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Supermarket Sainsbury’s, private equity group Macquarie and the Bank of England are among the organisations affected by hundreds of “erroneous” filings at the UK’s corporate register.
The documents relate to 190 companies and all purport to have been submitted to Companies House by the same individual, according to information sent by bankers’ trade group UK Finance to its members and seen by the Financial Times.
The roughly 800 filings made last month appear to show that property owned by the companies has been released from charges granted to banks in return for lending money, meaning the lender would no longer be entitled to take possession of these assets in case of failure to repay.
The paperwork was submitted without the knowledge of the companies or lenders affected, according to people with knowledge of the matter.
The saga raises more questions about the quality of information at Companies House and the ease with which it can be manipulated. Both “Jesus Holy Christ” and “Donald Duck” have previously been named as company directors on the register.
Companies House on Monday embarked on an ambitious reform plan as new regulations came into effect under the Economic Crime and Corporate Transparency Act. These include greater powers to request evidence from individuals and their companies and remove factually inaccurate information from the corporate register.
In a statement about the new powers, Companies House and the business department said their priority was “cleansing the register”.
Graham Barrow, a financial crime expert, who has described the changes at Companies House as “seismic”, said the erroneous filings were “symptomatic of an organisation that is not fit for the 21st century and is now looking to drag itself into the 21st century by its bootstraps but without the necessary financial and human resources to do so”.
The Bank of Scotland, estate agent Knight Frank and hospitality groups Nero Coffee Roasting, Ask and Zizzi Restaurants were among the borrowers affected, according to a list sent by Companies House and shared by UK Finance.
Some of the UK’s biggest lenders are on alert over the issue, including NatWest, Lloyds Banking Group and Barclays. The Bank of England is named as security trustee on at least one of the affected charges.
Many of the filings include the details of a single individual with an address in County Fermanagh in Northern Ireland. The person could not be reached by phone on Monday.
In two notes to members last week, which were first reported by Sky News, UK Finance warned banks about the “apparently erroneous” filings. It said these had been flagged by more than one lender and a number of law firms, and that they “appear to be random” and had been submitted electronically
“Companies House have emphasised that an incorrect entry in the register — saying a charge has been satisfied — does not invalidate or cancel that charge,” UK Finance wrote. But it added that “there will likely be other consequences for lenders that will need to be resolved”.
But Neil Riley, a finance lawyer at DLA Piper pointed out that lenders rely on the registration of charges at Companies House to make sure they rank ahead of a company’s other creditors.
“It is very serious for lenders because you need to know that your security is properly registered so the whole world can see it,” he said.
“If you’ve got honest borrowers and lenders . . . it should be fixed in time [to avoid problems],” he added. “It only really becomes a problem when the borrower is in the process of borrowing more money and nobody really knows that these charges have been marked as satisfied.”
There is no suggestion of wrongdoing by the companies or lenders affected.
Companies House said on Monday that it was investigating and had launched an “urgent review” of its processes after identifying the filings concerned.
“We have taken steps to block the account that is linked with these transactions and, using new powers available to us, will remove the related filings,” it said, adding that it was working with law enforcement “where appropriate”.
The business department did not immediately respond to a request for comment.
