Learn Direct

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Kernow Yellow
Grumpy old git
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Learn Direct

Post by Kernow Yellow » Wed Aug 16, 2017 3:00 pm

I see that Myles has started an interesting thread over in The Other Place about Darryl Eales' links to Learn Direct, which is currently in the news.

I can't say I understand what's going on, other than that:

- Learn Direct tried to suppress a bad Ofsted report, but have ultimately failed to do so;
- And questions are being asked about the company's finances. It's not clear whether that's linked to the Ofsted report or the result of separate investigative journalism

It's also not clear what exactly Darryl Eales has to do with any of this, but it is interesting that he's the ONLY individual mentioned in this Guardian article about the situation:

"[...]Learndirect’s profit after tax dwindled from £10m in 2012 to just £1.6m in the year to July 2015, the most recent period for which figures are available, despite revenues surging from £134m to £171m.

At the same time, Learndirect’s parent companies, Pimco (Holdings) and Pimco 2909 paid out tens of millions of pounds in management fees, dividends and interest payments.

Pimco 2909’s outgoings in 2012 include the £500,000 sponsorship of the Marussia Formula One motor-racing team, chaired by Darryl Eales, who was a Pimco 2909 board member and former chief executive of LDC. LDC is the private equity arm of Lloyds and is the ultimate owner of Pimco (Holdings) and Pimco 2909.

Learndirect was launched by the government as a charity and taken private by LDC in 2011. At that point it had no borrowings but the group of companies is now heavily laden with debt.

The group had nearly £96m of debts due for repayment after one year, including £44m to Lloyds Development Capital. That compares to £85m of assets, of which £71m is marked as “goodwill” – essentially notional value rather than tangible assets."


Anyone know whether this is likely to be problematic for our chairman?

Kairdiff Exile
Dashing young thing
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Re: Learn Direct

Post by Kairdiff Exile » Wed Aug 16, 2017 6:20 pm

There's a decent thread on the subject at the Other Place which (so far) hasn't descended into the usual name-calling*. At the very least, one would have to say that Eales appears to have questions to answer on the issue.

My hot take is that no-one who makes the sort of money that Eales has at his disposal does it 100% ethically. Ka$$am didn't (how he made his initial money is well documented), WPL didn't (remember the links with mining companies in Guinea?) and Eales probably hasn't either. Now, I don't have a problem with that per se; it's their money, not mine, and they have their own consciences to live with.

What DOES concern me is that if Eales was prepared to shaft LearnDirect etc for his own ends when it suited him, it's not inconceivable that he'd be prepared to shaft OUFC when it suited him. And given how reliant we are on his backing, that's not a great position to be in.

*UPDATE: normal service has resumed and it has now descended into the usual name-calling.

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Re: Learn Direct

Post by theox » Thu Aug 17, 2017 9:19 am

http://www.thisismoney.co.uk/money/comm ... iasco.html

Says here that Eales could face questions over why the company spent 84 per cent of its mostly taxpayer-provided income on payments to managers and financiers.

The brief article makes an unfavourable comparison to Maxwell!

Edit, In other Eales news, it is denied that he is taking over Solihull Moors - http://www.thenonleaguefootballpaper.co ... s-meeting/

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Re: Learn Direct

Post by OtmoorYellow » Thu Aug 17, 2017 1:12 pm

There needs to be some very careful use of language on this subject. Questioning ethics, linking issues without holding all the relevant information, making assumptions and so on is not sensible.

The references made in the article to dividends being paid for example, as if that was a bad thing, rather than a normal event in a private company, and linking it with management fees and interest paid (both of which may well be perfectly reasonable) as if there has been some underhand goings on is really not clever.

Interest is paid to reward lenders for use of their capital. And there is nothing wrong with that.
Dividends are paid to reward shareholders for their investment. And there is nothing wrong with that.
Management fees are often paid in lieu of salaries and other costs incurred by another company. And there is nothing wrong with that.

Whilst educational achievements are obviously very important for the students involved, the important question is why did a charitable organisation need to be taken over by venture capitalists? This would normally be because the charity was unable to support itself. If that were the case, and there is no reason at present to assume otherwise, that might well explain poor Ofsted ratings and the need for investment.

Investment does not come for free.

Was it the case that this was a failing educational establishment that rather than risk bankruptcy and the severe knock on effects on the students, chose to seek investment instead of charitable donations, in order to survive?

It is easy to jump to cynical conclusions.

I'm not saying there aren't questions that need clarity, but I am saying that the issues highlighted in this thread could easily be perfectly normal and reasonable in the circumstances.

Kairdiff Exile
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Re: Learn Direct

Post by Kairdiff Exile » Fri Mar 02, 2018 10:27 am

Now Eales has a less prominent role at the club, it's probably of little importance, but Westminster's Public Accounts Committee have today published the report of their inquiry into what went wrong at LearnDirect. Our former owner isn't mentioned by name, and was not amongst those who gave evidence.

The full report can be found here, but if you just want to read the (rather damning) conclusions and recommendations, they can be found here.

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