Countrywide has declined to comment on circumstances surrounding today’s Royal Institution of Chartered Surveyors disciplinary meeting about diverted funds.
One of RICS’ charges says that £10,093,866 of unidentified client funds in Countrywide’s lettings division - which had remained unclaimed for six years or more - had been diverted from the agency’s client account to its office account. This involved an alleged failure by Countrywide to safeguard its clients’ funds.
An additional charge says the firm’s conduct represented a serious and prolonged disregard to professional obligations set out in RICS’ client money guidance document.
The charges raised relatively little comment on Twitter but some individuals suggested that - if the allegations turn out to be true - the money was effectively, even if inadvertently, used to prop up the company when the funds were diverted between 2008 and 2018. As a result there may be implications for the company’s reporting to shareholders.
The disciplinary meeting takes place today at 10am in Birmingham.
It is typically the case that deposits held for such a period, which cannot be identified and are not claimed, are eligible for donation to charity.
RICS guidance on the issue says: “If, after six years, the client or owner of the money has not been found and no true claimants to the money have come forward, it may be donated to a registered charity.
“A receipt must be obtained for this transaction so should a true claimant come forward to collect the money it can be made available to them. Preferably the receiving charity should offer the donating firm an indemnity to enable the firm to recover a donation in the event of a claim.”
Estate Agent Today has asked Countrywide to comment on the charges, and the suggestions on Twitter; the company has not responded to our request.
You can see the charges in full here.
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Liquidity of the company or not is certainly a factor for shareholders, though at less than 4p a share for some time I do not think many people have been buying CW shares. The equally disturbing factor is the lack of governance - and what have the financial officers of the company been doing - or not doing?
With a multi-million pound rescue cash injection last year, a great chunk of which has been eaten through with monthly running costs of this great lumbering beast, when the 10M is subtracted from any 'cash' at the bank - will Countrywide have to 'sell the silver' to raise capital to continue trading?
For me it is a race against time, sell off assets and cut offices, or wait and the costs of running the business will eat you and the assets and some offices will be sold or rebranded. Though I am not sure who apart from the incumbent staff in the form of a MBO, would want to buy the company as it clearly will not be making profit anytime soon.
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