfair firm of solicitors, Donnellan & Co, in Bruton Street, the principal of which was Richard Donnellan. 

JML incurred large and numerous debts during the course of 1995 during which period Mr Turner and Mr Daultrey continued to give assurances as previously described.  JML was nevertheless placed into liquidation on 21st February 1996 in the face of insurmountable debts.  The Law Society, amid a police investigation, closed down Mr Daultrey’s employer, Donnellan & Co.  The date of its closure was 21st February 1996, which is certainly no coincidence.  My investigations revealed allegations of large-scale misappropriation of clients’ funds at Donnellan & Co.

The Law Society’s own investigations, which are available in support hereof, revealed “disgraceful” absence of professional standards and criminal activity at Donnellan & Co for which one of the solicitors involved is currently serving a jail term. 

Mr Daultrey, it transpired, had been struck off as a solicitor in 1982 for making misleading statements to clients and for misappropriating their money. He had at no time been reinstated to the roll as a solicitor.  Investigations by a creditor of JML revealed that Mr Turner has served a custodial sentence for fraud. 

Mr Turner, upon the advice of Mr Daultrey, had begun secret negotiations with a potential liquidator of JML shortly before the Law Society’s closure (intervention in the practice of) Donnellan & Co.  Mr Turner selected Nigel Mallett of NMGW in Bristol who, by prior arrangement with Mr Turner alone, had agreed to invoice Mr Turner at an inflated amount for JML’s assets in order to cover his minimal costs.  At this time, I was not aware of the credentials of Messrs Turner, Daultrey, and Donnellan & Co.  I was also unaware of the police investigation into Donnellan & Co and that it had been closed down amid numerous serious allegations made by other clients of the practice.  I am of the view that the liquidator was carefully selected on the grounds that, unlike the other professionals involved, he would have been unlikely to know Mr Turner’s disastrous and fraudulent history.  It is possible, therefore, that whilst Mr Mallett was appointed with intent to defraud creditors, he was an unwitting component in the schemes of Messrs Turner, Daultrey and Donnellan & Co.  His powers are limited by statute, the ultimate authority resting with the Secretary of State who, despite being in receipt of Mr Mallett’s report, has taken no apparent action.  I have not been permitted sight of the report. 

Mr Turner commenced trading as Jetstream Trading prior to and during the formal liquidation of JML, incurring large and numerous debts, which have not been satisfied. 

I allege fraud and fraudulent misrepresentation by Messrs Turner and Daultrey in the promotion, directing, and subsequent liquidation of JML to which substantial evidence now exists.  The auditors, Body Dubois, owed a duty of care to me as potential investor in JML, and to the company that they subsequently formed and whose accounts they audited for gain, although they are now ostensibly numbered among its creditors. The liquidator has not been discharged, yet he is unable to take action on the promotion and directing of the company, due to lack of funds.  He has agreed in principle to assign his rights in litigation to me. 

Whilst I formally reported his allegations and findings to the Company Fraud Squad and Thames Valley Police Fraud Squad, which had been investigating the matter of Donnellan & Co, they and the solicitors’ profession made considerable efforts to dissuade me from investigating matters further and from pursuing my allegations.

I continue my endeavours to take legal action against Mr Turner as a delinquent promoter and director of JML, against Mr Daultrey and his employers, and against other professionals involved and their regulating bodies in what has clearly been an unacceptable level of connivance. 

Given that JML’s representations to suppliers and customers were flawed and false from the outset, creditors are invited to respond to me expressing their continuing interest in the matter of its liquidation and the efforts of its board to secure satisfactory redress for all parties that have suffered loss over and above normal, legitimate business risks. 

Paul Bantock

10 October 2000