Bristol-based Ikon Construction is blaming an ongoing criminal and HSE investigation into a work site death for its collapse. The company ceased trading and has eliminated 50 jobs as a result.
The company first opened its doors in 2001 with the help of founders and directors Steve Chant and Pete Hargreaves. The organization specialized in commercial, industrial and factory building projects in the south of England.
Ikon said “uncertainty” regarding the investigations resulted in the company not being able to secure performance bonds for ongoing contract work, totaling £25m, it had won and started. Clients use performance bonds as a type of insurance against risk of a contractor failing to fulfill contract obligations.
The investigation surrounds the death of Luke Allen, who was killed after falling through a roof while working for subcontractor in Bristol. Ikon was the main contractor on the student apartment project.
In August 2017, Ikon was fined £145,000 for health and safety violations during the construction of nine townhouses in Somerset, England.
The company went under in May after a number of problem contracts, which led to a loss in the 2018 financial year. The company’s collapse was also partly due to losses on a commercial contract, poorly priced residential projects and mismanagement of contracts.
Prior to these issues, the company was flourishing. Turnover and profits had grown from £9m and £395,000 respectively to £37m and £925,000 between 2014 and 2016.
Companies House documents show that Ikon owed £9.1m to more than 540 trade creditors at the time of its collapse. This figure included £2.5m in unpaid retentions to the company’s suppliers.
Some former suppliers claim that Ikon paid some creditors ahead of others ahead of the insolvency, which violates insolvency law. The administrator is now investigating who the company paid ahead of its collapse.
In the weeks before insolvency, Chant and Hargreaves set up a new business called Spec Projects Ltd. A number of Ikon’s former contracts have been moved to the company. Spec Projects has agreed to pay the administrator £120,000 to take over the work as part of a side agreement.
Spec Projects also made a deal to purchase all of Ikon’s machinery and plant as well as its office furniture for more than £100,000.
It was alleged that the directors of Ikon had purchased luxury vehicles with company money, but an investigation revealed that the vehicles were purchased with the directors’ own funds.
