Applecross boss attacks bank over payday action

Published on Monday 29 June 2009 21:44

THE former chairman of collapsed luxury housebuilder Applecross has launched a scathing attack on Bank of Scotland for putting his firm into receivership just before payday.

Graham Aggett claimed that the bank's move resulted in his redundant workers losing a month's wages.

Around 40 staff lost their jobs when the Edinburgh-based firm collapsed in May – with only a handful of workers retained to assist the receiver in selling off remaining assets.

Bank of Scotland, called in PriceWaterhouseCooper to dissolve Applecross three days before the pay for May was due to go into employee's bank accounts.

Now Aggett plans to write to the board of the bank – now part of Lloyds Banking Group – to demand a change in what he believes is the institution's "strategy" when dealing with financially-stricken firms.

Aggett, who launched Applecross with chief executive Colin Cumberland in 1979, explained: "I don't believe my staff will see a penny of the wages which are owed to them.

"I was very upset that they chose to time the receivership the way they did, keeping workers coming into work every day when they must have known that they were going to put the company into administration before they would get paid for the work they did."

He added: "It just seems like another way to save money. I believe they use this as a tactic and have done it more than once. From my point of view, that is a bad way to manage things."

"From the perspective of someone who has tried to be a people person as a manager, it is very disappointing. It is completely the reverse of being a caring employer, which is what they claim to be to their own staff."

After trading relatively conservatively for almost 30 years, Applecross took out a massive 70 million debt facility with Bank of Scotland in 2006 and quickly began to grow.

But the company's expansion coincided with the end of the housing boom and it began to struggle as the property downturn kicked in.

A spokesman for Bank of Scotland said he could not comment on specific cases, but said: "The timing of specific payments such as interest, bills or salaries individually have no bearing on the decision whether or when to appoint an administrator.

"The decision is based on the fact that the company has regrettably come to the point where it cannot continue to trade."

The bank spokesman added:

"If a decision is made to place a company into administration, this is because all other possible options have been exhausted. The last thing anybody wants to see is an insolvency."

Government support for the redundant workers will cover them for unpaid wages up to a limit of 350 for every week worked for up to eight weeks.