Real Business

The supposed £22 million deal for his Miss Attitude_company had always raised eyebrows in the City, and an investigation by the Manchester Evening News later discovered that £22 million was something of an overstatement. It was actually bought for £1 - and had debts of more than £1 million. Gary Klesch, who bought the business, was blunt in his appraisal. 'The business was an absolute shambles, and I mean a shambles,' he said. 'Mr Singh is a supreme self-publicist and a very naïve guy, not typical of the type of person we do business with. We have a saying in America - all show, no go - and that sums up the guy completely.'

Klesch wasn't finished there. 'He had a very fancy Mercedes but it turned out it was leased by the company and not owned by him at all. He ran around saying that I paid £55 million for Miss Attitude. Although at the time I knew it was a lie, I couldn't say anything. The deal was subject to a confidentiality clause so I could not say a word. But as he has abused the confidentiality clause, I feel I should tell the truth. If he denies that I bought the company for a pound, let him sue me for libel and a judge can decide who's right. The only reason I bought the company was for its High Street sites.'

At the time, perhaps wisely, Singh declined to comment.

This was not the last of Singh's many business ventures to hit the buffers. His health food business, Robson & Steinberg, went bust owing more than £250,000 after trading for less than a year. One company owed money by Singh said, 'There was always a new excuse. They said that the accounts department was in a different building.' Singh brushed off the difficulties, and supporters said it was part and parcel of being a successful serial entrepreneur: some you win, some you do not. Meanwhile Singh ploughed on. He was soon being referred to as the owner of the Reuben Singh Group of Companies, an organization consisting of 12 trading entities involved in a variety of sectors, from currency trading to property, to retail and construction. Yet newspaper investigations at Companies House found no evidence this corporate entity even existed. Of the seven directorships he was supposed to have held, five of the firms had never filed accounts and the two that had only showed net assets of £1,000 and £100 respectively. Curiouser and curiouser.

It is surprising that the normally sceptical and ever-resourceful British press had allowed such blatant bragging and showmanship to go unchallenged for so long. Then, once the clear fabrications and anomalies came to light, it is equally surprising that no one really pursued them to any great extent. Singh was undaunted by the negative headlines, and they were either dismissed by friends and associates as petty jealousy, or the rather more serious accusation was made that the criticism had racist undertones. Of course it was neither.
But the real trouble had not even started. It did once Singh's parents decided to call in a loan they had made to him. At this point the Bank of Scotland demanded the £1 million-odd it had loaned Singh. He did not have it, but how he came to secure such a big loan from the bank is a tale worth retelling.

It turns out that on one occasion, Singh took the banker handling his account in a chauffeur-driven Mercedes, complete with television in the back, to the Lowry hotel, Manchester, where the banker was treated to the hotel's specially printed 'Reuben Singh menu'. For another meeting Singh had decorated his office with press cuttings about his business successes, including a picture of him meeting best friend Tony Blair, to impress the bank representatives. It worked! A Bank of Scotland employee later admitted he had relied on the press articles in making his decision about Singh.

It was around this point that Singh crossed the blurred line between entrepreneurial showmanship and self-confidence, and misrepresentation. People tend to buy from people or companies that know what they are doing. Entrepreneurs, as a breed, are more aware of this than your average Joe, so naturally they exploit it. But at what point this exploitation goes beyond confidence and boastful showmanship into lying and fraud is open to question.

With the bank now demanding its money back, Singh faced a court appearance, and the full extent - or rather limit - of his business prowess soon came to light. It was not pretty. On 30 October 2007, Manchester County Court judge Michael Kershaw said Singh had deceived the bank to procure the loan. He accepted that Singh had also invented a bank account in Bermuda to help maintain the impression of immense personal wealth.

Details of Singh's financial affairs were laid bare. He owed his father Sarabjit £778,813, and had fallen £12,000 behind in payments for one of his cars. He had also run up debts of around £140,000 on nine credit cards, owed the Inland Revenue £32,500 for a penalty payment and had yet to settle a HM Customs & Excise bill for £60,000. The largest part of Singh's debt was £9 million he owed to a Kuwaiti business, Badr ITK General Trading Company.

In summing up, Judge Kershaw was scathing. 'Mr Singh deliberately and flagrantly deceived the bank about the extent of his personal wealth and ability to honour a guarantee if necessary from cash or realizable securities in the UK,' he said. 'He also liked to keep his own staff in awe of him and in ignorance of the truth of his past and present business activities.' Referring to the former bank employee who had agreed the overdraft with Singh, the judge said the banker was 'to some extent a victim of Mr Singh's personality as well as Mr Singh's lies'.

Singh was declared bankrupt at Manchester County Court with debts estimated at more than £11 million. It was only once the details of the financial arrangements started leaking out that the full picture started to emerge. Accounts from AlldayPA, published in 2003, showed losses of £115,000, debts of £2 million and a £2.6 million payment to Singh that auditors could not account for. On 7 November AlldayPA issued a debenture to Mr and Mrs Singh giving them a claim over an undetermined amount of money from the company. In 2004 Singh, as sole shareholder of ADP Call Centres, decided to increase the capital of the company by issuing more shares. Around 8,000 of these were allocated to Singh's parents, with another 2,000-odd granted to GNDJ Venture Capital Fund of Ontario, Canada, also owned by the Singh family.

Ultimately AlldayPA went into administration, and Singh's parents then bought the company from its receivers. They then installed their own management team at the Salford company, with Reuben reduced to serving as a 'consultant' or 'non-executive chairman'. Speaking at the time, Sarabjit Singh's solicitor said that Reuben 'does not wish to be involved in its day-to-day administration'. He was well and truly on the naughty step.

It is questionable to what extent Singh really was an entrepreneur. For one, he does not appear to have ever made any money. And he seems to have preferred to hang on to the coat tails of his family. Yet they could not save him. The downfall was complete. The press, once so full of praise, were vitriolic. They said Singh was 'exposed as a charlatan' and that he 'proved himself to be a brilliant self-publicist'. 'Singh has managed to convince the business establishment, the Blair administration and the world's financial press into believing he is a multi-millionaire,' exclaimed the Mail on Sunday newspaper. 'In reality, he is little more than a fantasist.'

There is a common complaint in the United Kingdom that the British media 'build people up and knock them down'. It is something people would recognize in many countries. But it is an over-simplification, and glosses over the fact that the vast majority of the people who receive positive press coverage work extremely hard to get it, employing batteries of eager public relations executives to generate the headlines and features.

The press do not seek out random business people and build them up, yet entrepreneurs like Singh, caught out and found out, do not appear to appreciate that the media are a double-edged sword. They are looking for stories, headlines and angles. If someone new comes along, someone young, Sikh, successful, wealthy, it is little wonder the press trip over themselves to put that face on their covers. But it comes at a cost. As soon as business people court the media, they need to watch out. And if they're up to no good, they should not court it at all.

How They Blew It, by Jamie Oliver and Tony Goodwin, is published by Kogan Page. We don't normally drool about business books, but this one's a corker....