PETTY'S BUSINESS FAILURES: THE FACTS; EXCLUSIVE: New Swansea buyer and the companies that went under.
THE man who bought Swansea City football club for pounds 1 has a history of business failures but says, "I'm no asset stripper".
Tony Petty promised to bring the glory days back to the Vetch when he took possession of the club last month.
But he caused uproar when he immediately sacked seven players and told another eight he intended to dramatically reduce their wages.
Today we can disclose details of Mr Petty's business background that suggest he may not be the saviour Swansea fans are looking for.
Documents lodged at Companies House in London show that Mr Petty was involved in a variety of businesses in the Home Counties during the Eighties and Nineties.
His interests included a supplier of wholesale stationery, a travel agency, and two building contractors.
One of the building contractors - SOS Construction - crashed in April 1994 with debts of more than pounds 1m. It had begun trading less than three years before in August 1991, largely doing building maintenance contracts for local authorities.
The company's shares were owned by Mr Petty, who at the time lived in Bexley, Kent, and his brother-in-law John Hayes. They employed a direct staff of 14 with a workforce of around 80 permanent sub-contractors.
A profit of pounds 75,000 was made during the 12 months to April 1993 on a turnover of pounds 1.9m.
But the firm ran up losses of pounds 586,000 during the remaining eight months of that year.
A report to a creditors meeting in April 1994 attributed the losses to late or disputed payments from certain large employers, diminishing margins on contract work and losses on setting up a depot at Mitcham, Surrey.
In January 1994 the directors put forward a rescue plan that would have involved Mr Petty putting in pounds 150,000 for extra shares in the company. The cash would have been used to compensate trade creditors at a rate of 25p in the pound within 60 days.
Preferential creditors like Lloyds Bank would have been paid off at the rate of 50p in the pound over 10 months.
But the deal was turned down by the bank, which put the company into administrative receivership.
In March 1994 the company was estimated to have a total deficiency (debts minus assets) of pounds 610,000.
This, however, turned out to be based on an optimistic valuation of the firm's assets by the directors.
They claimed the assets were worth pounds 400,000, while quantity surveyors employed by the administrators valued them at pounds 250,000.
In the event, by December 1994 the estimated deficiency had risen to pounds 1,185,000. Of this, pounds 315,000 was owed to the Inland Revenue, a further pounds 99,000 was owed in VAT debts and the total owed to nearly 400 trade creditors was pounds 676,000.
The company was formally wound up in December 1995.
But Mr Petty and his fellow director did not simply walk away from SOS Construction. A report filed by the administrators to Companies House shows that they paid pounds 12,000 to take the business over as a going concern without being hampered by its debts.
The shares of the new firm - called SOS Construction (Southern) PLC were allotted to Mr Petty's brother-in-law John Hayes and to a nominee company based in the British Virgin Islands, a Caribbean tax haven.
Whatever plans Mr Petty and Mr Hayes had for this new company seem to have come to nought, for it too was wound up in September 1995. Its liquidator reported to Companies House in May this year that it had a credit balance of pounds 2,042.48.
Another of Mr Petty's companies, Trailgrove Ltd, was a travel agency based in Dartford, Kent trading as Hollymans Travel. A liquidator was appointed in March 1994 at which time it had an estimated deficiency of pounds 234,325.
A fourth Petty company - a stationery wholesale suppliers called SOS Paper - went into liquidation in April 1993 with an estimated deficiency of pounds 472,449.
It had 72 listed creditors, including Charlton Athletic FC which was owed pounds 3,240.65. Ironically, Mr Petty trumpeted his former involvement with Charlton at the time he bought Swansea City.
Another intriguing fact thrown up by Companies House documents is that the liquidator of SOS Paper was one John Colin Shuttleworth, who at that time was working as an insolvency practitioner. Last month the same Mr Shuttleworth was appointed chief executive of Swansea City by Mr Petty.
Yet another Petty company - SOS Holdings Ltd - was wound up by the High Court in London in December 1994 after a petition by a trade creditor, Jecko Paper Ltd. Details of its debts have not been filed at Companies House by the Official Receiver.
The circumstances under which Mr Petty became a director of QED Display Ltd are different.
As outlined in a further document filed at Companies House, QED was a light manufacturing firm supplying point-of-sale display equipment to the retail industry.
