A financial expert has raised concerns about the future of Robin Hood Energy after it emerged the firm’s annual accounts are more than two months late.
The energy company is wholly owned by Labour-run Nottingham City Council and the delay means the authority’s accounts cannot yet be formally approved.
Now, an external accountant hired to examine the council’s accounts has said a decision needs to be taken on whether Robin Hood Energy (RHE) is a “going concern” – whether the company can continue trading for the forseeable future.
John Gregory, director of accountancy firm Grant Thornton, told a meeting of the council’s audit committee last week the authority’s “exposure” to RHE – meaning how much money the council has invested in the company – was “in the region of £40 million”.
Exact financial details were not disclosed on the grounds of commercial sensitivity, but Mr Gregory told the meeting: “The audit of Robin Hood Energy has still not been signed off.
“So essentially the message I’m giving you is that I don’t think this is a great situation for you to be in.
“The council in its role as shareholder of RHE should be putting a lot of pressure on the company to finalise things, because as things stand it is delaying a key part of the overall public accountability process.
“I have been liaising very closely with the auditors of RHE and I don’t have any doubts as to the need for that information to be provided.
“Any movement in the accounts of RHE clearly has an impact on the overall accounts.
“The fact is since the draft accounts were produced by Robin Hood Energy which were used to produce your draft accounts, those (RHE) figures have moved by a number of millions of pounds. And not in a favourable direction either.
“There needs to be a clear view taken as to whether RHE is a going concern, because if it’s not for any reason then the values disclosed in its accounts are completely inappropriate.
“Given that your total theoretical exposure on RHE is something in the region of £40 million, that’s why it matters.”
The accounts of RHE were expected to be published by July 31. As of September 30, they are yet to be made public.
Mr Gregory added: “There will come a time when my patience will wear thin and I will be looking at, in terms of my response to not finalising your accounts, producing a public interest report.
“A public interest report is a high profile report which the council has to consider in a public session and produce a public response to.”
Mr Gregory went on to say the Ministry for Housing Communities and Local Government would likely be “taking an interest” should a public interest report be published.
“I have not been in direct contact with RHE, I have been liaising with the auditor of RHE, so I’m conscious that I might have had a one-sided story, but I have absolutely no reason to doubt that story,” he said.
“I know what (information) is outstanding, I don’t know why it hasn’t been provided.
“A suggested recourse is that the audit committee actually calls in someone from the company to hold them to account.”
A joint statement from Robin Hood Energy and Nottingham City Council said the company had not received documentation from the authority which auditors need to file its accounts.
It read: “Robin Hood Energy has not yet received the ‘letter of comfort’ from the council that its auditors require due to complex issues around the company’s audit process.
The chairman of the committee, Councillor Steve Battlemuch, is also the chairman of RHE.
After the committee took legal advice, he temporarily stood down from chairing the meeting while the RHE situation was discussed. However, he remained in the room.