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Simon Morris: Innocent - but cast out like a leper

1 June 2010

Yorkshire Post - 03 June 2010

Former Leeds United director Simon Morris had it all - a multi-million pound fortune and a property empire. Then it collapsed amid allegations of fraud and he found himself bankrupt. Now he has spoken about his fall for the first time.

EVERYBODY had known him, and suddenly nobody wanted to.

Simon Morris was one of the most visible and successful young businessmen not just in Yorkshire but anywhere in the country, a whizz-kid with the Midas touch who built a huge property empire that made him one of Britain's wealthiest men, rich enough to be at the heart of a takeover of Leeds United.

And then it all went wrong. His business collapsed, he found himself at the centre of a Serious Fraud Office (SFO) investigation, and bankruptcy followed. From being a man people wanted to meet, Mr Morris found them turning away, not only from himself, but his family, wife Helen and their three children, two daughters, aged seven and three and a son, two.

"I had a very small circle of friends and people around the periphery wouldn't come out for dinner with me or let the kids play together. They shunned us like we were second-class citizens, there were very few people who stuck by and said, 'We don't care, we'll wait and see what happens with this investigation', 99 per cent of people ran off."

At 33, Mr Morris has already known enough highs and lows to last a long lifetime. The latest instalment in an extraordinary career came last week, when the SFO announced that it was ending a three-year investigation into his affairs, on the grounds of insufficient evidence, over allegations that his company had sold buy-to-let properties at inflated prices that left buyers unable to cover mortgage payments out of rental income, accusations that Mr Morris has steadfastly denied.

His rise to the top had been spectacular. The ex-Leeds Grammar School boy dropped out of a law degree course to go into business, selling coats on a market stall, which rapidly gave way to bricks and mortar as he bought his first flat, refurbished it and sold it at a profit. That pointed the way to a business specialising at first in properties for students and young professionals. The company went on to develop 20/20 House - a £36m residential scheme in the centre of Leeds - and as property prices in the city soared, so did Mr Morris's fortunes.

By 2006, his company's turnover was more than £80m and it moved into a purpose-built £8m headquarters in Brewery Wharf. Success also brought him a newly-built luxury home in the affluent village of Scarcroft, north of Leeds.

By the age of 30, Mr Morris had amassed a fortune estimated at £69m and was number eight on the Sunday Times Young Rich List, missing out on inclusion in the main list by £1m.

It all started to fall away in the autumn of 2007 with a BBC Panorama documentary, which examined claims by investors that they had paid too much for properties, the price of which had been inflated with the collusion of valuers.

Mr Morris, who is represented by the West Yorkshire-based Rahman Ravelli Solicitors, who specialise in fraud and business crime, believes the publicity wrecked his reputation and led directly to his downfall.

"Our stakeholders, our banks, withdrew from our business. That same week we lost two financing facilities, which were circa £50m in cash. It looked bad to everyone else, because if your main stakeholders, your main lawyers and your main accounts are dropping you, you're guilty straight away.

October 2007 was a real hard time for us because we lost our lawyers, lost our accountants and lost support from the banks, so that next 12 months we were scrambling away just to stabilise the business, because as soon as we were getting any cash in, the banks wanted it back.

"Which meant we had to make over 80 people redundant in a four-month period, some people who had been employed by the business for several years."

Mr Morris said the withdrawal of support by banks could have been coped with - but then they demanded their loans back. "The business was fine. We were still trading, even if we didn't sell a lot of property, we were bringing so much rent in, it was more than covering our obligations to the banks. We had a £100m portfolio and a £50m debt, we were fine. It wasn't the fact that we couldn't pay the interest, the banks wanted the money back, they wanted repaying, and we had loans which were rolling on and, in the normal course of business all they want is their interest or a nominal repayment, you continue to grow your portfolio. They wanted it all back straight away, because we were a reputational risk because we'd been on the television. We were alleged fraudsters and that was what made the business collapse."

A key plank of the SFO investigation was into the company's paying of customers' deposits on properties, a practice Mr Morris said was commonplace. "It was an incentive scheme that was being performed by everybody else in the industry and still is being performed now, it's nothing unusual, and they were saying the prices of our properties were high. Before we purchased a development or marketed a house, we'd have ensured we'd done our due diligence and had a number of valuers visit that property and gone for the one that gave us the best price, as any developer would do because were in it to make profit. The police interviewed dozens of valuers from dozens of companies and this conspiracy that had been alleged didn't exist. We'd done what every other developer had done, which was to sell the properties at the best price that we could."

He believes his profile, and status as an independent businessman, made him an easy target for investigation.

"I was fairly naive when I started off in business and what I did was raise my profile to such a level with the involvement in Leeds United, the Rich List, I was a much more identifiable candidate to shake a stick at than the big faceless corporations, who were doing exactly the same thing on a much bigger scale.

"A PLC that's a lot more established is going to kick up a big fuss and plus it's very difficult to pin it on anybody in particular. With myself, a management team of three or four people, we were a soft target, we were a medium-size company and it was a great story."

Mr Morris has not yet decided if he will pursue legal action over the investigation. His solicitor, Aziz Rahman, said: "We are now looking back very carefully at the investigation and the way it was conducted. Only when we have concluded that review can we decide what steps – if any – we should take."

A key consequence of the investigation was that nobody would do business with Mr Morris. "I'm born and bred in Leeds, I've been involved with Leeds United, so a lot of people know my face, and because of the way things were reported, people assumed I was guilty until proven innocent, so from a business perspective it was incredibly difficult to get anybody to take me seriously, because while this investigation was going on and shadowing me, it was like I was a leper, nobody would have any dealings with me because they were frightened they would get investigated as well.

"It left me very isolated. I'd built a lot of relationships, made people very wealthy, educated them in the way of business, and was left completely high and dry. I didn't have a social network, didn't have a business network, didn't have any money."

Mr Morris, who is awaiting trial on a charge of conspiracy to blackmail, is now considering his future. "I'm going to have to deal with my bankruptcy issue because it has another three or four months to run, and I would hope that I would be able to rebuild a business in something that I would enjoy doing, which is probably property."

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