Whitby Regatta – limited or not?

REGATTA DE BLANC (CHEQUE?)

IN THE PUBLIC INTEREST

• – an “In My View” article by NIGEL WARD

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Since publishing an article on 29^th June 2012, I have been asked to explain exactly why it is that I am so concerned about the future safety and well-being of the Whitby Regatta. I am delighted that, as a result of my concerns, based solely on the involvement of Councillor Jane KENYON, the Town (Parish) Council has launched an investigation.

According to allegations in the national media (which the Gazette declines to publish) and elsewhere, Councillor Jane KENYON:

a)  is a Director of Belvedere Computers Inc., bankrupt and suspended for “non payment of substantial debts” in the United States.

b) has been found by the North Yorkshire Police Authority to have committed a criminal offence in her capacity as President of Whitby Regatta and Director of Whitby Regatta Limited in not declaring her interest in Whitby Regatta Limited in her Register of Interests -though no further action was deemed necessary.

c) apparently concealed her Directorships of Whitby Regatta Limited from her Registers of Interests at other Authorities.

d) committed another criminal offence in respect of not declaring her Secretaryship and Chief Financial Officership of Belvedere Computers Inc in her Register of Interests at any Authority.

e) concealed the fact that she is Secretary and Chief Financial Officer of a bankrupt company (Belvedere Computers Inc), suspended with outstanding debts.

f) concealed the fact that she is Secretary and Chief Financial Officer of a company (Belvedere Computers Inc) that has had Superior Court Judgment against it in the  in San Mateo County, California, USA – which remains outstanding and unsettled.

g)  concealed the fact that her life-partner Councillor Thomas William (‘Bill’) Miller has a County Court Judgment outstanding against him in California.

h) given evidence to the Standards Committee of the North Yorkshire Police Authority investigation into her non-declaration of Whitby Regatta Limited, that “…last year, a decision was taken to change the status of this organization to that of a Charitable Company Limited by Guarantee” – though, in fact, both organisations continue side by side and it now transpires that there has been no application for charitable status and it is presently constituted as a commercial venture.

i) claimed that Whitby Regatta Limited had the same objectives as the former charitable organisation (although, as recorded above, they are not the same) and allows for the payment of salaries, which is completely contrary to the objectives of the Whitby Regatta.  This would appear to be compelling evidence that Councillor Kenyon misled the Standards Committee during its investigation into her non-declaration of her interest in Whitby Regatta Limited.

j) has attracted adverse press criticism in the national and local media which is damaging to her personal reputation and, by unfortunate association, to that of the Regatta.

According to the Whitby Gazette and/or the Scarborough News, Councillor Kenyon has issued a blanket denial of any wrongdoing concerning the allegations in the Private Eye article. However, the Private Eye article makes no mention of Whitby Regatta, a fact omitted by the local newspaper reports.

The points that the Gazette stresses are:

• “Scarborough Borough Council’s Head of Legal and Support Services, Lisa Dixon, said: “The council’s standards board considered a complaint concerning Coun Kenyon’s register of interests relating to Whitby Regatta Limited.”

• “The board determined that no action should be taken in respect of this complaint.”

• “At the request of the complainant, a review of this decision was subsequently undertaken by the standards review sub-committee.”

• “The sub-committee concurred with the original decision of the standards board.”

And North Yorkshire County Council also issued a statement to the press following the allegations:

• ‘The County Council’s Standards Committee conducted a thorough review of the circumstances surrounding Coun Kenyon’s entries on the register of members’ interests.

• “The committee, which included independent non-elected members, found that there had been no failure to comply with the Member Code of Conduct.”

• Due to legal reasons, Coun Kenyon could not comment on the allegations.

The facts are that, contrary to the remarks made in the Gazette, Councillor Kenyon did not declare her interest in the new company Whitby Regatta Limited in her Register of Interests for over a year; she has continued to hold it out as a charity when in fact it is a Limited Company.  If you doubt my word, click on the links below and satisfy yourself as to the truth:

http://democracy.scarborough.gov.uk/mgDeclarationSubmission.aspx?UID=128&HID=3465&FID=0&HPID=1049242

http://www.northyorks.gov.uk/CHttpHandler.ashx?id=6013&p=0

Following a complaint against Councillor KENYON on grounds of her concealing her interest in Whitby Regatta Limited to Scarborough Borough Council, the SBC Standards Committee  produced the following Decision Notice:

• The committee looked at Cllr Kenyon’s register of interests and noted that she had in fact registered that she was a director and president of Whitby Regatta but that this had been placed in the box for charities when at that time it was not a charity. However the committee noted that Cllr Kenyon had stated that the application for charitable status was pending. Technically there may have been a very minor breach but this did not warrant any further action.

