UK visa services firm sues ex-boss for £6m over alleged improper use of profits
Cloud Bai-Yun, who once represented the UK on an international ethics and fraud advisory body, is accused by Ecctis of a breach of fiduciary duty, according to court filings.
The company claims that she oversaw profit making on a not-for-profit government contract and this money was ultimately used in 2021 to pay her £17.587m for her shares in Ecctis's holding company.
Ecctis's claim against Bai-Yun is for £4.63m, plus more than £2m in interest.
Bai-Yun said: 'I wholly deny the allegations made against me by the new management of Ecctis and will be defending myself in court.'
Ecctis runs the official language tests and qualification recognition services for those applying for certain UK visas or permissions.
Under a not-for-profit contract with the Department for Education (DfE), it is claimed that Ecctis was obliged to reinvest any profit earned or to keep a maximum of half of the net gain in reserve.
It is alleged that Bai-Yun, who was chief executive from 2014 and a director since 2006, instead improperly approved large dividend payments in 2016 and 2017 to a holding company.
Bai-Yun was the sole shareholder of the holding company and in 2021 that money was used to buy her shareholding for £17.587m, it is claimed. The shares were then transferred to an employee-owned trust.
Bai-Yun's defence claims there were no restrictions in Ecctis's articles of association on paying dividends and that it was for her as the shareholder to make the decisions on the payments.
The legal action by Ecctis follows its repayment to the government of £13.64m after a DfE audit concluded the company had failed to reinvest profits in its services. Bai-Yun, who had moved from being chief executive to chief adviser on the sale of her shares, was asked to resign from the latter role after the 2022 audit.
The Guardian revealed details of the scandal in January this year, leading the DfE's most senior civil servant to tell the Common's public accounts committee that officials had undertaken a 'very hard review' of 'serious failings'.
The new legal row will be an embarrassment to the DfE, which renewed Ecctis's contract this year with changes that ensured all profits were directly paid to the government.
Insiders at the company have voiced concerns that Ecctis continues to hold a monopoly on services they say would be better run directly by the state.
Ecctis has seen a huge increase in revenue in recent years owing to historically high levels of immigration, particularly in the post-Brexit period.
According to Ecctis's particulars of claim, the payment in 2016 of a £2.16m dividend to the holdings company was questioned at the time by the finance director at the company, Robert Wall.
Wall wrote that his understanding was that they were supposed to operate 'as a not-for-profit business', it is claimed.
Despite this, the board, with Bai-Yun in attendance, went on to approve a further dividend in 2017 of £2.5m.
Ecctis claims the dividends were 'constituted almost entirely of net profit' from the government contracts, leaving it in breach of the agreement with the DfE. The company further alleges: 'In February 2021, funds including the 2017 dividends were passed to the defendant as part of the £17.587m sale price.'
Ecctis's claim for £4.6m plus interest in 'remedy' covers only the 2016 and 2017 dividend payments. There is a time limitation on claims.
The claim refers, however, to the DfE's audit which found that £16.63m in dividends were paid in total up to 2021 and that this money was ultimately 'put towards the purchase price' of £17.587m paid to Bai-Yun.
Ecctis claims Bai-Yun failed in her duty as a director of Ecctis to promote the success of the company and avoid conflicts of interest.
In her defence, Bai-Yun claims the price she received for her shares was £17.5m and not £17.587m.
She claims there was no contractual restraint on the use of the balance of the net profit once appropriate investments in the services were made.
She denies a conflict of interest as she approved the dividends as the shareholder of the holding company, rather than as a director of Ecctis.
She claims Wall was mistaken in his understanding of the contract with the DfE.
A DfE spokesperson said: 'Our new, strengthened contract, alongside a new leadership team at Ecctis, means the department can continue to work with Ecctis to provide a good service to the public on the recognition of qualifications, which is a requirement under international law.'
