£850k owed from Oasis deal
5:00am Monday 16th June 2014 in By Mike Benke, @Michael_Benke
A NUMBER of Swindon businesses have lost thousands of pounds after a company that used to run the Oasis went bankrupt.
MW Contract Services Limited, formerly known as Oasis Leisure Limited, went into voluntary liquidation this year owing more than £850,000 to 62 creditors.
Among them is Storm Recruitment, based on Commercial Road, which is owed £4,721, and Carlton Services in Old Town, which is owed more than £2,000.
On top of that, the company owes more than £260,000 to HM Revenue and Customs.
Oasis Leisure Limited was a shell company of Moirai Capital, which holds the lease to the iconic leisure centre and was responsible for running it between June 2012 until March 2013.
However, the overall losses mounted and it was sold, along with all the accrued debts, for £1 to a Miroslaw Wojciechowski, who renamed the company. It was intended that the company would provide maintenance to other leisure sites through contacts made in the council but only one was picked up, so it was decided to dissolve the company in January this year.
As a result, a number of businesses have been left out of pocket and are feeling frustrated over being owed the money for more than a year.
Steve Botting, an office manager at Storm Recruitment, said: “We provided some workers who did some landscape work at the Oasis over a year ago but we have not received payment for it and there has never been any question about the quality of the work.
“We are still in contact with Moirai, who have been informative and told us they will try and get some money to us but unfortunately this does not balance the books.
“This is an independently owned business, which has been on the Swindon high street for 35 years, and it is us who have been left out of pocket by the company with a multi-million pound contract.
“It also appears to have happened to other companies in Swindon, which isn’t right.”
The losses have raised questions as to whether the council showed adequate due diligence before handing out the lease to Moirai, which plans to build an indoor ski-slope and a concert venue on nearby land as well as completely refurbish the Oasis centre.
The Adver has seen an email written by a business owed more than £10,000, not based in Swindon, to the council complaining about the situation.
It includes a letter from Moirai, in which the company admits that upon taking the contract ‘we started to discover various contracts of which we knew very little about” and “upon further due diligence we discovered a major failure in our previous forecast”.
The email reads: “I am writing to inform you of the disgraceful behaviour of Oasis Operations Ltd and its directors since taking over the running of the Oasis Leisure Centre from yourselves in June 2012.
“Of course we do not expect Swindon Council to underwrite the debts incurred by its appointed contractors.
“However, we would expect any due diligence performed prior to awarding any contract to have thoroughly reviewed the companies bidding, their business plans and financial history to ensure that they were fit to manage a public service such as the Oasis Leisure Centre.
“In this case, the contractor does not seem to have understood requirements of the contract.”
As it stands, almost £2m has been invested in the Oasis by Moirai towards transforming the reception area and gym, but there have been delays in other work and there has been no planning application for the expansion work.
The Labour group has now called for a full investigation into the Moirai deal and for the leisure lease to be halted until the full details are known.
The council is looking to save money by leasing out all leisure and golf facilities and the results of the consultation and negotiations with interested parties are due to be released this week.
The shadow spokesman for leisure, Jim Robbins (Lab, Mannington and West) said: “I want to today call on the council’s leader to open a full investigation into the situation at the Oasis, and report back to the council on whether the Morai group are solvent, competent and can deliver on the promises that they made. “Do they have any investors in place to fund the planned work at the Oasis? And will they be paying back those companies their shell company owes money to?
“I’d also like to see the proposed Leisure Lease due to go to cabinet later this month postponed until the investigation is completed and the full lessons of the Oasis Lease can be learnt.”
The council has said that a due diligence process was carried out ahead of the lease being handed over but the option does remain in place to withdraw it if deadlines are not met.
Coun Keith Williams (Con, Shaw), cabinet member for leisure, said: “When the lease was given out there was a due diligence. We made the lease available and a number of companies expressed an interest, with three making it to the final stage.
“Although I was not involved, a scoring exercise was carried out into each one looking at a range of factors including, I believe, credit rating and it was decided Moirai was the best choice.
“We accept the development has not gone as fast as we would have hoped, as we should have seen significant movement by 2015 but there has not yet been a planning application.
“From a council perspective, we sympathise with the companies who have lost money but we are unable to get involved in the repayment of money.
“What I would say is there is now a new gym and reception area and we are no longer subsidising the Oasis which has saved the taxpayer, so far, £1m.”
Coun Williams also said the leasing of the leisure centres is a different situation and, with the report due out this week, the council will not be stopping the process.
He said: “The leasing of the Oasis was a completely different situation. “There we were looking at a regeneration project worth £65m which could bring 1,500 jobs to the area.
“We are looking to lease the leisure services as a way of saving an annual subsidy of £1.5m.
“Unfortunately, because we have been in talks, we have not been able to be as forthcoming as perhaps we would have liked but when people see the appraisal they will hopefully see it is not anywhere near as bad as many have feared.”
Moirai were unavailable for comment over the weekend.
Comments are closed on this article.