Councillor KENYON was declaring that the Regatta still existed as a charity, knowing full well that it had actually been transformed into a commercial Limited Company which is now trading under the logo and name of the Whitby Regatta. The press release by Whitby Regatta Limited to the Whitby Gazette, (authorship unattributed, though presumably issued with Councillor KENYON’s approval) does not mention charitable status at all – and a search with the Charities Commission has revealed that there is no charity called Whitby Regatta.  It appears that, contrary to the assurances of the Standards Committee and Councillor KENYON herself, there is no intention to run the new Company as a charity; certainly, none has been recorded.

In fact, most of the Private Eye and Real Whitby allegations have not yet been considered by either SBC or NYCC, though both the North Yorkshire Police Authority and Scarborough Borough Council have already upheld the non-declaration complaints and decided, inexplicably, not to take any action in respect of a criminal offence having been committed. Why?

And where does that leave Whitby Regatta?

Some have suggested that the event is in safer hands now than ever before; some have suggested that it is in the same hands as before; others have suggested that it has been hi-jacked and that the former members of the Regatta Committee have been gulled into a situation the full significance of which they have yet to grasp.

Some have asked if the former members of the Regatta Committee would have been quite so compliant (others prefer ‘gullible’) had they been aware, a year ago when the Limited Company was formed, of the recent disclosures of Public Record evidence of Cllr Jane Kenyon’s appalling financial record over the past thirty years, in private enterprise businesses as well as in her elected and appointed rôles in public life.

Still others have suggested various seemingly-outlandish conspiracy-theories;  notably, that the formation of Whitby Regatta Limited (WRL) is the fore-runner to a total commercial privatisation of Whitby Harbour when the (Pilot) Whitby Harbour Board evaluation period comes to an end. Certainly, the long list of activities mandated in Article 4.3(2) of WRL’s Articles of Association appear ideally suited to that purpose:

• 4.3(2) To carry on all or any of the businesses of promoters organisers conductors of races competitions sporting and other entertainments and enterprises of every description (whether or not connected to yachting) proprietors and operators of marinas moorings slipways causeways landing stages boat house foreshore rights and wet and dry docks and repair yards operators and proprietors of caravan and camping sites operators of markets auctions and sales lock-up garages motorcycle trailer and car parks and all accommodation and conveniences required in connection therewith cafe restaurant and hotel and motel proprietors refreshment caterers and contractors and things of all kinds necessary or useful for carrying on the foregoing businesses or any of them or likely to be required by customers of or persons having dealings with the Company.

No mention of running Whitby Regatta – those words do not even appear anywhere in the document – and Whitby Regatta has achieved world-renown without ever branching out into such a wide panoply of commercialism. Of course, my knowledge of Regatta does not go back far at all – but I certainly do not recall it ever including many (if any) of that astonishing array of commercial enterprises listed above.

I would concede, however, that I would most definitely include the likes of “marinas”, “wet and dry docks”, “trailer and car parks”, “accommodation and conveniences”, “café”, “restaurant”, “hotels” etc, if I were planning to exploit Whitby Harbour as a private-enterprise harbour/marina and/or operating a commercial entertainments company anywhere in the country.

So, in my view, we are a long way from getting to the bottom of all this.

Apparently, WTC Councillors Niall Carson and Noreen Wilson have questioned whether the destiny of Whitby Regatta is the proper concern of Whitby Town (Parish) Council. With what, exactly, might the Council concern itself if not the town’s main event? Ruswarp toilets?

In my view, if the Council had resolved to wash its hands of this matter it would have been an abdication of its duty. Fortunately, the majority of members present at the recent meeting (barring only Councillor Terry Jennison – who abstained) shared my views.

