In November 2010, Batash Karim stood before the judge at Bradford Crown Court.
The 31-year old, who lived at Gordon Street in the Yorkshire town of Keighley, was on trial for his part in a violent attack that left a man with life-threatening injuries. During the trial, witnesses described how the victim — who denied in court that he was a member of a local drug gang — had been struck with weapons including an axe and kicked and punched by a group of men.
Karim and five others were cleared of attempted murder but found guilty of the lesser crimes of unlawful wounding and violent disorder.
“You went out armed with weapons, prepared for a confrontation and taking the law into your own hands,” the judge told the six men, while handing down 18-month prison sentences, according to a report in the Bradford Telegraph & Argus. “It was a horrendous episode of public disorder in Keighley late at night.”
That same month, a 31-year old Batash Karim stepped down as a director of Ezi Floor Limited. Karim had incorporated the manufacturer of carpet underlay four years earlier in 2006, listing his address as Gordon Street in Keighley.
Are the two Batash Karims the same person?
According to Victoria plc, it should not matter. But it is a question that has long troubled shareholders of the Aim-quoted carpet maker, whose shares briefly plunged as much as 20 per cent last Monday after its auditor warned there was a “risk of material fraud” in its accounts.
Grant Thornton’s qualified audit opinion focused on a host of issues at subsidiary Hanover Flooring, identifying “risk factors of fraud”, breaches of money laundering regulations and “potential irregularities in respect of certain transactions”. Notably, Victoria’s management and board imposed a limitation of scope, preventing Grant Thornton from carrying out further audit work on these issues at Hanover.
Victoria purchased Hanover in 2021 from Batash Karim, who stayed on as the manager of the carpet distribution business. He is also a director of Hanover Flooring alongside Geoff Wilding, Victoria’s executive chair, who since taking the helm in 2012 has spearheaded an acquisition spree of more than 20 flooring companies.
Victoria purchased Ezi Floor in 2016 and has previously identified the seller as Batash’s younger brother, Saqib Karim.
Victoria has downplayed the issues identified at Hanover, casting it as a small subsidiary with inadequate record keeping that has had no impact on the group’s financial statements. Wilding gave the following account of the matter in a statement published in advance of the company’s AGM last Friday:
[O]ver this last week the strong outlook for Victoria has been overshadowed by the considerable reaction to our auditor’s qualified opinion deriving from incomplete accounting records at a small subsidiary, Hanover Flooring Limited — a business which as a whole represents less than 1.25% of Group turnover. The Board wishes to stress that there was no wrongdoing whatsoever at Hanover that impacts the Group’s financial statements and nor are the auditors alleging this. Hanover’s issue was predominantly one of having heightened financial risk due to inadequate accounting records associated with no more than £400,000 of customer receipts.
I would like to assure our stakeholders that we had identified the issues at this small subsidiary and allocated additional experienced finance resources who have put appropriate controls in place to ensure adequate accounting records and internal controls will be maintained to the high levels we have solidly embedded across the rest of the Group. From the extensive work undertaken by ourselves and a ‘Big-Four’ accounting adviser, we are very clear that all payments due have been received, no money is unaccounted for and Victoria has suffered no loss. We are also very clear that there are no other such concerns across the rest of the Group and our auditors have confirmed that these accounts give a true and fair view of the Company.
Given these issues, however, it would seem relevant information for shareholders if the manager of Hanover also has a criminal record. The local news articles about the attack in Keighley have not gone unnoticed in the market, with numerous investors having flagged to FT Alphaville a possible link.
In light of the speculation we thought it was important to prove whether it is the same person.
It’s not the first time we’ve sought clarity. Back in August 2022, FTAV asked Wilding about Batash Karim’s apparent conviction. The conversation occurred in the wake of a short seller report on Victoria from Iceberg Research, which focused on some aspects of the Ezi Floor and Hanover acquisitions, albeit without mentioning Batash Karim.
Wilding would only speak on the matter off the record.
In the wake of Grant Thornton’s audit report we thought it might be useful to reopen the file and garner more information beyond the matching details in contemporaneous press reports.
Our messages for Batash Karim, left by phone with Hanover employees and by email, received no response. Instead, we spoke to a local businessman who said he knows both Saqib and Batash Karim, and who asked not to be identified. He assured us that the Batash Karim who runs Hanover has a criminal conviction for his part in a violent attack.
Next, we asked Bradford Crown County if it could provide the full date of birth of the Batash Karim who was convicted of unlawful wounding and violent disorder in 2010.
While Batash Karim only provided his month and year of birth on the Companies House statement when he became a director of Hanover Flooring, a full date of birth is listed on the 2006 incorporation documents for Ezi Floor. Bradford Crown County came back with a date of birth that exactly matched this.
FTAV shared its findings with Victoria and asked for comment. Below is its statement:
There have been no accusations of serious financial misconduct or wrongdoing at Hanover Flooring Limited, a small subsidiary which represents less than 1.25 per cent of Victoria’s total turnover. The Company has acknowledged that some accounting records at this subsidiary were inadequate and resulted in an inability to reconcile some customer receipts totalling less than £400,000. Appropriate controls are now in place in line with the high level of internal controls that exist across the Group. From the extensive work undertaken by ourselves and our accounting advisers, we identified that the subsidiary received a small number of cash payments in excess of the High Value Dealer limit of £8,500. All payments due have been received, no money is unaccounted for, there are no accusations of money laundering or financial wrongdoing, and Victoria has suffered no loss.
This article singles out an employee of Victoria who was convicted of a crime nearly 13 years ago, and who has duly served their sentence, and is a good example of a successfully rehabilitated offender with no further instances of wrongdoing. The Rehabilitation of Offenders Act 1974 is explicit that it is illegal for employers to discriminate against applicants based on spent convictions and the employee in question was not convicted of an offence of dishonesty or financial corruption, nor are they a safeguarding concern. It is very disappointing to see the Financial Times ignore this principle of law and harass an employee of Victoria when no accusations have been levelled at them. Michael Hastings, chair of Soas University of London, founder of Crime Concern and co-founder of Catch22 wrote in this newspaper in April 2023: “…exclusion from employment for people who have already paid their dues denies deserving individuals another chance to contribute. This makes our society less prosperous and less equal.” If only your own editorial policy would follow suit.
Further reading:
— Victoria plc’s audit nightmare (FTAV)
— Victoria plc: we’re going to need a bigger boat (FTAV)
Read the full article here