Businessman admits to pocketing millions from Thurrock council

Liam Kavanagh has finally admitted pocketing a “substantial part” of the £130m that Thurrock council thought it was investing in one of his solar farm ventures.

Almost three years ago we revealed how a vast sum of taxpayers’ money had funded Kavanagh’s luxury lifestyle. His purchases included a country estate, a private jet and a sailing yacht. Through aggressive legal letters to us, Kavanagh has repeatedly denied receiving public funds that were intended to be investments. Until now.

Our findings eventually led Thurrock to sue Kavanagh for fraud, the council claiming that the entire £130m was lost. In his newly submitted response, Kavanagh admits to receiving a large part of that money “for his own benefit”. He says he “honestly believed he was entitled to receive the monies that were transferred to him and to do with as he wished.”

Kavanagh has also acknowledged that in the months after his company received £50m from the council, nearly £14m was spent on a yacht, £9m on a jet, £3m on a villa in Mallorca and £800k on a sports car. But he says he is “not able to admit, on the information currently available to him, how the acquisition of these assets was financed”.

The 68-page defence is the most detailed account Kavanagh has ever provided about his business deals with Thurrock, which bankrupted the council when its £1bn investment policy collapsed in 2022.

In total, Thurrock poured £655m into bonds issued by his businesses, with most of the money used to buy 53 solar farms. The legal dispute primarily revolves around three payments – totalling £130m – that were top-ups of an existing investment rather than for the acquisition of new sites.

Thurrock provided £268m to help Kavanagh purchase 32 solar farms – referred to as the Miramar portfolio – in December 2017. The council then increased that investment on three occasions: £40m in November 2018, £50m in February 2019 and £40m in January 2020.

Thurrock insists these increases were subject to the same terms as the original deal, including a strict “permitted purpose” on how the money could be used. Instead, the funds were largely diverted to Kavanagh and used for his personal benefit, which the council describes as “unconscionable”, and a breach of contract and trust.

In his defence submitted to the high court, Kavanagh says he met with Thurrock’s finance director Sean Clark in November 2018 (likely at the five-star May Fair Hotel in London) to discuss further investments in his businesses.

He claims that he was considering selling the Miramar solar farms but that Clark tried to persuade him not to, encouraging him instead to “release value” by borrowing more money from Thurrock. As far Kavanagh was concerned, all subsequent investments were made on those terms.

Startlingly, he claims for each of the three top-ups, the council transferred the money without any paperwork to evidence that they had taken place.

Financial records we obtained show that £40m was transferred by the council to Kavanagh’s company Rockfire Investment Finance (RIF) after the November 2018 meeting. It then disappeared from its accounts in three payments, the largest of which was £36.5m. Kavanagh admits he “received the majority of the proceeds … for his own personal benefit” but that there was no “legal impediment to him doing so”.

The upshot was that tens of millions of pounds of taxpayers’ money – more than Thurrock spends each year on helping children with special educational needs – going straight into Kavanagh’s pocket in the space of a day.

In February 2019, Thurrock invested a further £50m. Kavanagh admitted that, after this transaction, RIF bought him the jet, yacht, car and villa but could not confirm how it had paid for them.

Another key part of Thurrock’s case is the evidence we uncovered that shows Kavanagh inflating the value of his solar farms. In January 2020, Kavanagh’s personal assistant Molly Warnock emailed Clark, copying her boss, to offer the council the opportunity to further top-up its investment in the Miramar portfolio. The email made clear this would be on the same terms as the original investment and attached a valuation of the sites by the Association of Public Service Excellence (APSE).

This valuation was based on a power price for the sites provided by Kavanagh’s company Rockfire Capital, which was much higher than the one calculated by Toucan Energy, the company that managed the farms. When Kavanagh was informed that this would have a “significant impact” on the valuation, he ordered his finance director, Ian Walsh, to use this higher figure.

“We’re not responsible for the investment decision of others, neither do we undertake [due diligence] on others’ behalf,” he wrote, adding that it wouldn’t be a problem for the council to “accommodate drops in income”. The reason to use the exaggerated power price was clear. “These funds … will be used to create a new family investment office and create wealth for years to come,” wrote Kavanagh to Walsh. “This has always been my plan.

“By all means check with me but I have given a direct instruction and that’s how it is.”

Thurrock claims these emails show Kavanagh’s personal involvement in providing APSE with a “completely unrealistic” average price, which led to a “grossly inflated valuation”. The council says it would not have made the top-ups were it not for that valuation.

Responding to the allegations, Kavanagh admits the price was provided to APSE on his instruction but that he “honestly believed” it was a fair one. He claimed the lower figure provided by Toucan had been based on the personal views of an employee who was not an expert in electricity pricing.

Kavanagh acknowledges that he knew the larger figure would lead to a higher valuation but claims that was not the reason he had ordered it to be used.

Clark did no due diligence to determine the accuracy of the APSE valuation (Thurrock has since sued 23 councils as part of its legal dispute with the organisation). On 27 January 2020, the council transferred another £40m to Rockfire Capital, which then forwarded the money to RIF.

Thurrock claims, as per our investigation, that £20.75m of these funds were used for the purchase of Ashe Park, a 232-acre country estate in Hampshire in December, and £38.6m transferred by RIF to Kavanagh personally in two transactions later that same month. Kavanagh admits the transactions took place but denies they were made using the money provided by the council in 2020.

He says his ability to respond to the council’s allegations has been “hindered by his current lack of access to documentation” and his “limited personal recollection of the facts and matters”, in part because he says he was not involved in the day-to-day management of his companies but instead “provided high level strategic oversight”.

This is the defence Kavanagh has put forward in response to Thurrock’s allegation that he gave forged evidence to the high court – a “sham” invoice between his two companies – to cover up the fact that he had pocketed £5m during one of the solar deals.

Kavanagh claims he “did not have responsibility for the preparation of bond documentation and related materials”, including the invoice, and admits he “did not review such documentation in detail prior to signing them”. Instead, he relied upon his finance and compliance teams, headed by Andrew Williams.

Kavanagh has also sought to shift the blame onto the council. He said it was Clark, not him, encouraging the top-ups in the Miramar portfolio, claiming the finance director ultimately wanted to increase the council’s solar investments to £1 billion. He also pointed to the organisational weaknesses identified by a government-commissioned inspection, the findings of which were published in May 2023.

“The council’s own failings led it to make, instead of appropriately diversified investments, investments heavily concentrated in the solar renewables sector,” Kavanagh’s defence states.

“That approach having resulted in losses, the council now seeks to recover them from its counterparties by advancing a case based on an inaccurate, ex post facto attempt to recast the reasons for [its] investment.”

Thurrock poured £1bn into secretive investments between 2016 and 2020. Most of the money went into Kavanagh’s solar farm bonds, deals which are now the subject of an investigation by the Serious Fraud Office. There were other disastrous deals too, including £94m into an alternative lender that went bust (only £19m of which has been recovered) and £14m written off after a wood-chipping company went into administration.

The solar farms connected to Kavanagh were sold last year, recouping some of its debt, but Thurrock continues to require substantial financial support from the government to fund its running costs. In a March letter announcing that the council is to be merged with Basildon to become South West Essex council, secretary of state Steve Reed confirmed the government will pay off a further £200m of Thurrock’s debt in 2026-27.

Reed wrote: “This is not a decision that has been taken lightly but is necessary to protect taxpayers from the spiralling cost of ever-increasing debt.”