THE FORMER managing director of Scottish plant hirer APC has been jailed for four years, bringing to a close one of the most notorious incidents in recent plant hire history.
Liz Clow, 52, was found guilty of deliberately mis-stating profits in order to obtain bank loans from the Royal Bank of Scotland between 1997 and 1998. When APC collapsed in 1998, RBS was owed £13.2 million.
APC expanded rapidly in the late 1990s after being awarded contracts on the extension of the M6/A74, but fell into receivership equally rapidly when it could not raise the cash to pay for its leased equipment f leet.
Despite having turnover of £40 million, it failed with debts of £30 million, leaving a number of creditors out of pocket, including a host of smaller hire firms who had been subcontracted onto the M6 job.
These hirers brought work on the M6 to a halt after hearing of APC's collapse, and work only restarted when the main contractor agreed to pay them directly.
APC was closed in December 1998 after shedding 500 jobs.
Creditors and rivals accused the firm both of extravagant spending and of winning work by bidding too cheaply.
The receiver KPMG was highly critical of APC's accounting and management. Joint receiver Blair Nimmo referred in his report to 'imprudent and incorrect accounting policies'.
Mr Nimmo concluded: 'In general the rapid growth of APC required strong controls over key areas of trading, such as cash, fixed assets, plant utilisation, costing and accounting. These controls were simply not in place or were totally inadequate.'
But many in Scotland were critical of the bank's role in backing Ms Clow in the first place. APC was set up in 1995 after RBS and 3i funded MS Clow with £16.5 million to buy Adam Bruce Plant Hire, where she was formerly company secretary, out of administration.
Adam Bruce, who now runs plant firm AB2000, and whose business lost around £2 million to APC told Construction News: 'The banks have to take some responsibility. Liz Clow has been rightly jailed for her part, but RBS got everything they asked for, because they backed her, saying she could run the business better than I could.
'They couldn't see she was a con woman and they got a bloody nose for it.
But the people we should feel sorry for are the small creditors, some of whom lost everything.'