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Daily Mail
29 minutes ago
- Daily Mail
'Is prowling for catcallers really the best use of police time?' Fury as undercover cops pose as joggers to catch wolf-whistlers
Police chiefs have sparked fury after undercover officers posed as joggers to catch men catcalling women - with campaigners branding it a 'nightmarish' clampdown on free speech. Activists have argued police should be using their resources to tackle criminal activity such as knife crime and theft - not 'prowling the streets in search of lawful but disapproved remarks'. It comes after Surrey Police sent two officers out running at rush hour to show the scale of harassment that women are facing. A spokesman for the force said of the patrols: 'These behaviours may not be criminal offences in themselves, but they need to be addressed.' Condemning the crackdown, The Free Speech Union said: 'Britain is in the grip of a surge in serious crime. In the year to March 2025, shoplifting rose 20 per cent, theft from the person climbed 15 per cent , and robberies topped 78,000. 'And Surrey Police's answer? "Jog On": a county-wide sting in which female officers, dressed as joggers, run through public spaces trailed by squad cars, ready to swoop on anyone who cat-calls, wolf-whistles or makes sexually suggestive comments. 'Perhaps Surrey Police should take their own advice and "just think" about whether prowling the streets in search of lawful but disapproved remarks is really the best use of police time in a county, and a country, grappling with so many actual crimes.' The union compared the campaign to Philip K. Dick's 1956 novella The Minority Report, which imagined a 'pre-crime' police unit hunting those who it believed would commit a crime. 'Across the country, Dick's nightmarish logic is fast becoming a technocratic rationale driving the authorities to clamp down on freedom of expression,' the union said. The Free Speech Union condemned Surrey Police's crackdown on catcalling The Boxing Saves Lives organisation also hit back at the campaign, suggesting police have better things to do Surrey Police sent the joggers out under the belief that acts such as catcalling could 'lead on to other behaviours'. But the Boxing Saves Lives organisation hit back at the claims, arguing that 'performative boll**** like this makes [women] think [police] have their finger on the pulse'. 'Have they got nothing better to do than to go finding new and inventive ways to be oppressed?', they wrote. 'This is not to say catcalling men aren't the absolute worst toss*** ever, but you'd be pretty pissed off if they told you they didn't have resources to attend a burglary, but had coppers free to jog round the streets to fight crimes they've prioritised to show how righteous they are. 'Women and girls will be failed all the time by the police, but performative boll**** like this makes them think they have their finger on the pulse.' Free speech activists argued police should instead be focusing on enforcing existing laws. A Surrey Police spokesperson said: 'Our priority is not only to tackle and solve crime but also to prevent it from happening in the first place.' Reporters from the news outlet LBC joined officers on patrol during the evening rush hour in Reigate, Surrey. During the operation, plain clothes police officers, who were dressed in athletic jogging gear, headed to areas identified as 'harassment hotspots'. Meanwhile, specialist units waited nearby to intervene at the first sign of abuse. According to LBC, the two female undercover cops were 'targeted within minutes' by a man in a large truck who 'honked at them and made gestures out the window'. Inspector John Vale said: 'One of our officers was honked at within ten minutes — then another vehicle slowed down, beeping and making gestures just 30 seconds later - that's how frequent it is. 'Someone slowing down, staring, shouting - even if it's not always criminal - it can have a huge impact on people's everyday lives and stops women from doing something as simple as going for a run. 'We have to ask: is that person going to escalate? Are they a sexual offender? We want to manage that risk early.' PC Abby Hayward, one of the police officers who posed as a jogger, said that catcalling is something many women are subjected to every day. She said that the behaviour was 'so common' and that it needed to be addressed. Surrey Police said that since they launched the 'Jog On' campaign four weeks ago, 18 arrests have been made for various offences including sexual assault and theft. Inspector Vale added: 'We know that this kind of harassment is significantly under reported thanks to a study carried out by Surrey County Council this year, which revealed that of 450 female residents surveyed, 49 per cent never reported. 'To date, we have made a number of interventions following reports of harassment of our plain clothes runners. 'In these cases, it was deemed appropriate to provide education around anti-social behaviour. 'For repeat offenders or where the behaviour is more serious, we will robustly pursue all criminal justice outcomes. 'We recognise this is a significant worry for women and girls, and we'll continue to patrol running routes throughout Redhill.' He continued: 'This type of harassment isn't just being experienced by communities in Reigate and Banstead, but communities across the whole of Surrey, and it's unacceptable. 'We have female officers and staff members who have been the subject to such behaviour when off duty. 'The message I would like to impart to perpetrators is this; your actions will not be tolerated. 'Please reflect and ask yourself 'is this how you would treat or want your partner, mother, sister to be treated?' 'The next time you see a female jogger, just think, they could be a police officer with colleagues nearby ready to stop you. Your behaviour is not welcome in Surrey.'
