Taxi boss John Preece: I'm wiped out... I have no money coming in any more'
FINANCIAL PRESSURE: John Preece says he has been left with no option other than to cease the trading activities of his firms Taxifast and Key Cabs
TAXI mogul John Preece has shut his Plymouth companies blaming a high street bank for driving them out of business.
Mr Preece today told The Herald he had been left with no option than to cease the trading activities of his firms Taxifast Ltd and its parent company Key Cabs Ltd.
He is also reviewing his personal finances, and said personal guarantees with a bank could put his Plymouth house in jeopardy.
“I’m not penniless,” he said. “But at the end of the day I’m wiped out. I have to sell things to get money. I have no money coming in any more.
“I’m left with two companies I have frozen. They are worth nothing.”
Mr Preece said changes to the way Lloyds TSB financed his companies meant they were struggling to meet the weekly pay bill of their 350 employees and private hire drivers.
He said if he had not closed the companies there was the possibility creditors would have forced them to be wound up this week anyway.
“We were at risk of going pop overnight,” he said.
A separate Plymouth taxi firm, in which Mr Preece is not involved, has made an offer to Taxifast staff and drivers to join it.
And calls to the Taxifast offices were yesterday being dealt with by a separate company too.
Mr Preece said he plans to launch a £10 million law suit against Lloyds TSB bank and its Lloyds TSB commercial factoring arm.
He claimed the bank’s actions forced his companies to face “inevitable failure” and caused him “personal distress and damage”.
Mr Preece spoke to The Herald while on the ferry to Santander in Spain. He was heading for his home in Portugal, and said that at 68 years of age he was now retired and planning to write his memoirs.
He said his house in the US is up for sale and his home in Plymouth may be under threat.
“They (the bank) took my personal guarantees. I’m liable for everything,” he said.
“What the bank has done is change my life overnight, at a stroke.
“The house in Plymouth is security for the bank, but I will fight them every inch of the way.
“I will go though a protracted court process.”
Key Cabs and Taxifast had other “minority” shareholders, but Mr Preece held the “majority” of shares and said he “controlled” the companies.
He said Taxifast was surviving the recession with an income of about £40,000 each week from drivers.
But the firm ran into trouble during the past few weeks following changes in the way the bank administered payment on factored invoices.
Factoring and invoice discounting are similar systems whereby firms receive cash up-front using sales invoices as collateral.
Invoice discounting involves a business borrowing a percentage of the value of its sales ledger.
Under a factoring arrangement the business sells its invoices.
Mr Preece said the bank shifted Taxifast to this latter arrangement.
“Having watched developments over the past few weeks of the introduction of a change in policy of how it administers payment on factored invoices I am in no doubt the change would destroy Key Cabs Ltd and Taxifast Ltd in a relatively short time,” he said.
“Not to act swiftly would have been irresponsible on my part.”
He added: “It changed our income and we could not pay the drivers.”
He said co-directors had stepped in, paying £20,000 a week for two weeks from their own resources to keep the company going.
But this could not be sustained and Mr Preece said he was left with no option
“My primary considerations had to be to the 350 employees and drivers of my companies and to that end I have stepped in and ceased the trading activities of the two companies as of midnight the October 16,” he said.
Mr Preece now intends to take the issue to court.
“I retired some years ago and intend to remain so,” he said.
“I am now 68 years old and am mindful of many battles in the past which involved protracted litigation to obtain taxi rights and to stop injustices against others and myself.
“I believe this latest battle is in the public interest.
“It is in the interest of many embattled businesses suffering the bailed-out bank regime syndrome.
“It is in the interest of many employees who unnecessarily lose their jobs due to bank foreclosures and the outcome may just stop some bankers and associated businesses trampling on them.
“I want to hear from any business person who feels subjected to unreasonable bank processes, has suffered distress at the hands of a bank, experienced enforced liquidations, been imposed on with exorbitant arrangement fees, or feels the subject of unfair treatment by a bank whilst in business.
“I have already started writing a book about this saga, I have called it Fighting Back,” he added. “A new website is being launched by me called fightingthebanks.org which will be available very soon.
“The book will be a full record of my past and forthcoming encounters with the bank, the litigation process, the helpers and the spoilers and will include all my negotiations with the bank as they will inevitably take place over the next few days, weeks or even months.”
Taxifast was formed in 1988 after Mr Preece sold his shares in bus company Western National Ltd.
He described Taxifast as “a quality company” and the first licensed taxi firm in the country “to achieve the highest commercial standards”.
He said: “Its quality credentials were known nationwide.”
No one from Lloyds TSB was available to comment last night.
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