His companies made a deal for £138m of taxpayers’ money. Where has it gone? — The Bureau of Investigative Journalism (en-GB)

In May one of Kavanagh’s companies, Perpetual Power Holdings, finally published its 2020 accounts that had been due since September 2021, revealing previously undisclosed details about his businesses’ deals with Thurrock council: the defaults, the missing interest payment, and the total debt of £655m. The accounts also show that if the council does ask for that sum to be repaid early then the group will likely be unable to meet its liabilities – the sites would have to be sold for the council to get most of its money back.

While Kavanagh remains, through Anyard Holdings, the ultimate beneficial owner of the group and the solar farms, he has resigned all his directorships other than Rockfire Capital, which is in the process of being liquidated, and is no longer directly involved in the day-to-day business.

The only director in the new structure, including the companies attached to each of the 53 solar farms, was Ian Walsh, the former finance manager of Rockfire Capital. As sole director of Toucan Energy Holdings 1, he was the company officer in charge of ensuring the council is repaid when the bonds mature.

On July 1, three days after the Bureau sent him detailed questions about TEH1’s finances – including whether the company is solvent – Walsh resigned as a director of TEH1. He has yet to respond to our questions.

In a statement, a spokesperson for TEH1 said the company had “strengthened its management team and hired external advisors to assess rapidly the group’s affairs and identify the best path forward in the interests of all its stakeholders”.

‘The beautiful thing is it’s someone else’s money’

The Bureau’s investigation began in 2019 when we spotted in a government spreadsheet that Thurrock had borrowed more than £1bn from other local authorities, £450m more than the next council in the list. A bit more digging revealed an investment policy that included long-term interests totalling £815m in the renewable energy sector. We now know 80% of that total was connected to Kavanagh’s companies.

In an interview at the time, Clark described a bizarre arrangement, involving dozens if not hundreds of short-term loans, many as short as a month in length, with the effect that the council was in a perpetual state of borrowing from one local authority to repay another. Piecing together data in obscure spreadsheets revealed Thurrock had borrowed from at least 150 other councils. When contacted, some of the biggest lenders said they had not even asked what the loans were for because the arrangement meant they got their money back, with interest, after a short period of time. It was effectively a source of apparently limitless public cash to which Kavanagh’s companies were indirectly given access.

After the Bureau’s first story, some Thurrock councillors encouraged Clark to borrow and spend even more, with one declaring during a public meeting: “The beautiful thing about this plan is that it’s someone else’s money.” Another said elected members were not supposed to question decisions taken by council officers.