BBC News
30 minutes ago
- BBC News
Dundee University admits 'clear failings' over damning report
Dundee University has published its response to a damning report into the institution's financial collapse that led to a £22m government university said that the Gillies Report, which was published in June, had highlighted "clear failings in financial monitoring, management and governance".It has issued a 65-point action plan including daily cash flow monitoring, cancelling or deferring non-essential capital projects, and training in "financial literacy" for all members of the university's executive group, court and university also said that it had received 434 applications for its voluntary severance scheme. Dundee University said the independent report by Prof Pamela Gillies had been a "chastening experience and triggered a time for deep self-reflection". The university, which currently faces a £35m deficit, said that its "proposed route forward" would require "significant additional public funding".It received £22m from the Scottish Funding Council in February and will receive an additional £40m from the Scottish government over the next two academic university is looking to shed 300 roles through the voluntary scheme, after initially forecasting about 700 jobs would go. The Gillies Report savaged the university's former leadership team, including Prof Iain Gillespie, who resigned last found that Prof Gillespie, ex-interim principal Prof Shane O'Neill, and previous chief operating officer Jim McGeorge had acted as a "triumvirate", making decisions among also questioned the quality of information about the university's finances given to other senior report said university bosses and its governing body failed multiple times to identify the worsening crisis and continued to overspend instead of taking said the problems were "self-inflicted" and it should have been clear to senior members of the university that its financial position "was worse than presented". The university has now published its official response to the acknowledged there had been "a complete breakdown in cash management and expenditure control at the senior level of the organisation".It added: "While there were significant external factors, which had affected the higher education sector across the UK to varying degrees, the university's response to these, and responsible management of our finances, had fallen well short of the standards that everyone should have expected."However, it admitted that the situation was exacerbated by "over-reliance on the director of finance for strategic financial decisions, without sufficient independent challenge".It said members of the University Executive Group (UEG) were focused on their own portfolios, with "limited cross-functional financial accountability".The university said that the Gillies Report was clear on the "dominant nature of the most senior leadership in the university." It added: "This led to a hierarchical culture, characterised by hubris, the suppression of dissent, and fear of speaking out, resulting in an inability for staff to challenge constructively." 'Chastening experience' The university is proposing a series of actions that will be taken in the short, medium and long term, designed to ensure the university has a sustainable include daily cash flow monitoring and the implementation of further cost controls to reduce discretionary spending, such as principal Prof Gillespie was criticised last year for making costly trips abroad, including a £7,000 trip to Hong university said a new monthly management reporting process had been implemented to ensure that "management accounts are formally presented to senior management and the university court." There are also proposals to overhaul the court and to appoint a permanent principal with "experience of transformation and change and with a people-focused leadership style".It will also schedule a programme of monthly "town-hall" events to listen to the "concerns, hopes and ideas of staff and students."The response concluded by saying: "The circumstances surrounding the Gillies Report have been a chastening experience and triggered a time for deep self-reflection. "They present a unique opportunity to renew and refresh the university's covenant with its community—staff, students, alumni, the court, research partners, third party stakeholders, and the city of Dundee."
Reuters
30 minutes ago
- Reuters
FTSE 100 ekes out gains amid global rally on US rate cut optimism
Aug 13 (Reuters) - Britain's FTSE 100 closed higher on Wednesday, reaching a one-week peak, as expectations of a U.S. Federal Reserve interest rate cut buoyed demand for risk assets globally. The blue-chip index (.FTSE), opens new tab finished 0.2% higher, marking its third consecutive day of gains, while the domestically focused midcap FTSE 250 index (.FTMC), opens new tab ended little changed. European bourses outperformed the FTSE 100 as losses in energy and financial stocks weighed on the London's benchmark. Global equities rallied following Tuesday's U.S. inflation data, which aligned with expectations and strengthened confidence in a September rate cut by the Fed, propelling Wall Street to record highs. This positive sentiment also lifted British markets, with healthcare stocks (.FTNMX201030), opens new tab leading gains, up 2.7%. Contrasting with U.S. optimism, British labour data on Tuesday revealed weak hiring alongside persistent wage growth - complicating the Bank of England's balancing act between economic slowdown and stubborn inflation. Markets now anticipate a delayed BoE rate cut in November. Next on the market's radar will be Thursday's gross domestic product data, which economists expect to show the British economy expanded by 0.1% in the three months to June. Investors' focus will also be on Friday's high-stakes talks between U.S. President Donald Trump and Russian President Vladimir Putin regarding a potential deal to end the conflict in Ukraine. A gauge of Britain's energy companies (.FTNMX601010), opens new tab declined 0.6% as oil prices fell more than 1% in the day, though losses were limited after U.S. Treasury Secretary Scott Bessent indicated sanctions against Russia or secondary tariffs could increase if Friday's meeting disappoints. Meanwhile, financials weakened with the non-life insurers index (.FTNMX303020), opens new tab falling 3.5%. Beazley (BEZG.L), opens new tab tumbled 12.3% in its worst one-day decline in nearly five years, after it lowered its annual premium growth forecast, partly hurt by subdued demand for its cyber and property risk insurance. Among other movers, infrastructure products maker Hill & Smith (HILS.L), opens new tab topped the gains on the midcap index, rising 10.2%, after its half-yearly results and announcement of a share buyback programme.
