Shaun Kiely in pub trade

Another member of the Kiely family, Shaun Kiely, has entered the pub business with a company which, like his brother Paul Kiely's Provence, has been buying freehold pubs and trying to sell them for big profits.

Shaun Kiely's previous

company S-Mart Stores crashed a year before Provence and operated the same model - selling freehold property at public auction for inflated values thanks to greatly inflated rents.

Shaun Kiely became a director of Penny Lodge Developments - a Burnley-based company that has been advertising pubs this year on its website to investors - at the start of September.

In June, licensee Andrew Johnson, of the Black Lion, in Llansawel, West Wales, reported that Penny Lodge had offered to buy his business, which has a turnover of just £50,000 per annum and was on the market for £225,000.

Penny Lodge began to advertise for a tenant for an annual rent of £37,000 per annum - the new rental would have made the pub worth as much as £100,000 more when sold to an investor.

Penny Lodge eventually withdrew the offer. Penny Lodge was founded in December last year.

Another director is Phillip Drew, who worked for Shaun Kiely at S-Mart Stores.

A Penny Lodge lessee, who ran the Hungry Bear in Wales, said: "I lost £20,000 in three months trying to run a Penny Lodge pub.

"I had to spend £4,000 just trying to get things working. I was paying a rent of £4,000 a month, but taking only £1,200."

Penny Lodge later sold the Hungry Bear to Provence.

Shaun Kiely was also a dir-ector of Kiely Developments, a building company he ran with Provence founder Paul Kiely, which collapsed after it was denounced in the House of Commons as a "cowboy builder" by MP Jim Dobbins.

Industry sources report that Penny Lodge is still looking to acquire pubs.

Inn trade forced to withdraw

Inn Trade Associates, the

company set up by two former Provence employees to protect the premises licences at 150 pubs that were still trading at the point of administration, is withdrawing applications at around 13 pubs.

The pubs, mostly in the north-west, are expected to see premises licence applications from Birchwood Leisure, a company set up by former Provence company secretary Peter Kiely. Inn Trade boss David Nugent said: "It is with extreme reluctance we're withdrawing these

applications." The pubs include seven freeholds that Provence was unable to sell before going into administration.

Shaun kiely emails MA to have his say

"Penny Lodge currently owns: 12 houses, an office building, a shop, two pieces of development land and two pubs. As far as the pubs are concerned we have owned them for about 12 months.

"The tenants pay us on time and we never ever go near them. They've been excellent investments and we're keen to expand - which we will. Unlike Provence, we won't get involved in the mechanics of the business.

"It is in our interests and the tenants' to buy properties that can work and to charge a rent that is sustainable. We have small overheads and do not need to make a silly short-term profit - we are in business for the long-term. There are pubs for sale and there are tenants who cannot afford them. By matching the tenant with the right pub everyone benefits - including Penny Lodge.

"Provence was too greedy - bought the wrong pubs - and got themselves in the middle. Why? Only God knows."

lessee not told of 21 conditions

Collapsed pub company Provence failed to notify an incoming lessee that 21 conditions had been attached to her premises licence before she moved in.

Michelle McGowan agreed to pay £900 a week rent at a pub where live sport, pool, juke machines and fruit machines are all banned and it can only trade between 5pm and 10pm.

McGowan was told of the conditions at the Goldmine in Plymouth by her police licensing officer after she'd moved in - and signed up to Sky for £500 a month.

The conditions were in place when she signed the lease on 3 October but Provence did not mention them.

McGowan paid Provence £8,400 in bond and rent upfront and spent about £15,000 on stock, Sky costs, and repairs. The cellar cooler and the central heating did not work when she arrived and the kitchen was in disrepair.

The pub has not traded since McGowan arrived because it would not make enough money to cover running costs. "How can I pay £900 a week rent on five hours trading a day with a cellar that's not working?," she said.

Provence's administrators Kroll have not been in touch and McGowan is trying to contact the pub's freehold owner. Her council said the premises licence is being transferred from Provence to Inn Trade Associates, the company set up to save licences at around 150 Provence pubs.