The Treasury is to investigate how Angus car dealership Mackie Motors was cut off by its supplier, a move that forced owner Kevin Mackie to sell the business.
Mr Mackie previously said the family-run firm was cut off from new cars and finance by RCI, the finance company for manufacturer partners Renault and Nissan.
He claims that decision forced him to sell the business, established by his parents Ron and Janie in 1977, to Park’s of Hamilton in February 2022.
Mackie Motors operated Renault and MG dealerships in Brechin and sold new Nissan vehicles in Arbroath.
Mr Mackie previously revealed the business was cut off from a two-year contract with just seven days notice.
The case was subject to a lengthy legal battle which reached the High Court which threw out Mr Mackie’s attempts to claim damages from RCI for the ending of the agreement. He also lost a further appeal.
But he is continuing to fight – and the issue has now been raised in the House of Commons.
Mackie Motors case raised in House of Commons
Mr Mackie – who is also chairman of Brechin City Football Club – was pleased to see his case raised by Angus MP Dave Doogan.
He said: “It’s a big step for me. We had a rolling two-year agreement with the manufacturer and we’d invested millions of pounds into the business.
“To then be told it was quite legal for us to be terminated on seven days notice from the manufacturers’ finance house with no reason required, it is not something that makes any sense.
“We had the business for 45 years and it was closed down overnight.”
He claims his family has lost millions of pounds after being forced to sell the business.
Mackie Motors raised in parliament
In the House of Commons debate, Mr Doogan said: “UK capital requirements regulations mandate a 50% level of capitalisation to be held by lenders for longer terms as opposed to 20% for shorter terms.
“Car manufacturers such as Renault’s RCI, underpin every franchise car dealer across these islands and operate on a seven-day notice period to terminate in order to minimise their capital requirements at 20%.
“The problem arises when a bank like RCI, maladministers a serious activity report, panics over their obligations under the regulations and terminate terminates and award-winning Renault, Nissan-Dacia dealer like Mackie Motors with seven days’ notice.”
Mr Doogan then asked chancellor Jeremy Hunt or one of his ministers to meet with him to discuss the issue.
Finance firm was ‘judge and jury’, says Kevin Mackie
In response, Bim Afolami, economic secretary, agreed to a meeting with Mr Doogan.
Mr Mackie added: “It is a shambles and is now being highlighted by the highest level of government.
“RCI can bring dealers to their knees at seven days’ notice and have knowingly destroyed my business.”
Mr Mackie also claims RCI sold all of Mackie’s part-funded used vehicle stock to clear their loan value.
He said the Financial Conduct Authority (FCA) is also investigating this.
Mr Mackie added he is meeting with the FCA in January.
The FCA declined to comment on whether an investigation is ongoing.
RCI Financial Services response
RCI Financial Services said it was aware of the recent question raised in parliament but said it had “no comment to make at this stage”.
A statement added: “We were very pleased with the Court of Appeal’s judgement which concluded that we acted lawfully regarding our contract with Mackie Motors, robustly dismissing the dealer’s appeal of the earlier High Court decision and the earlier court decision on this matter, both of which supported the actions of RCI Financial Services regarding this case.”
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