How ex-footballer’s energy gamble ended up costing bill payers £700m

theguardian.com:

As customers of Avro Energy forked out for their gas and electricity direct debits, they had no idea that they were only postponing the death of a badly run business whose collapse would end up costing bill payers £700m.

Despite having no apparent background in the complex energy industry, Avro’s founder, Jake Brown, a former non-league footballer, set up the company with a family loan in 2016. Within a few years of the company’s entry into the market, Avro had amassed half a million customers while enriching Brown and his family along the way.

Between 2019 and 2020, those customers – who paid for their energy in advance – funded £4.25m in “management charges” funnelled to Sentido Marketing, owned and controlled by Brown, now 28, and his father, Philip, 58, the company’s other director.

During the same period, Avro, based in Hinckley in Leicestershire, lent £700,000 to its owner-directors, the same father-and-son team. It also lent another £830,000 to Berkeley Swiss Ltd, a property development company whose directors and majority owners should be obvious by now: Jake and Philip Brown.

In September 2021, having racked up losses of £55m in seven years, Avro collapsed into administration, owing £90m to its 580,000 customers.

Those customers – and the bulk of their credit balances – were taken on by healthier rival Octopus Energy. But the cost of Avro’s failure, which will be borne ultimately by every bill payer in the country, has been estimated by the energy regulator Ofgem at £700m.

It is Ofgem that should take much of the blame for the fiasco, according to Tuesday’s report by MPs on the business and energy select committee.

A phalanx of companies flooded the market nearly a decade ago, responding to a deregulatory drive by the