Lawyers call on managers at Edinburgh property group to go
The ESPC, which markets properties on behalf of more than 250 property solicitors, recently asked member firms for cash to fight the effects of a slump in house sales that has had a grave impact on its income.
In a letter to the organisation's directors, the Edinburgh Conveyancers Forum (ECF), which represents more than 50 firms, said a lack of transparency in the ESPC's finances meant its members would not consider a cash injection until the current executive disclosed the true accounting picture and stood down from their positions.
The letter, leaked to firmmagazine.com and seen by The Scotsman, states: "The ECF noted with dismay the declared financial position of the ESPC and with concern the suggested short-term cash measures. We do not believe it was fair and reasonable for the ESPC to rely on that long standing goodwill to make such a cash call with little or no information or transparency."
The correspondence, written after a meeting of the ECF on 21 May and signed by Forum chairman Ross Mackay of HBJ Gateley Wareing, indicates the majority of Forum members are prepared to offer money to the ESPC, but only after certain conditions are met. One of these is: "The replacement of the current executive management of the ESPC."
The letter also demands disclosure of company account information so an audit can be carried out, a complete rethink of the company structure and the production of "a coherent business plan including realistic financial projections".
It concludes: "The overwhelming view with no dissenting voice to the contrary was that no confidence remained in the current executive management."
Mr Mackay declined to comment further, but Ron Smith, chief executive of the ESPC, said: "The ESPC does not conduct its business via the media. We have a strong recovery plan in place.
"We believe that all efforts should be focused on supporting Edinburgh's residential property market in these tough conditions. That is our focus and we will take what measures we deem necessary to achieve it."
Robin Stimpson, the chairman of the ESPC, and its directors also declined to comment.
The organisation's latest accounts are more than two months overdue, and the company is understood to be trading at a loss, a fact the ECF letter appears to confirm.
The last set of available figures – lodged in 2007 – showed a pre-tax deficit of 1.05 million, a figure the ESPC says was due in part to technology upgrade costs.
In February, Mr Smith confirmed the ESPC had laid off around 50 staff – a third of its workforce.
A spokesman for the Glasgow Solicitors Property Centre said it faced no similar problems, despite what it said was a substantial downturn in the market.
"Every estate agent and every solicitors' property centre in Scotland will have seen a decline in income, particularly in the last 12 months," he said.
"In common with most other solicitors' property centres, GSPC took the precaution of putting money aside in the good times and that will allow us to ride out the tough times.
"We are due to publish our figures up to February 2009. We circulated them to our GSPC member firms at an AGM in March. They will show the GSPC has no debts, and has reserves in hand which make us financially stable."