Uncertainty surrounding criminal and HSE investigations following the death of a worker, combined with a “substantial loss” in its 2018 accounts pushed Ikon Construction into administration, it has emerged.
Ikon entered administration on 17 May this year, shortly after 22-year-old Luke Allen, who worked for a subcontractor, died after falling through the roof of a building in Bristol on an Ikon project in March.
A report by the firm’s administrator, FRP Advisory, said Ikon’s directors blamed the firm’s collapse on the uncertainty created by criminal and HSE investigations into Allen’s death.
The “adverse publicity” from the investigations meant that the company was unable to secure the required performance bonds for around £25m worth of ongoing contract work it had won or commenced for several different clients.
Without those performance bonds, it wasn’t able to progress the contracts.
Meanwhile, the company made a loss of £1.5m in its full-year accounts for the 2018 financial year, which were attributed to losses on a number of poorly priced residential jobs, losses on a large commercial contract, and “mismanagement of some contracts by senior project staff”.
As a result, the directors saw no alternative but to cease trading, which resulted in 50 redundancies.
Among the issues the administrator is now investigating are claims that Ikon made payments to some creditors but not others, thereby creating a preference.
It is also looking into allegations that the directors have a portfolio of luxury cars that have been paid for with company funds.
FRP said that at appointment the company owned three commercial vans of low value and that the remainder of its fleet was subject to finance agreements and contract hire agreements.
“We are aware that the directors hold personally some luxury cars and we have requested details of proof of ownership. While some documents have been provided in respect of these vehicles by the directors that would suggest that they are owned by them personally at the time of this report, we have yet to have conclusive proof and evidence this is the case,” FRP’s report said.
The report added that unsecured creditors of Ikon are expected to receive around 18p in the pound, which will be paid by the firm’s liquidator in due course.