Eden business leader quits after satirical magazine’s accusations

Date: Friday 3rd June 2016

A HIGH-ranking Eden councillor has resigned following an article in satirical magazine Private Eye.

Tory councillor David Hymers quit as portfolio holder for the economy and stepped down as a councillor for Alston Moor on Wednesday.

His resignation after just 13 months in office follows an item in the magazine’s “Rotten Boroughs” section about the activities of councils and councillors nationwide.

The article stated that Mr. Hymers, who recently attended a Buckingham Palace garden party, put his Total Post Services plc company into liquidation in March because it owed £2.5 million including £400,000 to Her Majesty’s Revenue & Customs (HMRC). The practice is known as “phoenixing”.

The 66-year-old businessman was made MBE in 2010 for services to industry and international trade and was seen as a key member of Eden Council’s six-member ruling executive.

Mr. Hymers provided the Herald with a detailed three-page justification of his business decisions as well as offering to show e-mails between himself and the HMRC over the ongoing issue.

He described the story as “outrageous” and said he was not given an opportunity to put his side. Mr. Hymers said: “The implication is phoenixing but the truth is very different. I view it as an uncorroborated story that’s full of innuendo, inaccuracy and error. I don’t know where they got the information from, but I would love to find out.”

A spokesman for Private Eye said the publication was standing by its story.

Mr. Hymers added: “I agree we went into voluntary liquidation which has a certain caveat attached to it in law. I also know HMRC was kept involved at every step along the way.

“I know that the £400,000 is a very emotive figure, but that figure hasn’t actually been verified yet and is higher than our own records show.”

Mr. Hymers said he had already paid more than £120,000 off the total and more was to follow.

He said: “I also know that in the last 14 years of the existence of Total Post Services plc we have input more than £5 million into the Exchequer. There has been no wages lost, no jobs lost, no forced redundancies or voluntary redundancies because of this. There’s been no law broken and no company law broken and as far as the morals of it are concerned, while some people say there’s no morals in business I actually don’t agree with that there’s a lot of morals in business.”

He said he had considered legal action but had been advised that people with “deeper pockets” had tried to challenge the magazine in the courts and failed.

The story concerned a decision to separate his international company into three separate parts motivated in part, he said, by his plan to “step back” from the firm after several years at the helm.

“I’m not saying it was right to end up the way it did, but it’s not only within the law but the law changed in the last few years to permit entrepreneurs to come through a business failure, although I don’t call this a failure. I call this a planned situation spelled out to everybody which everyone agreed with, including HMRC.”

Asked why he was resigning if he had done nothing wrong, Mr. Hymers said: “My feeling is that many people who are councillors at Eden don’t actually understand the business behind this. The officers understand and I have had a clean bill of health from everyone, including senior officers like David Rawsthorn, the finance director, senior lawyer Paul Foote and chief executive Robin Hooper.

“People don’t understand the whole thing and when they don’t they lash out. I didn’t want any taint by association. I believe I have done the honorable thing by resigning.”

Mr. Hymers added: “I know I haven’t done anything illegal and I’ve had that checked by my own lawyers to make sure during and after the event. I know there are some people who do phoenix operations where the company is down today and up tomorrow either by accident or by design, but this clearly isn’t that. At the time it was a measured, carefully planned, correctly disclosed decision involving our accountants, our lawyers and HMRC.

“The plan was for me to take a lighter load within the business because the business itself had grown into a complicated affair. The plan was to break it down into bitesize chunks.

“The changes were made by me taking advice following my ill health in November last year.

“My wife has said slow down a little bit on this particular activity, which would have left more time for the council work which I have actually really enjoyed.”

He says the voluntary liquidation came about because of a delay in the sale of a company. “If a company is in true financial difficulty you will find a trail of county court judgements and bad press about the directors, but none of that sticks to me at all because it didn’t happen,” he said.

Mr. Hymers explained that he made a full disclosure to council leader Kevin Beaty and had met with Mr. Hooper to discuss the matter.

Mr. Hymers said: “I don’t like it when someone hangs on by their fingernails and taints everything it’s not my style. I haven’t done anything wrong in my view or the view of several people. I’ve been given an opportunity through the portfolio to look at business around Eden and look at growing our economy, and there have already been some excellent wins.”

Mr. Hymer said he had made full disclosure to Cumbria branch of the Institute of Directors and to the North West’s UK trade and investment group, both of which were satisfied with his explanation.

Her Majesty’s Revenue & Customs declined to comment on the issue due to taxpayer confidentiality.

Council leader Mr. Beaty said those who served in public office were on a “pedestal” and “it’s as simple as that”.

“David has had some problems with adverse publicity about him and his business and he’s offered to tender his resignation which I initially refused but I have now respectfully accepted. It’s a huge loss because he’s done some incredible work for us and was just getting going on some big projects for the council.”

A by-election will now be required for the Alston Moor ward where in May, 2015, Mr. Hymers was elected as the second representative for the area after edging out an Independent candidate by 41 votes.