Case Study

Discovery of one the UK’s largest asset finance frauds

Brief

To enable a lessor to increase credit lines to Arena Television we were commissioned to value the existing asset base.

During the course of our work in checking the technical specification of equipment with the OEM it became clear that some of the assets could not exist. Upon further investigation by the lender our work was verified and as a result the company ceased trading days later and Administrator was shortly appointed .

Given that over 50 lessors registered claims to significantly more camera and lens assets than the company owned, there was a material shortfall.

Hence in order to allocate the correct assets to the lessors and to support the Administrator’s sale of the business and assets a detailed and accurate asset identification, verification and valuation was required.

Work

The assets operated by Arena included (21) outside broadcast trucks and tenders, a remote production facility, >100km cable and over 5,000 items of broadcast equipment (cameras, lenses, EVS, OB and sound equipment etc)

The immediate task was to reconcile the serial numbers of the equipment operated by Arena with the assets financed by lessors or subject to ROT, to accurately ascertain ownership.

55 lessors provided schedules of financed assets showing description and serial number. They had financed over 8,000 assets including 3 OB trucks.

Over 5,000 items of broadcast equipment were inspected over 3-weeks and using our asset valuation App created a digital footprint of each asset showing asset description, serial number and photographs (including the OEMs serial number plate). Specialist engineers were hired to (i) schedule the equipment installed in (3) new leased OB trucks to verify ownership and (ii) to access internal memories of equipment to verify the correct serial number v’s any counterfeit serial number plates.

Outcome

Our work was detailed and forensic enabling each lessor to understand the size and scale of the asset fraud, over £275m.Given the quantum of losses our work was challenged and successfully defended.

It also supported an ultimately failed business sale process leaving the Administrator and the lessors with no option but to ask us to sell the assets on a piecemeal basis.

The scope, challenges and outcome of this work can be viewed here.

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