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SchoolsCompany: Former bosses of scandal-hit academy trust sued over missing millions

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A scandal-hit academy trust is suing former trustees to recover up to £2.8 million of “lost public funds”.

Experts say the case sets a precedent that should serve as a warning for the sector. Normally the government would just write off liabilities owed by collapsed trusts.

An investigation by Schools Week has established the government is funding the defunct SchoolsCompany Trust to take legal action against several ex-trustees. The trust was stripped of its three Devon pupil referrral units and Kent secondary in 2018 after damning Ofsted reports and claims of financial mismanagement, inflated results and unsafe premises.

SchoolsCompany stopped paying invoices and had a multimillion pound deficit before it collapsed. The government wrote off £3 million of bailouts, but newly published trust accounts show the Education and Skills Funding Agency is still owed £2.807 million.

Schools Week understands the trust is seeking to obtain up to this amount via the legal claim. The accounts say the legal action follows an ESFA probe into “the conduct of the former trustees which had resulted in the loss of public funds”.

Claims filed against four former academy trust bosses

High court documents reveal claims have been filed by SchoolsCompany lawyers Michelmores against four trustees who left in 2017 and 2018.

The grounds for legal action are not given and described only as miscellaneous “Part 7” claims, typically used when facts are contested.

The defendants named are Elias Achilleos (pictures above), the former chief executive, Everton Wilson, the former finance director, Patrick Eames, the former executive principal and operations director, and Heinrich Zimmerman, a former trustee and consultant.

SchoolsCompany Limited, a still-active management consultancy, is also facing action. Companies House lists Achilleos as its sole director.

In 2016 it recorded £125,000 in gross profits, but its latest accounts reveal assets of £30,000.

Court officials said defendants had been served notice and an application hearing was held last month, but defences had not yet been filed.

Eames said he could not discuss live proceedings, and Wilson declined to comment. Other defendants were approached for comment.

DfE provides financial support for legal action

Academies minister Baroness Berridge said: “Any type of financial mismanagement in schools is completely unacceptable, which is why I have agreed for the department to provide financial support to SchoolsCompany’s legal action against its former directors, to help recover taxpayer funds.”

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Baroness Berridge

She said new measures to strengthen financial transparency mean government can spot “irregularities much more quickly”.

“Normally we would see ESFA write off liabilities, so this seems to set something of a precedent,” said Micon Metcalfe, a financial management expert. “It sends a message trust directors must act with reasonable skill and care and in the best interests of the company.”

Leora Cruddas, the chief executive of the Confederation of School Trusts (CST), said it was important all trusts were “properly held to account” over public funds.

But academy financial regulation had “never been stronger”, she added. A new CST report argues academies are more accountable to government than other schools.

Government ‘between a rock and a hard place’

Stephen Morales, the chief executive of the Institute of School Business Leadership, said some problems flowed from academisation initially being sold as the freedom to “do whatever you like”, with few questions asked.

But the government was “between a rock and a hard place” resolving trusts’ financial troubles.

Bailouts could prevent disrupted education and be paid back, but promoting them “flies in the face of encouraging schools to be diligent with finances”.

ESFA’s investigation reports into alleged “impropriety”, conflicts of interest and related-party transactions at SchoolsCompany – as well as financial scandals at two other failed trusts – have still not been published.

Sarah Drew, whose son attended the trust’s North Devon Academy, welcomed efforts to seek accountability.

“It’s too late for kids like him who left with no qualifications. My son went through hell. The school was meant to be there to help kids with problems, but it wasn’t. They said because of funding they didn’t have enough teachers.”

A SchoolsCompany spokesperson said legal claims followed “detailed investigation”, but it could not comment further with proceedings ongoing.

Where is Elias Achilleos?

Ex-SchoolsCompany Trust CEO Elias Achilleos. Credit: Kent Messenger Group
Ex-SchoolsCompany Trust CEO Elias Achilleos. Credit: Kent Messenger Group

Schools Week has tried to track down Elias Achilleos, who led SchoolsCompany from its launch in 2012 until wind-up began in 2018.

We wanted to ask about the legal action, the wide-ranging problems engulfing the trust pre-collapse, and why it appeared to have simultaneously been seeking expansion in Nigeria, China, Singapore and Saudi Arabia.

An email address for Elias yielded no response. Court documents suggest he has no lawyer.

The trust, its lawyers and other defendants did not provide details for Elias.

Electoral roll records revealed only one current residential address, a basement flat in Torquay, for an Elias Achilleos.

Schools Week visited the property this week, but this Elias Achilleos was a retired Greek carpenter.

Companies House lists Archilleos’ correspondence address while at the trust, but it is Goodwin Academy – a school rebrokered in 2018. The school and its new trust did not reply.

Another correspondence address for his SchoolsCompany Limited consultancy firm is a slick City of London office (pictures above).

But when Schools Week visited, a puzzled receptionist could not find him or the firm on a list of tenants, physical and virtual. Regus, which manages the relevant floor, did not respond to emails.

Records list seven dissolved companies

We discovered two other Companies House pages for Elias Achilleos, listing seven companies between them where he has held directorships.

But all are now dissolved. Six listed the same City address as SchoolsCompany Limited. None had featured on the receptionist’s list, and the only other was an insolvency firm.

Company names signal past ambitions if not his whereabouts, from “Bureau for International Education” and “International Teacher Training College” to IT firm “NexDefence Global”.

Meanwhile, Nigerian government records reveal a “UK SchoolsCompany Africa Ltd” registered in Abuja in 2017, shortly after the UK trust received a financial notice to improve.

A business listing website names Achilleos as director. But it is “inactive”, and an email provided for a US co-director also produced no response.

A Nigerian senator, who proudly announced a deal with SchoolsCompany to build a “construction and fabrication academy” in 2017, similarly did not respond to emails. When a press notice confirmed its launch earlier this year, Achilleos’ face and name were nowhere to be seen.

DfE starts to bare its teeth on academy scandals

The DfE has faced flak for not taking tougher action on academy management scandals, from unions demanding it show “teeth” to warnings by MPs it lacks effective sanctions.

The legal action against former SchoolsCompany trustees seems to be the latest sign of the government beginning to flex its muscles. The education secretary possesses once little-used powers to ban individuals from running independent schools, including academies and free schools, under section 128 of the Education and Skills Act 2008.

Schools Week could only find six such bans published online in relation to academy financial issues, but all have been since last summer. Thirteen other bans that date back to 2015 involve radicalisation, illegal schools, indecent images and other issues.

Leaders can also be banned from teaching if found guilty of misconduct by the Teacher Regulation Agency. Liam Nolan, the former Perry Beeches Academy Trust “superhead”, received such a ban in 2018, followed by a management ban two years later.

Potential criminal offences can be referred to the police and prosecutions can follow. Samuel Abayomi Kayode, the former accounts manager at Hatcham College in south London, was banned from school management last year following his conviction on theft and fraud charges.

But the ESFA acknowledged in 2019 that there was nothing to stop people involved in malpractice from acting as trustees or governors elsewhere, such as in FE colleges, or as directors of education-related companies. The DfE struck a deal in 2019 to boost information sharing with the Insolvency Service, which can disqualify company directors.

Meanwhile, the Charity Commission and High Court can order charity trustees’ removal for misconduct or mismanagement.

The charity regulator has received at least four academy trust referrals from the DfE since 2018, but took no regulatory action in those cases as there were “investigation and enforcement options available”. It would not disclose the trusts’ names.

Clarification: this article was updated on Friday September 10 to include further details on the trust’s £2.8m debt to ESFA.


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