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GSS sought network membership in 2001
Page 12
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CM INVESTIGATION
• by Dominic Perry Pallet network Palletways, which was at the centre of a row involving CDL Logistics over coverage of its Cardiff and Newport postcodes, was previously courted by a firm run by some of CDIZs directors and staff, CMcan reveal.
The row broke out in February after longstanding Palletways member Cardiff Despatch ceased trading and its goodwill was bought by CDL Logistics. CDL believed that it was buying membership of Palletways as part of this but when this turned out not to be the case a furious row developed (CM20-26 Mar). At present both sides are threatening legal action over the problems, each claiming that the other awes them money.
However, CM investigations revealed that several of CM directors, shareholders and staff had connections with other South Wales firms which had collapsed owing creditors thousands. One in particular, Global Specialist Services, appeared to have traded insolvently and had paid other companies run by its directors ahead of its hard-pressed creditors (CM27 Mar-2 Apr).
Additionally the liquidator's report for that firm showed that one man, Michael Mitchell, had been acting as shadow director—Mitchell was until recently employed by CDL as a salesman. His sister Christine, a former director of Global Specialist Services, is a joint shareholder in CDL and Mitchell's wife is a ctirector.
But new documents obtained by CMshow that back in November 2001 Global Specialist Services was trying to join the Palletways network. One letter from Mike Mitchell to Palletways reads: "With reference to my colleagues' recent discussions with yourselves regarding a possible trading relationship between our two companies. I understand you may have some concerns as to our credit worthiness."
Attached with the letter are Global Specialist Services' audited accounts and management accounts. The latter, actually with the heading Global Specialised Services, showed the firm as of September 2001 to be making around 2800,000 gross profit. According to the liquidator's report, by this stage Global Specialist Services was already insolvent and had called in administrators in June that year when it had debts of 2180,000, a far cry from its supposed 2800,000 gross profit.
lf, however, the accounts were for Global Specialised Services LLP, another of Mitchell's firms, then it appears that there may have been some confusion as to which firm Palletways was dealing with.
On the other hand, if they were the accounts for Global Specialist Services as claimed then Palletways was being supplied with financial information that, at the very least, was grossly inaccurate.
In fact, one former insider claims that the LLP was created to confuse Global Specialist Service's subcontractors and that Mitchell may have been looking for a way of getting rid of GSS Ltd and came up with the idea of opening the LLP.
"I'd say they did it deliberately to mislead. But maybe fm based as all the couriers we were using were friends [of mine] and maybe we put a lot of them out of business," he says.
Additionally it appears that the management at the 'group' attempted to blame Keith Tromans, a former director of GSS Sameday—which later became COL Logistics—for serious lasses at the firm. In all Tromans was held accountable for some 115,000 of debts run up by the firm, something he denies. In fact he was asked to sign a "covenant" accepting blame for the losses. A statement produced for Tromans reads ominously: "You were not forced to sign a covenant. 10 employees will testify to no coercion in signing."
CM has tried to contact Mr and Mrs Mitchell but they did not respond to our calls.