It rented premises at Loughborough Junction, South London from a company called Axis Europe Developments, of which Mr Petty was a director.
When QED got into financial difficulties in 1997 and was unable to pay its rent, Axis Europe seized a large portion of QED's stock, took a controlling stake in the company and put Mr Petty on the board.
Within weeks the conclusion was reached that QED's position was "highly untenable" and its remaining employees were made redundant.
A report by accountants Arthur Andersen states: "Tony Petty requested that the Bank appoint administrative receivers on January 27 1998.
"QED owned the freehold of Unit 4 at the Higgs Industrial Estate.
Following a valuation by our property agents, we invited offers to be made by various interested parties.
"Having considered all the offers, we sold the freehold interest to Axis on April 3 1998."
Much of QED's assets had been stolen from the premises in three separate burglaries, but the remainder of QED's plant, machinery and stock were also sold to Axis on the same date.
'Some think I'm an asset stripper, but if the club went under there would be nothing for me' SAYS PETTY TONY Petty maintained that his past business failures were completely irrelevant to his role as the new owner of Swansea City.
In a frank interview with Wales on Sunday, he said: "Sure I've had failures. Tell me a businessman that hasn't.
"Ask Richard Branson how many times he's been in trouble. I lost my home in Bexley. Do you think it gives me and my family any pleasure to read about how it was repossessed from me?
"Having a go at me doesn't help Swansea and it doesn't alter the fact that I own 99 per cent of the club's shares.
"Look at when the companies I was involved with went bust. It was in the middle of a recession and a rough time for everybody in business.
"SOS Construction went down because a firm we had a contract with knocked us for around pounds 170,000.
"We bought the assets - which were basically the contracts - from the receiver and carried on the business under another name. Eventually we decided to use another firm, SOS Communications, as the vehicle for the business, so we shut down SOS Construction (South-ern). It didn't owe anything.
"Afterwards we had a name change and SOS Communications became Axis Europe, which remains a successful company with 100odd employees and a turnover of pounds 20m.
"Axis was the landlord of QED Display and we had some trouble with them when they got into difficulties. They were trying to put us into a creditors' voluntary arrangement (which would have decreased the chance of Axis being repaid), but that wasn't right because we were the landlords.
"We took over what assets QED had and incorporated them into our business. They were already in trouble before we had anything to do with them."
He said he still hoped to turn Swansea around.
"When I took over four weeks ago the club had debts of pounds 700,000. Now that's down to pounds 350,000.
"I didn't realise the full extent of the club's difficulties when I took over.
"On a gate of 3,500 for a home match we net about pounds 11,000.
We're lucky if that pays the wages of half the team. One player gets paid pounds 2,500 a week plus bonuses - heaven forbid that he scores.
"The trouble is that the contracts the players were given are nearer First Division wages than Third Division.
"Some people think I'm an asset stripper, but if the club went under there would be nothing for me. The players would be free agents and could walk away.
"I went to Australia three years ago because I was pretty fed up with the business world in Britain.
"I've loved football since I was a child and bought a club called Gold Coast City. When I bought it the club was in a bad way - they'd played seven or eight games and were second from bottom in the state league.
"After I took over they played 27 games and only lost two.
They were runners up in the league, below the champions only on goal difference. And they won the Queensland Cup.
"Then I gave the club away to one of the smaller clubs on the Gold Coast that had the finances to develop it.
"I did that in the space of eight or nine months.
"It's not true that I've got no connection with Wales. My wife's sister lives in Neath. I've been coming to Wales for 20 years.
"After three years in Australia my batteries have been recharged, but I never thought I'd get as much crap as I've had since taking over Swansea."
MP calls for league inquiry PLAID Cymru Euro MP Eurig Wyn says he will call on the Football League to investigate Tony Petty's business background.
Mr Wyn, who was born in Pembrokeshire and has supported Swansea City since he was six, said: "I shall be writing to the Football League, asking whether they consider Mr Petty to be an appropriate person to run a football club."
Mr Wyn is one of several politicians to have joined an 1100-strong trust set up by supporters to safeguard the interests of the club.
Trust spokeswoman Marilyn Croft said: "We have deep concern that a person with Mr Petty's background is in charge of the club.
"In my view t does not augur well for the future."
TONY PETTY: 'Of course I've had business failures' CONCERN: Eurig Wyn