Monday 4 June 2018

Steamship Company Shareholders get concerned about the costs of the Mali Rose

Letter from Steamship Company shareholders to:

Andrew Allen BSc FCA
Partner, PKF Francis Clark
Truro, Cornwall

Telephone: 01872 276477

May 2018 

Dear Mr Allen,

We are shareholders in the Isles of Scilly Steamship Company Limited (“ISSG”) and we are writing to you as the external auditors of the accounts of ISSG.

We, along with many other shareholders and islanders, have become increasingly concerned with the management of ISSG under the leadership of Andrew May.

We believe that the Board of ISSG is failing to prioritise its primary role of securing adequate and long term sea passenger and freight service solutions to the islands, despite multiple public statements and promises to the contrary going back many years.

We have serious concerns regarding the decision to purchase the Mali Rose in 2016 and the ongoing investment into that vessel by ISSG, when we believe it is not, and will not be, suitable for the Penzance - Scilly route. The purchase was announced with great fanfare in 2016. In Mr May’s statement to shareholders dated July 2017, he stated “At the time of writing the Mali Rose is on the cusp of entering service. Once she has settled into her routine the marine team plan to turn their attention once again to the Scillonian IV project” and yet the Mali Rose is still not in service.

We are concerned that further extensive investment by ISSG into the Mali Rose represents good money after bad and we believe that ISSG’s accounts for the year ended 31st March 2018 should properly reflect the actual realisable value of the Mali Rose through impairment of the asset on the balance sheet, that she should be sold and that the Board should urgently seek to invest instead in a suitable replacement to ensure the long term provision of reliable freight services to the islands.

We ask that ISSG’s external auditors and the Audit Committee of ISSG should fulfil their duties to provide a true and fair view in ISSG’s accounts of the long term viability of the Mali Rose by seeking a fully independent professional valuation from a well recognised expert selected and approved by the firm’s auditors, independently of the Board.

We have copied this email to non-executive directors Mr Peter Hardaker and Mr Diccon Rogers, who we believe, from the last set of annual accounts of ISSG, to be on the audit committee of ISSG, and non-executive directors Mr Mark Howarth and Mr Sam Hicks. Copy also to members of the Advisory Board.

Please acknowledge receipt of this letter.

Yours sincerely

Captain K P Guy FNI, Shareholder, former Captain of the Scillonian
Mr John Banfield, Shareholder, former Director, Vice Chair and Chairman of IOSSC
Mr Kenneth Christopher, Shareholder
Mr Alfred Trenear, Shareholder
Mr Alan Davis, Shareholder
Mr Ritchie Christopher, Shareholder
Mr John Lane, Shareholder
Mr Stuart Jenkins, Shareholder
Mr Michael Pender, Business Owner, Shareholder
Mrs Sam Mallon, Business owner, Shareholder
Mrs Issy Trenear, Business Owner, Shareholder
Miss Amanda Pender, Business Owner, Shareholder

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