A UK recruitment firm has been taken out of administration for the third time in four years as part of a succession of deals that left some of the former management team in place and millions of pounds owed to the public purse.
The chain of insolvencies appears to contain more examples of phoenixism: a process in which companies are liquidated and directors can be reborn from the ashes with a new entity, free of debt.
HM Revenue and Customs (HMRC) has estimated that phoenixism, which is generally legal, cost the public purse around 22% of the £3.8bn of tax losses reported between 2022 and 2023.
The Guardian has reported on a series of cases in the staffing sector since last summer, when a temp agency apparently emerged from insolvency for the second time while owing tens of millions of pounds to the public purse.
In the latest case, an administrator’s report details how two Hampshire-based recruitment firms – Sert Group and Sert Training – collapsed in January and were bought for £196,304 by an unrelated buyer who insisted the previous management remained in place.
The management, which includes Sert chief executive Mark Edwards and finance director Ben Knight, had run two previous versions of the same business which had also gone into administration. Together, the three insolvencies appear to leave creditors out of pocket of £7.6m, including around £4.5m owed to HMRC, according to research compiled by business data firm Tech City Labs.
In February 2022, Edwards and Knight were directors of a recruitment company called 3R Global when Sert Workforce Solutions acquired its assets for £60,000 after it collapsed into administration.
At the same time, both were also directors of Sert Workforce Solutions, which itself went into administration in October 2024. Sert Training then acquired its assets for £50,000 and 7.5% of future profits.
Sert Training had the same ownership as the previous two versions of the business, with Edwards and Knight listed as directors. It lasted another 15 months before being administered and sold to an outside company called Meraki 6.
The Sert Training administrator’s report adds that there were two offers to buy the insolvent company, both of which were conditional on the existing management remaining in place.
“After these conversations, the management (Sert) confirmed that they would only work with the buyer. Shortly after, interested party 2 withdrew from the process,” the administrator wrote.
Meraki 6’s lawyers said the purchase of the Sert business was not a case of phoenixism as Meraki is not related to the previous owners of Sert and there were no common directors. They added that their client’s deal had saved jobs and was unaware of the company’s previous insolvencies.
After the Meraki 6 acquisition, Edwards continued to be listed as CEO of Sert while advertising himself as the primary contact for jobs the company has been promoting to candidates. Edwards and Meraki said he is leaving the business and is now on leave to work in the yard.
Knight continues to work for Sert, where a colleague identified him in The Guardian as the company’s chief financial officer. Meraki said Knight was no longer a statutory director or shareholder.
Edwards and Knight did not comment on previous administrations.
The Sert case follows others in the staffing sector. Last month, The Guardian reported how Premier Group Recruitment went bankrupt due to HMRC and other creditors by almost £3 million, only to re-emerge promising to send its staff on an all-expenses-paid trip to Las Vegas after being bought back by its former owner for an initial £10,000.
