Norwich MPs in Connaught probe appeal

Norwich's MPs have appealed for evidence of misconduct by the directors of former Norwich City Council contractor Connaught after government ministers confirmed the company's bosses were being investigated.

Connaught went into administration last September. About 300 workers in Norwich who worked on city council housing maintenance lost their jobs, while dozens of local companies were left out of pocket.

Norwich MPs Chloe Smith and Simon Wright have been calling for a investigation into what went wrong with the city council's contract with the Exeter-based company, but also for a probe into Connaught's behaviour nationally.

Now business ministers Mark Prisk and Ed Davey have confirmed that the firm is being investigated under the Company Directors Disqualification Act 1986 and the city's MPs have appealed for workers and businesses in Norwich to present evidence as part of the probe.

The administrators KPMG have to report by March 8 to ministers on whether or not the conduct of the directors makes them unfit to manage companies.


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Miss Smith, Conservative MP for Norwich North said: 'People are still angry and aggrieved at how Connaught fell and took with it so many Norwich jobs.

'I urge ex-employees of Connaught and any local firms affected by the collapse now to give in any remaining evidence they may have.'

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Mr Wright, Liberal Democrat MP for Norwich South, said: 'It's very important that any evidence of misconduct is reported in time to be considered.

'I would urge any individuals or creditors with concerns to write to me or Chloe Smith, or to contact the administrators KPMG direct as soon as possible.'

A spokeswoman for KPMG confirmed they were compiling the report. The Insolvency Service would ultimately make the decision on whether the directors should be banned from running businesses in the future.

Glass manufacturers Ecoglass, based in Weston Road, Norwich, is one of dozens of companies owed money following the collapse of Connaught.

Director Gaby Mendham said: 'We are a very strong company, but we were badly hurt by Connaught. We would support wholeheartedly the call by Chloe Smith and Simon Wright for evidence about misconduct.'

Norwich City Council, which signed a �17.5m contract with City Hall last year to maintain and fix some 17,000 council homes, has always insisted it had no way of forecasting the collapse of the company.

The city council has always defended the signing of that contract despite concerns Connaught's bid was 'abnormally low' and at least �5m lower than the amount the next lowest bidder.

Steve Morphew leader of Norwich City Council said he was disappointed that the scope of the investigation the government ministers had confirmed, which can lead only to directors being banned from running companies, was so narrow.

He said: 'Clearly, the information we relied upon deserves to be called into question. I was hoping the request from the two MPs to the minister would have brought about a more wide ranging investigation and I suppose we are still waiting for that.

'But at a more local level, in the meantime, I would welcome any compensation payments to local firms who have suffered because of Connaught.'

Connaught is understood to be subject to two investigations by City watchdog the Financial Services Authority, over whether Connaught fully disclosed its dire financial condition to investors ahead of a profits warning last year and over the sale of shares by managing director Peter Jones before that warning was announced.

The FSA will not comment on the issue or even acknowledge that the investigations are taking place, but it is their findings which could lead to fines or criminal proceedings.

The MPs urged people to write to them at: Chloe Smith, Office 1GF, Diamond House, Vulcan Road North, Norwich NR6 6AH; Simon Wright, House of Commons, London SW1A 0AA or the administrators - for the attention of Richard Heis, Richard Hill and Richard Fleming at KPMG, 8 Salisbury Square, London EC4Y 8BB.

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