The financial losses incurred by doomed furniture firm Havelock International were unsustainable and had no prospect of improvement, its owner has claimed.
Speaking for the first time since the Kirkcaldy company collapsed with the loss of 247 jobs last week, investment firm Rcapital insisted it had tried and failed to secure funding to rescue the business.
As trades unions and politicians called for an inquiry into the firm’s demise, a spokesman defended the actions of both Havelock’s board and Rcapital, which bought the company last year.
He claimed they had maintained the highest standards of corporate governance throughout the process.
And the spokesman said speculation that the directors at Havelock had paid themselves bonuses during 2018 was “entirely untrue”, as was any suggestion that the administration process been planned by the board or Rcapital for some time before it occurred.”
The spokesman said Rcapital had worked closely with Havelock’s management to try to secure a long-term future for the company since buying it in 2018, and had injected significant funds.
“Unfortunately, it recently became clear to us that the medium-term outlook for customer contracts has weakened further, driven by problems in the retail sector and lack of business confidence generally,” he said.
“The board’s most recent forecasts demonstrated that Havelock’s ongoing losses were unsustainable and required significant additional funding, and we could see no prospect of improvement.
“Rcapital was at this point unable to provide further funding beyond the significant funds it had already invested and subsequently lost.”
GMB Scotland said Rcapital appeared to have collapsed the company in the most damaging way possible, while Kirkcaldy Labour MP Lesley Laird has called for a complete breakdown of events which led to Havelock entering administration.
Workers reacted with fury last Thursday after the jobs blow was leaked in a press statement before they were told officially.
GMB Scotland organiser Allison Cairns said: “Havelock benefited from £30 million at the expense of the public purse when loans to the previous owners were written off last year.
“In return, the new owners of the business appear to have collapsed the company in the most damaging way possible for the workforce.”
She added: “Havelock management, the owners Rcapital and the administration PWC all have questions to answer over Havelock’s collapse.”
Mrs Laird said she was alarmed by the speed with which events had unfolded at Havelock.
“I intend to get to the bottom of what happened – or didn’t happen – in the months beforehand,” she said.
“Workers are rightly furious that they’ve not been paid outstanding wages and I’m pressing for Rcapital and the Scottish Government to make urgent efforts to right that wrong.”
