Companies like Four Seasons with 28 care homes in East of England providing public services must be obliged by law to be accountable and transparent and holding assets in offshore companies with accounts not available to the public is not consistent with that aim

GMB, the union for care home staff, is calling for legislation to outlaw care home companies relying on public money for their income from holding assets in overseas tax havens. This is after Four Seasons Healthcare Group said it was not obliged to disclose its offshore accounts. Four Seasons run 28 care homes in the East of England. See note 2 below for full details of all 28 homes.

Four Season Healthcare Group has finally agreed to GMB requests to publish accounts for offshore companies based in Channel Islands and Cayman islands on its website within the next two weeks. ‘We’re not obliged to explain this to anybody – we’re putting this out for the sake of transparency,’ it was quoted as saying.

This new stance by Four Seasons is in response to a letter from GMB to Four Seasons auditors, KPMG, which asked for clarification as to how the figure of £294.5m for net assets in the audited accounts was consistent with the company claim in media that net assets are £950m. See notes to editor for copy of the GMB letter to KPMG. GMB has not yet had a response from KPMG.

GMB had written to Four Seasons Health Care Ltd. on several occasions requesting the accounts for their ultimate holding company, FSHC (Guernsey) Holdings Ltd., registered in Guernsey, and for another holding company, FINO Seniorco Ltd., registered in the Cayman Islands. GMB requests had been refused.

Shaun Graham, GMB Senior Organiser for the care home sector said, “GMB represent thousands of care workers employed Four Seasons who were transferred from Southern Cross last year.

As their union GMB has been seeking information from Four Seasons since last autumn as to how it will pay loans of £780m given that accounts audited by KPMG say it has net assets of £294.5m. Four Seasons has responded in press that it has assets of £950m but it had until now it has published no details of where these assets are held. Four Seasons now say they will publish some details but are under no obligation to do so.

From the point of view of the staff, the residents and their families that is a wholly unsatisfactory state of affairs. Given what happened at Southern Cross this is a belligerent and outrageous stance and shows Four Seasons management don't live in the real world but some offshore cloud cuckoo land. 

Four Seasons looks after elderly residents in 450 care homes in the UK of which 28 are in East of England. Four Seasons relies on public funds for the bulk of its income. It is essential that companies like Four Seasons providing public services are required by law to be accountable and transparent. The elderly and vulnerable in their care deserve nothing less. 

Holding assets in offshore companies with accounts not available to the public is not consistent with this aim.

GMB is calling for the law to be changed to outlaw care home companies relying on public money from holding assets in offshore tax havens risking a new Southern Cross. There is something wrong here and this change would be a big step towards responsible capitalism in action in this sector.”

End

Contact: Shaun Graham, GMB Senior Organiser on 07885 706 556 or GMB Press Office: Steve Pryle on 07921 289880 or Rose Conroy on 07974 251823.

Notes to editors:

1          Copy of GMB letter to KPMG 

Nicola Quayle,   Senior Statutory Auditor, KPMG LLP,St James’ Square, Manchester, M2

FOUR SEASONS HEALTH CARE GROUP

We write seeking your assistance to clear up confusion surrounding the accounts of Four Seasons, so that we may be able to reconcile what is in the public domain with what Four Seasons say are their assets.

We have written to Four Seasons Health Care Ltd. on several occasions requesting the accounts for their ultimate holding company, FSHC (Guernsey) Holdings Ltd., registered in Guernsey, and for another holding company, FINO Seniorco Ltd., registered in the Cayman Islands.  Our request has been refused.

As stated on page 26 of the Four Seasons Health Care Ltd. Directors’ Report and consolidated financial statements 31st December 2010, (registered number 5165301), audited by KPMG on 28th June 2011, the consolidated accounts of FSHC (Guernsey) Holdings Ltd. ‘are available to the public and may be obtained from Ogier Corporate Services (Jersey) Ltd’.   We have written to Ogier Corporate Services and our request has been ignored.  As auditors, does this concern you?

It has been quoted by Four Seasons that the most recent valuation of the company is over £950m.   Can you please tell us the source of this valuation?  We think that this is a figure that Four Seasons cannot substantiate rather than an audited figure from KPMG.  Can you please clarify?

The 2010 accounts for Four Seasons Healthcare Ltd. show fixed assets of £239m, current assets of £139m and a net asset figure of £294.5m.  After a detailed analysis of all 162 companies that fall under FSHC (Guernsey) Holdings Ltd, where annual accounts are published, we cannot find where a figure of over £950m could have been calculated from.  Do you know if this valuation and the assets of the group are hidden away in the accounts of companies based in the tax havens of Guernsey, Jersey, the Cayman Islands and the Isle of Man?

Where do the accounts for FSHC (Jersey) Holdings Ltd. fit into the complex structure of FSHC (Guernsey) Holdings Ltd?  Have the latest set of FSHC (Jersey) Holdings Ltd., along with FSHC (Guernsey) Holdings Ltd. and the other off-shore based companies,  been shared with KPMG?

We note from the Auditors Report, from the Directors’ Report and consolidated financial statements 31st December 2009, that there was an issue regarding the Group’s ability to continue as a going concern over the refinancing of the Group debt of c£790 million and it is stated that ‘this indicates the existence of a material uncertainty that may cast significant doubt on the Company’s and Group’s ability to continue as a going concern’. This statement is missing from the 2010 report yet the debt needs to be refinanced again by September 2012. Is there a reason for this?

In short, do KPMG recognise the Four Seasons quoted valuation of £950m and, if so, how is it sourced?  Has KPMG seen figures that reconcile what is in the public domain with what the Company say are assets of Four Seasons?

We are calling on KPMG, as auditors to Four Seasons Health Care, to release this information which we believe is in the public interest.  We look forward to hearing from you.

Best wishes, Yours sincerely, JUSTIN BOWDEN, GMB National Officer 

2          28 Four Seasons Homes in East of England