53_PBC to Begg (Crime OCR)_12-7-16 (33pp)

DRAFT/PFCB/12 July 2016
1
To: City of London Police and National Fraud Crime Reporting Centre Dear Sirs,
Mitre House Management Limited ("MHML")
Paul Brown-Constable, Segar Karupiah and Dima International (Jamil Raja) (“the Di- rectors") Sefton Solomon, Pemberton Professionals Limited (“the Auditor")
This report is submitted by Mr P.F.C.Begg of 9th Floor, the Metro Building, 1, Butterwick, Hammersmith, London W6 8DL, a solicitor acting for Mrs Michele Hillgarth. Mrs Hillgarth is the owner of a leasehold apartment (Flat 5) at Mitre House, Kings Road, London SW3 4TP. For the reasons set out below we have strong grounds to suspect (a) fraud, (b) theft (conver- sion) (c) breach of statutory duty and (d) false accounting on the part of MHML and its direc- tors. The essential elements of the relevant legislative provisions, and their application to the facts, are set out in the Schedule to this Report.
There are nine residential flats in total at Mitre House and there are retail premises on the ground floor. Mitre House Management Limited ("MHML") acquired the headlease of the block at Mitre House from River's Edge (Dorrington) in August 2011. Each of the three direc- tors of MHML owns a flat in the block - Paul Brown-Constable owns Flat 7, Segar Karupiah owns Flat 2 and Jamil Raja (Dima International Limited) owns Flat 6 - and each of them holds 25% of the shares of MHML. The balance of 25% is owned by Mrs Hillgarth, who was a director but was dismissed from office by the other three on 18 September 2014. The causes and consequences of this rupture are explained in the paragraphs below.
MHML was originally established in 2011 in order to acquire the head lease of Mitre House and to appoint an acceptable independent professional firm to manage the block. However no properly qualified managing agent was ever appointed and Mrs Hillgarth was persuaded, against her better judgement, that MHML would be better off managing the block itself. Since January 2012 MHML has (through Mr Paul Brown-Constable) been managing the block itself and imposing, as part of the overall service charge for the block, an MHML management charge to its own leaseholders/tenants.
(reply) Mrs Hillgarth initially agreed to the Directors managing the block, including herself as a Director (see attached ref A) and never raised any comment once it was decided that we would charge a management fee our time and costs. As a Director at the time, she too was as responsible as myself for instigating fees (due solely to her constant undermining of everything her fellow directors were attempting for the maximum economy). It is incorrect to say “against her better judgement” as indeed she agreed quite voluntarily as her email evidences. She thought it a worthwhile attempt to do and for about three or four months she was content. Then complaining commenced leading her to approach external Agents behind her fellow director’s backs which we thought to be contrary to good managerial loyalty. (see attached AA)
This referral behind our backs is not indicative of a dissatisfaction with present MHML philosophy but purely a dissatisfaction over intended expenditures as well evidenced in all correspondence presented to date. She wished to spend £60,000 with only around £35,000 in bank.
The imposition of these MHML management charges lies at the root of all the problems that have subsequently arisen, and have given rise to the allegations of fraud that are made in this Report. The specific issues will be dealt with under four headings as follows: