Von Essen administrators call for police investigation
Ernst & Young is reported to have contacted City of London Police after concerns over accounting irregularities at Von Essen Hotels. A loan, thought to be in the region of £30m, is believed to have been spent shortly before the company fell into administration.
The loan had been set aside for capital expenditure. Administrators are trying to establish whether the money was invested into the hotels or on keeping the business afloat, which could include keeping up with interest costs.
Von Essen, collapsed into administration last month. Its bankers Lloyds and Barclays called in Ernst & Young after the company failed to keep up on the interest payments on its £250m debt pile.
The administration covers the Von Essen Hotels holding company, Von Essen Hotels Ltd. Most other parts of the business, have not been put into administration allowing the hotels to operate as usual.
The hotel group was assembled over 15 years and it is thought that the company had turned the corner more recently. However it had been troubled by rumours of financial difficulties and late payment of bills.
It is not certain whether the police will decide to launch an investigation.