A solar firm paid £400 million by a debt-ridden council is facing an investigation by the Serious Fraud Office after its a Dubai-based CEO spent almost half of it funding his luxury lifestyle.
The body, responsible for investigating complex financial crime in the UK, has issued a series of Section 2 notices compelling financial institutions to provide information after launching the probe into the Rockfire Group.
Headed up by solar tycoon Liam Kavanagh, Rockfire convinced Thurrock Council in Essex to invest £400 million in bonds for a green energy scheme involving solar farms – before its CEO allegedly blew £150 million on properties, jets and yachts.
In a High Court lawsuit last year, Thurrock Council accused Kavanagh, 47, of spending £13.7 million on a new yacht, £9.1 million on a private Bombardier jet, £20 million on a 232-acre country estate in Hampshire and £3 million on a Mallorca property.
The council initally invested £268 million in bonds sold by Rockfire Investment Finance Plc, and other companies in the Rockfire group.
The firm is now in administration, with just £90 to its name at the time according to a statement of affairs, which also listed the company as owing £168,997,476 to Thurrock Council.
Rockfire promised a three to six percent return on any investments made in addition to the bond costs.
In its High Court filing, Thurrock Council said it went on to make further investments based on ‘fraudulent misrepresentations’ and claimed Kavanagh deliberately ensured ‘completely unrealistic’ electricity prices were used to increase the farms’ value.
The council was effectively declared bankrupt in December 2022 after accruing debts totalling £1.4 billion.
The council’s involvement with Kavanagh, who is based in the UAE, began in June 2016 when, alongside Warrington and Newham councils, it financed the purchase of a solar farm in Swindon through bonds marketed by his company Rockfire Capital.
Over the next two years, Thurrock helped buy 53 sites across the UK, all of which are now owned by Kavanagh.
The investments were issued through a complex series of bonds, all due to mature in the next three to four years. In return, Thurrock would get interest payments worth millions of pounds.
Red flags were first raised after accounts showed Kavanagh’s firm pocketed £5 million in ‘commission’.
Days after concerns emerged about Thurrock’s solar deals in 2020, a new company, Anyard Holdings, was registered in the Isle of Man.
Kavanagh subsequently liquidated key companies that owed the council hundreds of millions and transferred the solar farms into the new offshore structure.
In total, according to Companies House, he has had roles in at least 96 different companies since 2006.
Cllr Victoria Holloway, Cabinet Member for Place and the Environment, said: ‘Since these catastrophic investments first came to light, this administration – standing firmly alongside our residents – has consistently and rightly called for a full investigation.
‘We therefore strongly welcome today’s announcement from the Serious Fraud Office (SFO). It represents a vital step toward securing justice and ensuring accountability on behalf of our communities.
‘Thurrock Council will continue to fully support this investigation and will make sure the SFO has access to all the information it requires, as we have continued to do since these losses were uncovered.
‘Alongside this, the council is vigorously pursuing civil claims against Rockfire and its owner, Liam Kavanagh, to recover public funds lost through these failed investments. Today’s announcement strengthens our resolve to see this through.’
To date Thurrock Council has already recouped more than £650 million of public money from its various historic investments.
Director of the Serious Fraud Office, Nick Ephgrave QPM, said: ‘Today’s action is a significant step in our investigation concerning this suspected criminality.
‘We are grateful for the assistance of Essex Police, Thurrock Council and others in the early stages of this enquiry.’
In a previous statement at the time of the High Court filing, Kavanagh denied all the allegations, adding: ‘The claim has not been validly served on Mr Kavanagh and he is confident that his application challenging the court’s jurisdiction will succeed.
‘Irrespective of the question of jurisdiction, Mr Kavanagh strenuously denies the allegations. If and when necessary to do so, and should the court permit the claim to proceed, Mr Kavanagh will be putting forward a full defence.’