Thurrock Council in England said it may be forced to raise taxes and cut down on council services for years in order to recover its finances
ADVERTISEMENTThurrock Council in Essex alleged that Liam Kavanagh, a Dubai-based businessman has misappropriated approximately £150m (€175.14m) that the council had invested in solar farm-backed bonds.
The solar farm investments came as Thurrock Council became bankrupt in 2022. The council has now taken this case to the High Court, on fraud claims against Kavanagh, as well as his company Rockfire Capital.
Kavanagh has denied these allegations, urging the court to throw out the claim.
Between 2017 and 2020, Thurrock Council invested almost £400m (€467.02m) in British solar farm-backed bonds, in a series of deals brokered by Kavanagh and Rockfire Capital. The council has also alleged that Kavanagh and his company have misrepresented electrical pricing information about these investments causing them to be overvalued.
Thurrock Council has revealed debts of more than £1bn (€1.17bn), making it one of the UK's most indebted councils.
Kavanagh has allegedly spent the funds he was entrusted with on a private jet, a 232-acre country property as well as a yacht. He also owns a diamond-encrusted Hublot watch, which is worth about $1m (€0.91m) and a Bugatti supercar, worth approximately £2.3m (€2.69m).
Thurrock Council criticised for ignoring red flags
The council has faced criticism over its lack of regulatory oversight, with it consistently ignoring the financial concerns raised by government-commissioned reports over the past few years.
These mainly focused on the amount of debt Thurrock Council had run up, as well as questions over its investment and leadership decisions, and the fact that unlimited authority was granted to finance directors to make any investments they wanted.
There were also several legal concerns raised by these reports regarding the solar farm-backed bonds investments being carried out with Kavanagh and his company specifically that were ignored.
Thurrock Council has since revealed that it may need to increase taxes and make cuts to council services in order to recover its finances.
The Labour leader of Thurrock Council, John Kent, said, as reported by Financial Times: "We have an obligation to Thurrock's residents to make sure that we leave no stone unturned and vigorously pursue all available legal avenues to recover as much money as possible to help Thurrock Council get back on a firm financial footing."
Euronews Business has tried to contact Rockfire Capital, however it has yet to respond.
