What went wrong with Direct Golf

[Fish]

Hopefully fat Mike will look after staff. If SD is anything to go by then they should expect zero hours contracts, strip searches and crap options when customers try and return their goods.

Not sure what the "crap options" are that you refer to, we have laws that are in place to safe guard consumers and to be fair, also the retailer as both parties can be as deceitful as each other.

 

[ManinBlack]

And as I stated earlier, all these accounting irregularities look like they've been going on for years well before any MA involvement, but everyone likes to have a pop at MA.

There's only 1 main person responsible both directly & indirectly and that's Andrews, he's signed off all the annual accounts which at face value now all like they were doctored and massaged to carry on trading and lure an investor in looking for captital, but to choose MA thinking he wouldn't find out is neive of the highest order!

If you think Direct Golf fooled Mike Ashley you're mistaken. Before he invested he sent in accountants who told him that the business was on its last legs. He put his money in, knowing fine well that the business was going to fail, but knew he would be able to buy the remains for a song when it did fail. The £3.5m, or whatever he invested, was part of the cost of acquiring the whole business and was money well spent. The accounting irregularities are likely to revolve around the valuation of stock, with the revised loss for the last year of trading resulting from a more realistic assessment of the value of old & superseded equipment.

 

[Foxholer]

If you think Direct Golf fooled Mike Ashley you're mistaken. Before he invested he sent in accountants who told him that the business was on its last legs. He put his money in, knowing fine well that the business was going to fail, but knew he would be able to buy the remains for a song when it did fail. The £3.5m, or whatever he invested, was part of the cost of acquiring the whole business and was money well spent. The accounting irregularities are likely to revolve around the valuation of stock, with the revised loss for the last year of trading resulting from a more realistic assessment of the value of old & superseded equipment.

While I'm inclined to agree with most of this post, the bold bit strikes me as completely wrong! That 3.5m has been lost by MA - he is now simply a creditor of the oldco with no special priority over other creditors just because he now owns the newco.

 

[Fish]

If you think Direct Golf fooled Mike Ashley you're mistaken. Before he invested he sent in accountants who told him that the business was on its last legs. He put his money in, knowing fine well that the business was going to fail, but knew he would be able to buy the remains for a song when it did fail. The £3.5m, or whatever he invested, was part of the cost of acquiring the whole business and was money well spent. The accounting irregularities are likely to revolve around the valuation of stock, with the revised loss for the last year of trading resulting from a more realistic assessment of the value of old & superseded equipment.

I don't agree, his accountants looked at filed accounts which are now turning out to be massaged to show DG in a better light showing a small profit after tax in 2014 and as such a going concern with capital investment and being solvent, the truth of the matter now is that for same period losses were hidden of over £4.7m!!

I agree that MA would have hoped he would take full control of DG as it was definitely underperforming based on the accounts previously filed but those accounts were fraudulently incorrect and this is why there are investigations, it's not just a decimal point were talking about here, to show a company solvent and file accounts declaring a small profit when in truth it's dead in the water is a criminal act!

 

[Fish]

While I'm inclined to agree with most of this post, the bold bit strikes me as completely wrong! That 3.5m has been lost by MA - he is now simply a creditor of the oldco with no special priority over other creditors just because he now owns the newco.

You're right, it is illegal to have preferential creditors and as such his investment in the oldco is lost to the liquidators, the newco and any prepack formed to protect staff has no bearing on any previous business relating to the oldco.

I'd be interested to know whether Andrews paid himself and fellow directors a salary or dividends, as you may know, he could only take dividends if the business was trading a profit, the filed accounts said it was but it wasn't, wonder if the massaged figures were to take as much out as possibly leading up to it's demise! The liquidators will look back 6 years I think, well they did with me and anything purchased or taken out personally during that period if deemed to be insolvent will be investigated and possibly ceased!

 

[ManinBlack]

While I'm inclined to agree with most of this post, the bold bit strikes me as completely wrong! That 3.5m has been lost by MA - he is now simply a creditor of the oldco with no special priority over other creditors just because he now owns the newco.

The£3.5m will be regarded by MR as part of the cost of acquiring 100% of Direct Golf, very cheap compared with the cost of buying it as a going concern.

 

[ManinBlack]

I don't agree, his accountants looked at filed accounts which are now turning out to be massaged to show DG in a better light showing a small profit after tax in 2014 and as such a going concern with capital investment and being solvent, the truth of the matter now is that for same period losses were hidden of over £4.7m!!

I agree that MA would have hoped he would take full control of DG as it was definitely underperforming based on the accounts previously filed but those accounts were fraudulently incorrect and this is why there are investigations, it's not just a decimal point were talking about here, to show a company solvent and file accounts declaring a small profit when in truth it's dead in the water is a criminal act!

Do you honestly believe that Ashley's advisers only looked at the filed accounts? They would have looked in great detail at inventories, up to date management accounts & taken a view on the company's profit & loss & cash flow forecasts. I am an ex Chartered Accountant & business banking manager & have seen this kind of work from both sides. They will have gone through the books with a fine tooth comb.

 

[Scotty Cameron]

Hu? They have to make a living....

Some living and its funny how they got their money even though there was nothing for anyone else.

 

[mashleyR7]

Direct golf are no longer credible as a golf brand for me.

 

[Foxholer]

The£3.5m will be regarded by MR as part of the cost of acquiring 100% of Direct Golf, very cheap compared with the cost of buying it as a going concern.

Can you explain exactly what the 3.5m expenditure actually achieved?

If not, it was simply 3.5m expenditure that didn't need to made - as simply waiting and buying it as a newco - as he eventually did - would have cost nothing!

So as an investment, it turned out to be a poor one - pretty much a 100% loss. Considering it to be part of the cost of acquisition is merely whitewashing the gamble of not doing adequate Due Diligence. But perhaps only a small one compared to the 100m 'hole' the lack of DD failed to discover in the NUFC purchase!

 

[power fade]

Not sure what the "crap options" are that you refer to, we have laws that are in place to safe guard consumers and to be fair, also the retailer as both parties can be as deceitful as each other.

Have had bad experiences returning goods to SD.

As I don't like poor service Its just another reason why I tend not to buy from them. The other things I mentioned are beyond dispute. Cheap and not very cheerful is the order of the day.

The place looks like a jumble sale and several brands have been cheapened under the stewardship of MA. Any company that treats the staff the way they do doesn't deserve my cash. Can see direct golf going the same way.....Donnay golf shoes anyone?

 

[ManinBlack]

Can you explain exactly what the 3.5m expenditure actually achieved?

If not, it was simply 3.5m expenditure that didn't need to made - as simply waiting and buying it as a newco - as he eventually did - would have cost nothing!

So as an investment, it turned out to be a poor one - pretty much a 100% loss. Considering it to be part of the cost of acquisition is merely whitewashing the gamble of not doing adequate Due Diligence. But perhaps only a small one compared to the 100m 'hole' the lack of DD failed to discover in the NUFC purchase!

It made MA / Sports Direct a creditor & shareholder of Direct Golf & enabled MA to petition for the winding up of the company & do the deal with the liquidator. Without MA's involvement John Andrew would have formed the Newco & bought the business out of administration, which he was attempting to do before MA's intervention.