Liverpool Council have been accused of 'misleading the city' over a deal in which they claimed to have gained control of the city's markets for £1.
In 2016 the council bought Geraud Markets Liverpool Ltd, the company that managed the city's markets. At the time the council said they paid just £1 for the company which was renamed Liverpool Markets Limited, (LML).
Councillor Malcolm Kennedy, then cabinet member for regeneration, described the deal as a 'watershed' for the city. However it has now emerged that the deal involved the council waiving a large debt owed to them by Geraud.
READ MORE: 'Shock' over multi-million collapse of Liverpool markets company
A financial statement for LML posted on Companies House explains that £515,073 was written off to enable the purchase of the shares. The council has said 'legacy' issues around the management of the markets will be looked at.
The document, posted in December 2018, reads: "Geraud Markets (UK) was the parent undertaking until September 2016. The exceptional charge in the prior period included in the statement of total comprehensive income includes £515,073 in respect of balances owed by the Geraud group which were written off by the company as a condition of the purchase of the shares held by Geraud Markets (UK) Limited."
The report was signed off by Darren Hardy, in his capacity as a director of LML. Mr Hardy was also a divisional manager within the city's regeneration department at the time.
LML managed well-known markets such as St John's in the city centre and Great Homer Street in Everton. The company entered into liquidation in May 2019.
Colin Laphan, Chair of Liverpool Markets Traders Association, said: "Market Traders across the whole of Liverpool were stunned to discover that the council had misled the people with the spurious claim that they had taken the “markets” back for a £1.
"When it was already known to them that part of the deal was to write off over £500,000 of debt."
Last week the ECHO revealed that LML owed the council millions of pounds following its collapse.
Information on Companies House records the company was formed in 2003 and Liverpool Council took control of the company in 2016, buying all the shares. The accounts from December 2015 showed a deficit of £965,330.
This deficit increased to £2,398,077 in March 2017. The latest figures posted earlier this month show that LML owes the council £3,469,896.00.
Mr Laphan voiced fresh concern about the way in which the company had accrued so much debt over recent years.
He said: "Over recent years tens of millions were collected by the markets company, but there is no transparency as to where this money went. We asked for service charge schedules for over 15 years.
"This is just an example of the lack of accountability and foggy conditions around the markets revenues. Great Homer Street probably put in around £500,000 income per year.
"As traders all we have had one broken promise after another. People in office seem to have forgotten their basic obligations to the community and must be held to a higher standard."
Liverpool council announced the £1 deal in 2016, when a spokesman said: "The city council today paid a nominal £1 to take over Geraud Markets Liverpool Ltd and will now run all day-to-day market operations with immediate effect."
Speaking on behalf of the council at the time Cllr Kennedy, who resigned as a councillor in October 2021 after moving to Spain, said: “This deal is a watershed moment in the history of Liverpool’s markets and ensures they will once again become a major asset in our flourishing retail sector.
"As a city council we are investing millions in upgrading the facilities and the time had come to take back full control of the operations.
"As a result of this new deal we will be able to host, manage, promote and deliver the markets in-house and ensure a standard of quality befitting the new facilities that we are investing in.
"This new approach will give current tenants, future traders and customers a single point of contact that will enable us to improve the market offer right across the board from farmer’s markets, international markets and the Christmas markets.”
Councillor Harry Doyle, cabinet member for culture and the visitor economy, said: "Any legacy issues that arise over the management of the markets will be looked at by officers and no stone will be unturned. "That's why I have called for a review to reset our relationship with the traders going forward."
