Rogue businessman faked evidence to cover £5m fraud, council alleges

A businessman has been accused of giving forged evidence to the high court to cover his tracks after pocketing £5m of taxpayers’ money in a deal with a local council.

Liam Kavanagh allegedly created a “sham” invoice showing a transaction between two of his companies when he had in fact paid the money to himself, according to Thurrock council.

The Essex authority says this was to corroborate a lie told in court by Kavanagh and that his deception cost Thurrock up to £37m. A spokesperson for Kavanagh told the Bureau of Investigative Journalism (TBIJ) he “strenuously denies” the allegations.

Thurrock’s deals with Kavanagh and his companies, totalling £655m, effectively bankrupted the council and amounted to potentially the largest fraud ever perpetrated against a UK local authority.

Thurrock sued Kavanagh and his company Rockfire Capital for fraud last year. The new allegations are contained in documents filed this month as part of that legal case, which has yet to be heard in court.

In June 2018, Kavanagh wrote to officials at Thurrock, including finance director Sean Clark, to propose an £84m investment. The money, he said, would be used to buy out bank debt connected to 19 solar farms – referred to as the Wirsol portfolio – which the council had previously invested in.

Thurrock alleges that Kavanagh claimed three times – twice by email and once in a bond document – that the bank debt was £84m, when it was in fact about £78m.

The council transferred the full amount to Rockfire Capital on 30 August 2018. A day later, Rockfire allegedly paid just under £78m to the bank and another £5m to Kavanagh himself.

Thurrock claims that Kavanagh made false or reckless representations about the bank debt before “dishonestly” seeking to cover up what he had done.

It cites evidence Kavanagh gave during a high court trial in October 2020, when it emerged that Rockfire’s bond invitation made no mention that £5m of Thurrock’s money would go to the company as a commission fee.

Kavanagh told the court the council had already transferred the full funds before the document was issued. The council says the document was in fact provided to them on 11 August, more than two weeks before the payment was made.

“Mr Kavanagh intentionally lied about this issue in court,” states Thurrock’s particulars of claim. “He then sought to cover up that conduct by giving false evidence on this point.”

The evidence in question is an invoice produced by Kavanagh for the £5m commission, which appeared to show a transaction between Rockfire and another of his companies, Toucan Bond Co 19.

“The council infers that the ‘invoice’ was a sham and a forgery, created by Mr Kavanagh (or on his instructions) to seek to support his companies’ case in those proceedings,” says Thurrock’s particulars of claim.

“The council has identified no trace of any reference to a commission payment in any contemporaneous documents. Moreover, there is no reference to this payment in the filed accounts for the relevant period of either Rockfire Capital (despite those accounts containing a lengthy list of transactions with related parties) or Toucan Bond Co 19.”

Kavanagh has consistently denied involvement in fraud. His spokesperson told TBIJ that any suggested he misled Thurrock officials is “denied in the strongest terms” and that he “will put forward a robust defence in due course”.

They said Thurrock’s investments generated significant revenue and that “Kavanagh believes that the council is now trying to litigate its way out of the financial troubles that are of its own making”.

The council’s claim references the judgment from that trial, which said that Kavanagh was “very likely” the source of misleading information that led to the £5m fee; that the bond document “contained clear untruths”; and that the transaction may have amounted to a “covert extraction of funds by Mr Kavanagh for his own benefit”.

TBIJ previously revealed how Kavanagh pocketed as much as £130m of public funds after inflating the value of solar farms to convince Thurrock to increase its investments. He then used the money to buy a mansion, private jet, yacht and a fleet of supercars. He has always denied wrongdoing.

TBIJ’s reporting prompted a government-commissioned inspection, an investigation from the accounting watchdog and the resignation of three senior council officials, including Clark. He has since been barred from practising as an accountant for five years – the first time the regulator has imposed sanctions on someone in local government finance.

The solar farms were sold in February 2024, resulting in some money being recovered, though Thurrock claims it “sustained a substantial net loss”.

The council says it has sustained losses of between £32.5m and £36.7m as a result of being misled about the additional investments. In total it is alleged the council will have lost around £200m as a result of all the deals with Kavanagh and his companies.