According to the Whitby Gazette article entitled “Town council seeks answers from Regatta”, the  Council has prepared a list of questions to put to Whitby Regatta Ltd (WRL).

We are told that these questions will include –

• Why is Whitby Regatta a company and not a charity?
• Who made the decision?
• What consultation took place with the former regatta committee?
• What involvement it will have with future regattas?
• Were the rowing club and other groups associated with event consulted?

The statement of response provided by Whitby Regatta Limited (WRL), which the Gazette describes (though its author remains anonymous) as “a full and frank response” is reproduced below – though in my view, it is neither “full” nor “frank” – and I will present the paragraphs individually to provide an accessible framework within which each claim may be addressed in a coherent manner:

• “In 2011, following advice taken from a local solicitor and Company[sic] House, a committee decision was made to apply for the Whitby Regatta to become a ‘Company Limited by Guarantee.’ Companies limited by guarantee are widely used for charities, community projects, clubs, societies and other similar bodies. Most guarantee companies, as is the Whitby Regatta, are not-for-profit companies. In other words the Whitby Regatta does not distribute profits to members but retains them for maintaining the event in forthcoming years.”

Companies House is prohibited from giving advice, the ‘local solicitor’ is not named and, in fact, the advice most generally offered to organisers of charitable events, especially the well-established, is to do one of two things; either (a) establish a Registered Charity, or (b) establish a Community Interest Company.

The former is a more complex process, and unless the objectives are primarily charitable (ie: providing charitable grants per se is the main object of the exercise), then the latter – a Community Interest Company – is more straightforward, easier, and considerably less burdensome to establish.

Several local enterprises are established in exactly this way – the Bram Stoker International Film Festival and the Whitby Beacon Town Forum are examples that spring readily to mind. They do not exist primarily to give to charity, but they are so structured as to be genuinely not-for-profit and any profits that may arise are legally committed to local charitable causes. Importantly, the organisers are fully protected.

The final sentence of the above cited paragraph (“In other words the Whitby Regatta does not distribute profits to members but retains them for maintaining the event in forthcoming years.”) is not, in fact, reflected in the Articles of Association of Whitby Regatta Limited (WRL), which state, in Article 6.2, that there are six different ways (a – f) in which money may be freely disbursed amongst Members, Directors and even Alternate Directors.

Moving on:

• “The main reason for the Whitby Regatta becoming a company limited by guarantee is to protect the people running it from personal liability for the company’s debts. Indeed funding bodies, such as local authorities, often insist on an organisation being registered as a company limited by guarantee. If a community project, club, etc. is not registered as a limited company, then the people running it can be made personally liable for its unpaid debts. To those volunteers who continue to serve the Whitby Regatta, this can be a real risk.”

In fact, what all Local Authorities always insist on is that the event is adequately covered by Public Liability Insurance (usually in the sum of £5M) and in accordance with the terms of the Licensing Act 2003. If you have never had any reason to become acquainted with the matter of Public Liability Insurance, you can get a quick overview here – in particular:

“Law generally states that businesses or individuals pay for losses caused by the business or its employees. Without Public Liability Insurance cover then the full cost of a loss – a civil wrong to which the court provides a remedy – will have to be paid by the business or you if a self employed sole trader.”

In fact, this new arrangement may actually increase the risk of liability to the Committee members, who could well find that, though arguably protected in their postions as directors of a Company Limited by Guarantee (they may still be made personally liable by a Court in cases of death or injury), they do remain open to action personally in their rôles within the Whitby Regatta committee, which, for legal purposes, remains addressable as a separate and distinct legal entity.

The remarks regarding risk of debt are somewhat disrespectful to the long line of people who have voluntarily (and successfully) run the Regatta for 170 years (before Councillor Kenyon took a directorial  rôle) without running it into debt – which is more than can be said for the Directors of Belvedere Computers Incorporated (BCI) or Dales Timber Limited (DTL) and a whole bunch of other undeclared ‘enterprises’ in between.

