A related party submitted claims for payment over and above the agreed contractual amount of £656,130 and withdrew funds from the bank account of the company.
The accounts initially make allowance for the sum of £538,224 calculated as follows:
Payments to Contractor £1,194,354
Less: Fixed Price contract £656,130
Investigations are continuing and court proceedings against the related party to recover the amount taken above the agreed contractual amount are contemplated.
The losses to the company in this respect have been estimated at £538,224 as at the financial year end as an estimate only. Additional claims may also be made against the related party for further damages and additional sums. The disputed sum of at least £538,224 has been included as a reduction in cash and recognised as a loss in the year in the 2021 accounts