A Hampshire-based recruitment business has been acquired out of administration for the third time in four years, leaving millions of pounds owed to the public purse. The series of insolvencies appears to involve 'phoenixism', a process where companies are liquidated and directors restart with a new entity free of debts.
HM Revenue and Customs (HMRC) estimates phoenixism cost the exchequer about 22% of the £3.8bn in tax losses reported in 2022-23. The latest case involves Sert Group and Sert Training, which collapsed in January and were bought for £196,304 by an unconnected buyer that insisted the previous management remain in place.
The management, including chief executive Mark Edwards and chief financial officer Ben Knight, had run two earlier versions of the business that also went into administration. Together, the three insolvencies leave creditors £7.6m out of pocket, including about £4.5m owed to HMRC, according to Tech City Labs.
In February 2022, Edwards and Knight were directors of 3R Global when its assets were acquired by Sert Workforce Solutions for £60,000 after administration. Sert Workforce Solutions then entered administration in October 2024, with its assets bought by Sert Training for £50,000 plus 7.5% of future profits. Sert Training lasted 15 months before its administration and sale to Meraki 6.
The administrator's report noted two offers to buy Sert Training were contingent on existing management staying. Lawyers for Meraki 6 said the purchase was not phoenixism as Meraki is unconnected, and it was unaware of previous insolvencies. Edwards is now on gardening leave, while Knight continues as CFO but no longer a director or shareholder.
