The Premium Credit Fraud

I was brought up in a world where one does take responsibility for one’s own actions and, if a mistake has been made, you own up to them and take the consequences.

In my world, not the world now, you do not frame someone for something that they never did or corruptly cover it up

An example of what I am like was when I uncovered the big fraud.

In order to keep my ear to the ground, at times, I would visit the divisional managing directors for a chat and a coffee behind closed doors. During these chats, I discovered that one of them, an attractive and very capable lady, had been inappropriately propositioned by her boss, for which she could have claimed sexual harassment and got that person removed.

However, she wanted to protect her job and career and made no complaint against him. Without her agreement, I could not pursue it further.

I also knew of certain relationships that I deemed inappropriate but there were just whispers and I had no evidence.

But during one of my chats with the divisional managing director of the corporate division, a nice chap called Nick Pearce, he said that he had uncovered huge bad debts not accounted for. He could have gone directly to the Chairman but he was fearful of losing his job and so he told me; he knew that I would have no choice but to report it as he was well aware of my strong ethical and professional background. He basically put me on the spot because he was too scared to “blow the whistle”.

I returned to my office, asked for a coffee and then shut the door, asking not to be disturbed, all calls diverted; I needed time to think, this was big. I had to try and work out what were the probabilities of each scenario, knowing damn well the family relationship in the firm would make all of the difference.

I knew who I had to tell; my boss, Leon Stoffberg but what would his reaction be? He could do one of many things:

  • Do nothing
  • Sack me on the spot and cover it up
  • Sack me, using me as a fall guy and report it to the outside investors
  • Sack his brother-in-law
  • or many other permutations

My moral and ethical duty was clear; regardless of the consequences to me, I had to just tell Leon what I knew.

I think I must have disappeared for a short while to have some cigarettes but on my return, I checked that Leon was free and not with anyone, asked his PA Ann Holland to hold all of Leon’s call’s, knocked on the door and then shut it behind me, sitting down in front of my boss. To say that I was “bricking myself” was an understatement.

I told him that I had some very worrying news; I didn’t tell him that Nick Pearce had given me the information but just said that I had uncovered it. If anyone was going to be sacked, it had better just be me.

I said that I had uncovered a high incidence of bad debt from the Corporate division and it was being covered up under the instructions of Mike Cobb, his brother-in-law, who was just across the hall.

I told him that it ran into millions and that I was very concerned about the stability of the company.

Once I had stopped speaking, he thought for a moment and then asked if my information was accurate, following that by “you had better be right“. His threat was well understood.

To his credit, he didn’t sack me on the spot but just said “Do nothing and say nothing, to anyone until I heard from him

I then left and returned to my office and shut the door. I knew pretty well what was going to happen next.

After about 15 minutes, Leon walked straight into Mike’s office and shut the door. From where my own office was situated, I could see everything; I was equidistant between both their offices.

Try as I might, I could not work out what was going on, pretending to go to the loo etc and just returned to try and work although my mind was solely on what was clearly about to happen.

Leon left after about half an hour, maybe less and returned to his office and shut the door. Then my phone rang and it was Mike. He wanted to see me “NOW” and I had to drop whatever I was doing.

I entered his office to see a very red faced and clearly angry man glaring at me. He said what did the “F##k” I think I was doing. If I had any beef with him, I should have gone to him and not to Leon to sort it out.

I retorted, nearly shouting at him, by saying that it was my job, my responsibility and my career and that I didn’t have to justify myself to him, only to my boss, his brother-in-law, Leon. Mike was, after all, a bully and you have to stand up to bullies otherwise they will walk straight over you. He was only a bully because his brother-in-law was the Chairman.

I cannot even remember what time of day this was but I know that nothing more was done that day. I didn’t work late, as was my norm, but drove home, stopping off at my parents. I asked to have a chat with Dad and did they have any whisky?

I then told him everything that I had told Leon. You may ask why I went to see him.

That is easy.

Premium Credit was my father’s baby. The idea was discussed over a snooker game with my good and late friend, Derek Whittick, my Dad and Leon Stoffberg.

Leon proposed the idea and asked if my father would put it into practice. Leon knew very well that my father was well known and highly respected in the city and after starting a finance company from scratch, under the wings of GUS, he knew that with my father’s experience and contacts, he was the ONLY man for the job.

So, my father created Premium Credit, this time under the wings of HSBC, as you needed a cheap line of finance. Premium Credit bloomed and by the time I got to the company, my father was on the cusp of retirement for the second time.

Anyone suggesting nepotism are very wrong. My father may have suggested me but he then rightfully took a back seat and disassociated himself from the process. The decision to employ me or not was with the late Colin Ringrose (who voted against me joining, but later admitted that he had been very wrong), Mike Cobb and the Chairman, Leon Stoffberg, who would have the final say. So that kicks any allegations of nepotism into touch.

As my father had built up the company, the family had a significant financial interest and any thoughts of sizeable bad debts would have seriously dented the value of the investment.


I told him that I did not know what Leon would do but that I was sworn to silence until he instructed me otherwise.

As it turns out, Leon called my father and asked him to carry out an internal audit, to see how bad the situation was. I cannot even remember how long Dad took to complete the work but I knew this:

  • The unrecorded bad debts went into tens of millions
  • It was confirmed that Mike Cobb had done that to ensure that his incentives were maintained and to pretend that he was in control of his division
  • The recommendation was that Mike Cobb should be removed from post immediately. This had been a serious breach of trust and, as importantly, a breach of trust between the founding directors. (He was not actually a founding director but because of the family relationship, was always considered one)

The reason for fudging the figures was obvious but it just showed that my father had been right all along. Cobb was no businessman at all; he just pretended to be but, because of Leon’s sister, that was all overlooked.

So, what happened?

  • Thankfully, I kept my job, much to Leon’s credit; he stood by me.
  • Mike Cobb was never sacked because of the grief that Leon would have got from his sister, much to my disgust
  • I was forbidden to talk about this to anyone outside the business, as it was my duty to ensure that I kept the investors and bankers appraised of all developments; that was part of my role anyway
  • By collusion with the company’s auditors, KPMG, a way was devised to write the bad debts off over time, a long time

I felt severely let down by Leon, my boss. I had literally put my career on the line and because of a family relationship, the perpetrator never suffered for his crimes.

If it had been me or anyone else, we would have been sacked on the spot and literally walked out of the door.


Leon, that was shameful

As to the sexual harassment of one of my lady colleagues? I will not reveal her name but the person who sexually harassed her was….




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