Chamber sees liquidation as its only debt solution
Mar 5 2008 by Sion Barry, Western Mail
DEBT-RIDDEN Cardiff Chamber of Commerce could be wound up next month after its board confirmed it has submitted a court petition seeking its liquidation.
The move is the latest development since the board informed its 1,400 members that it has no alternative but to cease trading because of its £2m debts, back in January.
Now, having taken professional and legal advice, the chamber’s board, in the form of a letter from president Paul Gardner to members, says it has considered alternative options – including putting the chamber into administration – but that liquidation was the only way forward.
In his emailed letter the president states, “The board has taken time to carefully and seriously consider all the alternative courses of action including proposals submitted on behalf of creditors.
“The board has taken specific advice on the ‘achievability’ of such proposals in the current circumstances. The board is advised categorically that administration is not an option available to the chamber.
“The board was advised that it should take immediate steps to place the company into liquidation and, as a result, I can confirm that the board has presented to the court a petition seeking an order for winding up of the company. We are advised that the petition will be heard on April 16.”
The board said it didn’t require, as first indicated back in January, approval from chamber members to activate legal winding up proceedings.
The chamber’s debt includes £1m owed to the Welsh Assembly Government as a result of overpayments received from former quango Elwa for a training contract.
However, the chamber has built up significant other debts. The board would not confirm how many of its members are creditors.
However, one of its main membership creditors is Ystrad Mynach-based finance company Quest4Finance, which is owed more than £200,000.
Through its chief executive Paul Breen it has been seeking to secure agreement among all creditors, including the Welsh Assembly Government, for the chamber to continue to trade.
The chamber has hoped the Assembly could wipe clean the £1m debt, but it was informed, before Christmas, that under European Union law such a move would have been illegal.
If the chamber is liquidated it is unlikely that any of the its creditors will receive anything of significance back from a liquidator – even when taking into account the collection of all outstanding monies it is owned.
Under the auspices of the British Chamber of Commerce, a steering committee has been set up to look at the potential of creating a new super chamber for South Wales.
That would involve the merging of Cardiff Chamber of Commerce, West Wales Chamber of Commerce and Newport-based Ngb2b into a new company.
However, such a move would require membership approval from the three organisations.
The British Chamber of Commerce is the umbrella body for chamber bodies in the UK.
Its deputy president, Neville Reyner, has been charged with chairing a working group made up of representatives from the three chambers, to examine the feasibility of establishing a Chamber of Commerce for South Wales.
Both West Wales Chamber of Commerce and Ngb2b have agreed to provide services to chamber members in Cardiff.
On the prospects of a new chamber for the whole of South Wales, Mr Gardner says in his letter, “The new order provides an important opportunity for the South Wales business community to establish an entirely new and substantial chamber which will not only help enhance the chamber brand, but also lead to the offer of high quality business support activities and services. I very much hope that you will want to be part of that new chamber and that you will encourage your business contacts to join as soon as we have the opportunity to do so.”
Attached to Mr Gardner’s update to members is a letter for the director general of the British Chamber of Commerce, David Frost.
On the proposed new chamber he says, “This will not be an easy task, there will be those who will question the need for change. However, I believe that the prize is too great not to work towards a South Wales Chamber of Commerce. The BBC is leading this work and putting resources behind it.”