Larrow bid: QC tells of Davis Bros' decline and fall
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• The first two days of public inquiry into the,applications for licences previously held by insolvent companies in the Davis Bros. group came to an inconclusive end in London last Friday.
Applications by Larrow Transport (Northern) Ltd., Charles Poulter Ltd., W. T. _Small and Tower Wharf Services Ltd. were listed to be heard by the Metropolitan LA, Mr. D. I. R. Muir, but after the allotted two days only the first of these was part-heard.
At the beginning of the inquiry Mr. Muir explained that all the applications received had been consolidated and published as new licences in substitution in order to assist would-be objectors. This, he realized, had now caused complications, for, as the inquiry had been put back from its original dates of September 25 and 26, any grant would now be made after the expiry date of the licences—September 30.
It was this .point that Mr. R. M. Yorke, for the Transport Holding Company, imme
diately raised; any grant, he contested, would be an anullity as the expiry date had passed. It was finally announced, after con sultation in Chambers, that the applications would be heard as published and would be reference for the new applications, which the applicants were advised to make immediately.
Mr. M. Davies, QC, for Larrow Transport, stated in his opening remarks that there was no attempt by Larrow to acquire a business formerly carried on by the Davis group by pretending that Larrow itself was not a Davis company. He then gave the history of the financial downfall of Davis Bros. (Haulage) Ltd.
In 1964 the Davis group, which had expanded in the '50s and early '60s to become a very large haulage concern, transferred its account from Barclays Bank Ltd. to the Anglo-Israel Bank Ltd. By 1967 substantial sums had been advanced by the bank to various group companies, whose financial liquidity had been affected by such things as the Government "squeeze", the increase in fuel duty and the price of road fund licences, restrictions in the increase of haulage charges and the companies' efforts to improve their systems of maintenance and repair. Added expense was incurred when 40 engineers were recruited in Turkey to staff the newly improved Wapping depot and £100,000 was spent on a 18facre site in Brentwood, Essex.
This draining of the group's financial resources had led in April 1967 to the bank's requiring debentures on the assets of all the group companies other than Charles Poulter Ltd. After asking the Davis brothers to reduce their overdraft of some £4m, in the spring of 1967 the bank nominated a chartered accountant to the group's board. This man, said Mr. Davies, was a skilled chartered accountant of complete integrity but did not have the ability to carry on a haulage business. Business in the early months of 1968 was not good. Davis Bros. (Haulage) Ltd. was sued by its creditors and the company was finally wound up in March/April.
The brothers, said Mr. Davies, had not wanted their work of many years in the haulage business to "melt away", so with the consent of the receivers they put in their applications. Though their record was not one to be proud of, the question that had to be answered was, suggested Mr. Davies, whether the conduct of the Davis brothers had been so bad that the LA must sever their connection with their life-long work.
Mr. Yorke, cross-examining Mr. S. (Sammy) Davis, suggested that it was not a novel experience for members of the Davis family to be associated with companies which went Out of business, "leavingsome people with less than 20 shillings for their pound". Mr. Davis denied being connected with any such companies but after Mr. Yorke had listed three or four he admitted that he had. in fact, been connected with these companies—to the extent of being director of some—but that he had had little say in their running.
Referring to the statements of affairs of the insolvent companies, Mr. Yorke claimed that they were incomplete. If no more financial details were given after the adjournment, he would submit that the Davis brothers had "left their creditors to whistle for a sum of £300,000".
No date has yet been arranged for the resumption of the inquiry, but it is expected that this will be some time in November.