What the above statement actually conveys to me is that the Directors of Whitby Regatta Limited (WRL) can run up a mountain of debt during the course of which they can draw money in half a dozen different ways, and then walk off unscathed – a là BCI and DTL, and all the rest. In the case of DTL, there are some alarming similarities; a Limited Company existed at the same location as an unincorporated business with the same name, which Councillor KENYON did not declare in her register of interests.  Eventually the Limited Company went bankrupt for £229K, taking all of the debts with it. Now, I am not saying that this is the plan. And I am not saying that it is not. But where would it leave the Regatta?

• “As the Whitby Regatta is limited by guarantee, there are no shareholders however, to meet the requirements of the Companies Act 2006, we must have at least one director. In this case we have several, all of whom have lodged their address with Company House and all of whom have given the agreed service address as that registered. Every director is required to provide both their usual residential address to Company House and, for each directorship, a service address. The service address will be on the public record; the residential address will be protected information. A director may choose to use his residential address as his service address; if this is the case the service address will still appear on the public record, but the fact that the two addresses are the same will be protected information.”

“All of whom have lodged their address”, eh? The Public Record is replete with entries giving Cllr KENYON’s address as Linglands Farm, Cloughton, near Scarborough; that is her personal address. Nowhere else have I found her – or any of the other six Directors of WRL – listed at 5, Bobbies Bank, Whitby, except in their new-found rôles in WRL. It is an accountant’s holding address. No use going there looking for the silverware!

• “As advised by Company House, directors may be given some other title, such as committee, management committee, board of managers, trustees, governors, etc. In addition they may, of course, set up sub-committees, etc. and delegate powers to them, and may give particular directors special responsibilities, such as treasurer, secretary, etc. Moreover, a not for profit company limited by guarantee can be exempted from having the word ‘Limited’ (or ‘Ltd’) at the end of its name.”

This seems to suggest the Whitby Regatta (WR) and WRL – at least in the eyes of the author(s) of this statement to the Whitby Gazette – are one and the same legal entity; the one that has existed for 172 years. This is not the case. One important distinction is the difference in legal status between these two separate entities in respect of the practice of soliciting for donations.

Normally, a Limited Company is not permitted to solicit charitable donations without a special dispensation called a Solicitation Statement.

Does WRL have a Solicitation Statement? Has it applied for one? I can find nothing on the Public Record. Again this increases the liabilities of the Committee members who could now stand accused of soliciting for charitable donations for a Limited Company illegally. How could the unnamed ‘local solicitor’ or Councillor Kenyon have allowed them to be placed in this precarious position?Many people have commented, on FaceBook and elsewhere, to the effect that they are unhappy about contributing donations to another of Cllr Kenyon’s undeclared Limited Companies. Me too!

And that exemption certificate in respect of the matter of using/displaying the word ‘Limited’ (or ‘Ltd’) – has it been granted? Or even an application made? Where? When? Who now owns the Whitby Regatta ‘brand’ – the logo, the lettering in the customary typeface, the world-renowned name , identity and place in the public consciousness?

The ‘Whitby Regatta brand’ is a very valuable asset. I am told that (for example) the Whitby Folk Week ‘brand’ changed hands not so very long ago for £150K. I would estimate that the Regatta ‘brand’ is worth considerably more – given its provenance and renown. The question remains: Who does the ‘brand’ now belong to? Has it changed hands? For what price? Why on earth has the deep ambiguity on this point been entirely omitted from the WRL statement?

• “As a not-for-profit organisation, all donations, collections and sponsorships given by members of the public and businesses are directed to the running of the Whitby Regatta. Any surplus monies are suitably invested to ensure the continuance of the Whitby Regatta in its present format. Without such prudence, having made a substantial financial loss in 2010 and 2011, the event may well have had to be curtailed in some way this year. As specified in its margins, should the Whitby Regatta fold, any surplus, after satisfying all debts, will be held in trust for a period of 2 years. Should no organisation take over the administration after that time, the surplus will be distributed between the local rowing clubs.”

Firstly, let us be clear; nowhere in the Articles of Association do the words “not for profit” appear.

Without the fortuitous establishment of WRL – we are asked to believe – the “substantial financial losses” of 2010 and 2011 “may have” had a limiting effect on this year’s event (2012). But, wait one moment, please: WRL was already in existence and at the helm before for the 2011 Regatta!

But WRL is an uncapitalised Limited Company, without shareholders. So who covered the “substantial losses” of Regatta 2011, when Whitby Regatta Limited had already assumed control?

