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Eric Short Haulage (ESH), the Newcastle haulage company that went into administration less than 18 months after it was sold in a highly leveraged deal, has been purchased by a relative of its company secretary for £25,000, according to its administrator. The speed of the company's failure is covered in an administrator's report, which shows that in November 2007 ESH's turnover was £1.9m and pre-tax profits were £103,000. However, by the beginning of 2009, the business was in disarray as fuel prices  rose.

Administrator Duncan Morris says he was appointed by the floating charge holder Boston Commercial Finance (BCF). He also explains how The Logistix Group - a trading name owned by Caveman Consultants, which Companies House lists as having just one director: Mansoor Hussain - then bought ESH from director Alex Rawlings and company secretary Shahid Hussain.  The Logistix Group had already stepped in to help the business when cash flow started drying up in February. In his report, Duncan Morris explains: "[ESH] entered into an agreement with a company owned by a relation of the Company's secretary, The Logistix Group, and this company arranged suppliers to maintain the company's fleet."

The sale of ESH meant The Logistix Group inherited its membership of pallet network Fortec. Fortec MD Neil Hodgson insists that satisfactory checks were carried out: "We are very diligent in our dealings with everybody," he says. "We take particular care with anyone we take on.  It's in the network's best interests." Hodgson confirms that The Logistix Group continues to be a member.

A spokeswoman for The Logistix Group says a significant sum has been invested in order to maintain Eric Short Haulage's work and also integrate it with the Logistix Group to help build a pan-European business. She refutes any suggestion that Mansoor is related to Shahid Hussain and on the subject of Eric Short Haulage's creditors she adds: "In order to maintain a working relationship with a number of suppliers in the North East, we have come to a commercial agreement with them. This level of goodwill and commitment will hopefully help to build on these relationships for the future."

CM has spoken to another former director of a haulage firm who sold his business after being approached by BCF sister company Boston & Maine. We previously reported how ESH boss Eric Short was approached by Boston & Maine prior to him selling his business ('Short on answers' CM 18 June).

The latest haulier to come forward says he has been interviewed twice by the Serious Fraud Office in February this year and gave a statement. It is understood that he, like Eric Short, never received the full amount promised in the sale after his former business ceased trading before the debt was settled. CM understands that other companies could be involved in these preliminary investigations.