PracticeAccounting Firms£200,000 fraud claim over firm’s sale

£200,000 fraud claim over firm's sale

A businessman who bought an accountancy business has launched a legal battle for compensation of £200,000 after claiming to be the victim of fraud

Stephen Sellers bought
Grant & Co from
Kevan Grant, believing that it was a firm of chartered accountants, according to
a High Court writ.

But shortly afterwards, he discovered that the firm was not a chartered
accountancy practice, because Grant had not been a member of the
ICAEW since 1996, as he
had been declared bankrupt in 1995, it is alleged.

Seller is claiming damages from Grant, formerly of Manor Road, Verwood,
Dorset. He is seeking compensation for alleged fraud, breach of warranty,
fraudulent misrepresentation, breach of restrictive covenants, and an account of
profits.

He paid £115,000 for the business run from offices in Verwood in June 2004,
the writ says. He believed that the firm was chartered as Grant wrote on
letterheaded paper ‘Grant & Co Chartered Accountants’, and allegedly
produced documents referring to the firm as chartered accountants, displayed a
chartered accountant sign outside his offices, and exchanged draft agreements
stating he carried out business as a chartered accountant, the writ claims.

Grant is accused of breaching a warranty by supplying inaccurate and
misleading information, by failing to disclose that he had not been a chartered
accountant since 1996.

Without the fraudulent misrepresentation, Sellers would not have entered the
agreement, and the business that he bought is worthless, the writ says.

Sellers is seeking repayment of £92,000 he paid towards the £115,000 price of
the business, £22,293 in interest, and £4,850 to cover his legal costs.

He also accuses Grant of breaching restrictive covenants by carrying on an
accountancy practice, called KMG Consulting, from his home between April 2005
and January 2006, and of approaching former clients.

He says Grant started up business within seven miles of the Verwood offices
deliberately, in the hope that Sellers would not discover what he had done, and
believes he has used confidential information in files.

Grant declined to comment on the writ when contacted by Accountancy
Age
this week.

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