Can anyone tell me if it was the Whitby Regatta, who stood WRL’s losses? With what resources? Further, because WRL is a Limited Company, its accounts and records are not open to public audit, it has not filed any accounts and neither the Town Council nor the people of Whitby have any right of access to this information.

It is a relief to hear that, “should the Whitby Regatta fold”, “any surplus” will “pass to the two Rowing Clubs”, albeit two years down the road.

What surplus? The statement speaks of losses.

And if there really were a surplus, why might WRL wish to fold? Would it not disburse that “surplus” to charitable beneficiaries? Or would such “surplus” qualify as profit and be subject to taxation?

• “Turning to the particular role of Secretary, changes in April 2008 to the Companies Act 2006, now mean that UK limited companies no longer require a company secretary and allow a company to operate with a single director. In addition, since 1 October 2009, secretaries who are an individual person will be able to file a service address for the public record if necessary; hence our use of the P.O Box address quoted on the Whitby Regatta website.”

Aside from the appalling grammar, can anyone explain how the remarks preceding the word “hence” relate to the explanation that follows it? Does the secretary (who may not be required at all), or the single director (but WRL has seven Directors), have some problem about declaring his (or her) actual address? Why?

Why does the Whitby Regatta web-site offer no information about its ‘change of status’? Why do the web-site’s down-loadable documents make no mention of the Limited Company status nor the Registered Number? Why do the words ‘Whitby Regatta Ltd’ or the Registered Number not appear on the web-site?

Should WRL be registered for VAT? Is it? Why does no VAT number appear on the web-site or invoices? Why does the full-page advertisement for the Regatta in the August edition of the Whitby Advertiser (see below) make no mention of Limited status, Registered Number, VAT Number, Solicitations Statement, etc?

• “The decision to become a Company Limited by Guarantee was taken in consultation with other members of the Whitby Regatta Committee including the Rowing Clubs. It was taken with the aim of protecting those volunteers serving the local community and not to benefit them. If it is considered that the Articles of Association require re-visiting, the Whitby Regatta will do so in conclusion with our solicitor, Companies House and the rowing clubs.”

I can tell you (and will testify on oath, given the opportunity) that the people very close to the Regatta to whom I have spoken recently were completely unaware of any “consultation”. One Regatta stalwart asked me, “Who now owns the silverware – the trophies? They’ve been around forever! They’re worth a fortune!”

This is not by any means a trivial consideration. If WRL goes broke, one would not welcome the prospect of the silverware falling under the auctioneer’s hammer at the demand of the Receiver – their true worth to the Regatta and the town defies such a simplistic balance-sheet evaluation.

In fact, I have been told repeatedly that all that some of the most prominent members of the Rowing Clubs knew about it was that “there was some kind of meeting, out of the blue – not many turned up”. What is absolutely certain is that many of the Regatta’s long-serving volunteers have never been properly informed – the first they knew was through the article in Real Whitby!

Certainly, the wider Whitby public seems to have had no inkling that any status-transition had taken place. So why the big secret?

Whitby Gazette editor Jon Stokoe closes his editorial column in last Friday’s edition thus:

“So we’d urge the town, even those who think there is something slightly more sinister going on, to channel their efforts into volunteering to help the regatta organisers make the event happen”.

No worries, eh, Jon? According to WRL’s own (unattributed) statement, after 170 years, the Regatta is now (a) building up losses, (b) illegally soliciting donations, and (c) has been covertly transformed into a commercial organisation under cover of being a charity – which it most definitely is not.

It’s principle asset – its ‘brand’ – worth hundreds of thousands of pounds, has been co-opted, and the Committee members remain susceptible to liability for any debts.

In summary, I do believe that the Whitby Town (Parish) Council investigation is fully justified – though the questions that Councillors elected to pose could have been a great deal more penetrating. Unfortunately, the Council has no power to demand answers.

I have no doubt that the 2012 Whitby Regatta will take place in its usual scintillating style – and long, long, long may it do so!

So let us hope that whatever the future does hold will bring the Regatta no harm or ill-repute.

In my view, the present arrangements are about as safe as a midnight cruise off the Somalian coast.