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Tuesday, 17 January 2012

Directors of Sangs and Calanike speak out about administration

The directors of Sangs and Calanike, who have seen their companies put into administration this week, have spoken out about the actions of Allied Irish Bank (AIB).  Sangs, the drinks manufacturer, and Calanike, the petrol retailer, who between them employ over 300 people, claim that AIB put them into administration without warning.  In fact they claim that they have not defaulted on any of their loans and are in profit.  In the case of Calanike the firm has over £5m in assets and reported a profit of £192k.

So what has happened?  Well, the lender has the right to call in its loan at anytime and given that AIB is in a perilous situation themselves this seems to be what has happened.  The benefit to the bank of not calling in the loan is that they can charge interest on the loan and make a profit.  However, if they want all their money back suddenly they have the power to appoint an administrator to secure their position.

Both firms are taking legal advice but the small print on such loans does usually say "payable on demand" and the courts have upheld that if you cannot pay "on demand" then you have technically defaulted.





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