I'll fight any claims that I was guilty of fraud, says former Red Sky boss Peter Cooke
Businessman is prepared to sue over 'vilification'
Published 23/07/2013 | 00:00
A former director of Red Sky has spoken of his anger after being accused of fraud in the wake of the company's collapse – and has pledged to restore his reputation.
Peter Cooke, who worked at the now defunct east Belfast construction firm before it went into administration in April 2011, said he wanted to set the record straight about its final days.
Red Sky closed in 2011 after being stripped of a multi-million pound contract with the Housing Executive amid allegations of shoddy work and overcharging.
But in his first newspaper interview, Mr Cooke has strongly rejected many of the claims.
He believes both he and Red Sky have been wrongly vilified.
"I came in as a professional to do a professional job," he said.
"I would still absolutely maintain that is what I did, and with the highest standards of ethics."
Mr Cooke has since been named on TV as "deemed to have been guilty of fraud" – an allegation he says is completely false and without foundation. He added: "This is an appalling accusation, totally without foundation, and I am taking legal advice."
Mr Cooke was brought in to Red Sky as an independent business professional in an attempt to set the company back on its feet.
He worked for two months as a consultant, and a further four months as managing director, before it went into administration in April 2011.
The move came days after the Housing Executive announced it was terminating its £8m-a-year contract with the company after allegations of unacceptable work and large-scale overcharging.
Reports have since claimed Red Sky was overcharging by six-figure sums, while the firm admitted billing for work on two housing blocks already torn down.
He said while there was evidence of overcharging and poor work it was not on the scale reported, and claimed some of the alleged duplicate charging can be explained by a pro-rata system.
Mr Cooke said that when a task – for example clearing a garden – involved more work than what could be expected, the Housing Executive maintenance manager would issue duplicate payments to ensure a fair rate for the work.
"I believe these double or pro-rata codes make up the vast majority of alleged over-claims," he said. "The stuff we did, all signed off by people in the Housing Executive, is what we were told to do. There's nothing immoral or unethical about it. It's being held up as fraudulent – it isn't."
Red Sky was also accused of overcharging for inspecting lightbulbs at demolished blocks of flats.Mr Cooke admitted it was "embarrassing and indefensible", but said the blocks were still listed on Housing Executive contract documents and insisted the Housing Executive was equally culpable for the blunder.
The Belfast Telegraph has seen an email, sent by a senior official in the Housing Executive last September, which refers to a recent inspection which found landlord lighting jobs still being issued to vacant or demolished properties. The email states this is a "heads-up warning" and urges bosses to ensure addresses are correct.
A spokesman for the Housing Executive said: "The issues raised have already been addressed during investigations prior to and in the period following the termination of the Red Sky contract.
"The Housing Executive has always accepted that some records were out of date, but that does not excuse a contractor from billing for work on properties that did not exist.
"If the Belfast Telegraph holds information which it considers the Housing Executive should give further consideration to, the Housing Executive will do so on receipt of it."
Peter Cooke was educated at Bryanston School in Dorset and Trinity College Dublin.
He worked for ICI Paints Division (Dulux) in England, returning to Northern Ireland in 1979 to join his family business Springvale EPS Ltd.
He was appointed group managing director in the 1990s, before selling Springvale to Dublin-based CRH plc in 2000.
Between 2001 and 2005 he was appointed managing director of CRH's EPS businesses across Europe.
In 2011 he was brought in as an independent in an attempt to rescue ailing Red Sky.
Transcript: Adrian Rutherford's interview with Peter Cooke
Q The perception is Red Sky was involved in poor workmanship, fraudulent claims and potentially criminal behaviour. Your view?
A If there was any criminal activity, and I knew of those allegations, I didn't find it. I can't categorically confirm if there was or wasn't, because I don't have access to everything which happened in years gone by. If I had found something improper I would have taken it to police.
Q There are consistent allegations about Red Sky botching even basic jobs. What was happening?
A The quality of work could have done with considerable improvement, as I said at the time. I am not an apologist for Red Sky and all its practices. Much work was fine, some of it wasn't. Some was quite frankly embarrassing. Despite this, Red Sky's quality of workmanship stood fair comparison with most of the other response maintenance contractors, which is not to say it was good enough. As it was low value work, the levels of supervision were historically inadequate.
Q What about claims Red Sky overcharged hundreds of thousands of pounds?
A When I arrived I was given a huge document of specific allegations where we apparently overcharged. We employed an independent surveyor to go through the records on a line-by-line basis. He examined a supposed £40,000 overcharge. It emerged that the Executive, rather than being overcharged, actually owed us £794 because we undercharged. At the same time they produced more and more of these reports, insisting on a very rapid response in enormous detail.
Q But how did huge sums of overcharging keep emerging if it wasn't happening?
A There were genuine overcharges. In cases of poor workmanship, the total value of the job was listed as an overcharge, rather than the element which wasn't correct. For example, we were asked to install a new front door. We erected it, but left a screw from a hinge which had a value of 2p or 3p. The overcharge was registered as something like £200. As soon as the allegation was made, we went back and installed the missing screw. That way there is no overcharging. There was no attempt that I could find to defraud about anything, but you could quite correctly argue the screw should have been there in the first place. It is poor workmanship, but it isn't fraud.
Q So what else was going wrong?
A In 2006-7 the Housing Executive came up with a new type of contract which contained a schedule of rates. It was supposed to cover every task which could arise, but it didn't.
Staff were told that if there was no rate for the job and none had previously been applied for, dayworks could be applied by the local maintenance manager of the Housing Executive.
That means being paid for labour and materials, up to a limit of £150. This was later revised to £500 in a memo from the Executive dated April 2007.
Q And the claims of work being charged for twice – what happened there?
A Pro-rata rates were also to be applied, under the same official written instruction, when there was an official rate but the scale of a task was out of proportion to what it would normally be.
For example, one team cuts the grass and removes rubbish from front gardens. From memory they get something like £25 per garden.
At a different address, there might be scrap cars and a tree trunk present in a front garden. The arrangement was that because the rate for cleaning the garden was inequitable the district maintenance manager was permitted to pay for two front gardens.
The second charge is effectively a duplicate payment for a garden which didn't exist. This has been cited as an example of attempted fraud or deliberate overcharging, but is simply the methodology devised and approved by the Housing Executive to pay a fair rate for a job out of proportion to its normal rate. It applied to all contractors and all districts, so why should Red Sky be vilified for following official policy as operated by the Housing Executive's own staff?
Q That doesn't explain why claims were made for inspecting lightbulbs at buildings which didn't exist?
A We were to inspect lightbulbs in external alleyways of several blocks of flats, with a fixed price of about £7 a week. In this case it appears that the Red Sky worker finds, say, five of the seven blocks, but not the other two. The worker comes back and ticks all seven off, rather than reporting the missing two. He does this every week. That should absolutely not have happened, and it is very embarrassing and wrong. The supervisor didn't pick it up because he did not inspect such low-value work, that is equally embarrassing and indefensible. But what's interesting is... that the Housing Executive did not seem to know which properties it did or didn't own.
Q You have claimed there was a vendetta against Red Sky. Why was this?
A I can't say for definite. Others have surmised that it was religious discrimination and sectarianism. It may have been, but I have no evidence of that.
Q Attention is on Red Sky's alleged DUP links. Are you a DUP voter?
A I've never voted DUP in my life. I have no prior connection with any political party here. I know one MLA socially and he is not DUP.
I had never met the First Minister, Nelson McCausland or any DUP MLA before this situation arose.