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Moving forward

10 January, 2008
How the directors at Aleef Garages are putting the bad news behind them
Page 10 
Aleef Garages is one of the biggest names in the UK independent forecourt retail sector, and few in the industry could have failed to spot the recent headlines about the
company. In November, nine former Aleef employees, including three former directors, were jailed for their part in a major tax fraud at the Bolton-based company relating to the period between May 1998 and April 2002. A £5m confiscation order was issued to be split between the three former directors - brothers Mustaq Hussain Patel, Iqbal Ahmed Patel and Mubarakali Ahmed Patel - following a lengthy investigation by HM Revenue & Customs (HMRC). The three men were also each jailed for three years and banned from being a director for 10 years. In addition, smaller confiscation orders were given to other former staff.HMRC said in a statement at the time that the charges related to "fraudulent accounting related to franchise outlets, suppression of stock purchases and under declaration of takings at the newsagents' shops to the diversion of funds and payments of tax-free undeclared wages".Aleef is disputing the HMRC statement. It blames "corner shop practices", saying that poor control and a lack of systems - teamed with the business being run by directors with no formal accountancy training - had ultimately allowed staff to operate a "business within a business".The current directors, cousins Anis, Asif and Abid Patel, are now keen to put the past behind them and look to the future.They say that not only has the company changed and grown, but the fraud related to an incident in the past, and there are now different directors running the company and a new and transparent accountancy system in place.Anis says: "The problem was all to do with the merging of the newsagent part of the business with the garage section, this was very complicated and the company had poor accounting advice. The directors at the time had received no formal education in how to run a company - because it has always been a family business. They just learned what to do as they went along."Asif adds: "Today we're a totally different company, not only have we doubled in size but there have been a lot of changes put in place. We want to stress that what has happened is in the past and we're looking to the future now."Today Aleef is one of the biggest family businesses in the North West. It runs 39 forecourts and 30 shops in the Bolton and Manchester areas and employs 430 staff. But all this has sprung from very humble beginnings, according to Asif.The Aleef Group was started in 1981, when the current directors' grandfather Ahmed Patel opened a corner shop in Salford, Greater Manchester. Ahmed had moved to Bolton as an immigrant from the Gujarat in India and worked as an interpreter for the local council while running the shop. For the next decade he managed to add at least one extra shop to the growing empire every other year and he eventually left his council job to run the business full time. He also brought in family members, including his sons, to help out.The company took over its first forecourt in 1990, a Shell site run on a licence in Prestwich, Greater Manchester, and Aleef Garages Ltd was born. By this time Ahmed had his three sons - Mustaq, Iqbal and Mubarakali, working with him. They went on to help run the business, expanding the company with the acquisition of more forecourts and shops throughout the '90s, especially with the regeneration of Manchester. By the late '90s Aleef had 16 forecourts and 16 shops.In 1998 the newsagent and forecourt companies merged, and Anis says this is where the more recent problems arose from.He says: "Imagine that you come to this country, you want to work hard and provide for your family. This has always been a family business. But the merger was complicated and the company had poor advice on the accounting side. The directors had received no formal education in these matters."Asif, Anis and Abid became directors of the company in 2003, after the merger, The three cousins had all previously worked outside the forecourt industry.Anis, 29, studied accountancy before working in sales for a telecoms company. He is responsible for the financial aspects of Aleef. Asif, 32, was an IT consultant and now runs the operations side of the business. Abid, 30, has worked in the accounts departments of companies such as Barclaycard and is now in charge of the newsagents side of Aleef. Asif says: "We all had experience in other areas and were able to bring different skills with us to the company. We had also all worked on the forecourts and in the shops when we were growing up, so we're very familiar with how it all works. We were asked to become directors by our fathers who wanted to take a back seat."And the business has grown rapidly since the trio took over the reins at the headquarters, Aleef House. Anis explains: "As the oil companies have been offloading their forecourts, we've been buying them. Our name became so well known in the Manchester area that the oil companies started approaching us and offering us prime sites. These included Shell and Texaco. It's been a very fertile market. Last year Total approached us to be one of their COGOPs - company group owned operators - and we now operate 11 COGOP sites."The directors have been working hard to make sure the recent fraud investigation does not damage their reputation. This has included keeping all their suppliers aware of what has been going on - step by step.Asif says: "It has made things a lot more difficult. But suppliers are always keen to be kept in the loop so we've told them what's been going on and I think they have appreciated that."The directors believe part of Aleef's success in the industry is its ability to embrace change quickly. For example, it was one of the first companies to tie up with Subway in the forecourt shop.It has refused to sign up with one sole symbol group for its shops though, preferring to keep control of the business at Aleef.The directors also like to offer their forecourt managers a degree of autonomy to choose which products to stock. "The managers know the area so we prefer to sit back and watch rather than interfere too much," explains Anis. "We want to make sure the shops sell the right products - after all every shop is different. The managers understand what are vital products to stock."The directors are looking into refurbishing some of their garages - they currently run Shell and Texaco sites, plus a cluster of COCO sites for Shell and the Total COGOP sites. They are also working with a business development manager to increase margins at their shops.But they say they are not interested in expanding into any other areas of the country. They are happy in an area they know - all three live in Bolton - and are keen to stress that they are interested in growing the business, but in a controlled way.Says Anis: "We might sell some sites and we might buy some too, we just want the right portfolio."It would be great to pass the business on to the next generation of the family - but not just yet!"