The toxic family feud that could close the Italia Conti school
Pupil numbers are falling and its London headquarters are now on the market
Its problems began in 1984 after the reins were handed to the owner's children
During their 16 years at the helm of the Italia Conti theatre school, Donald and Eve Sheward helped transform it into a globally respected institution and the place to go for anyone wanting to break into showbusiness.
Over the years, it launched the careers of some of the biggest stars around, from Noel Coward to Patsy Kensit, Bonnie Langford and Naomi Campbell.
Trained accountants with shrewd brains for business, the Shewards kept their books in order and saw membership numbers rocket. When they handed over the running of the school — the oldest and most prestigious theatre academy in the world — to their four children, Anne, Samantha, Graham and Gaynor in 1984, they could rest easy in the knowledge that Italia Conti could continue on the glittering path of success they had carved out.
Now it appears the future of the school is hanging in the balance and it faces a real-life drama. Its London headquarters are on the market, pupil numbers are falling, while there have been tales of death threats, a multi-million-pound fraud, and a bitter feud which has torn the family apart.
There’s even talk that the school could close.
From left to right, Gaynor, Anne, Graham and Samantha Sheward - who were handed the academy in 1984
Their son Graham says: ‘My parents would be turning in their graves. That’s why I’m disgusted. Everybody loved Italia Conti.’
So what is the story behind the fall from grace of this internationally renowned centre of stage excellence?
The school came from modest beginnings. It was founded by acclaimed actress Italia Conti in 1911. She trained children from her rented flat in Great Portland Street, London, for Christmas stage shows, Where The Rainbow Ends.
Although she eventually managed to raise enough funds to move to a church building, money was short.
Later, her niece Ruth Conti, a talented singer, came over from Australia to help run the school, and they worked hard to build the business up.
By the time of Italia’s death, aged 72 in 1946, Ruth was running things. She had managed to fundraise enough for new premises and added four hours of ‘general education’ classes for pupils every day.
Where The Rainbow Ends was performed for the last time in 1959, and a few years later, Eve Sheward saw an advert in The Sunday Times which read ‘school secretary wanted for a performing arts school’.
Although a qualified accountant, she had not worked for a few years following the birth of her children, so applied for the post and was successful. Her son, Graham, 60, says: ‘The school was in trouble. Ruth Conti was a wonderful lady but could not run a business.
‘My mother got the job, and within a short period Ruth became ill and decided to sell the school to the staff.
Naomi Campbell is one of the academy's most famous alumni - having made her name as a world renowned model
‘None of the staff wanted to involve themselves unless my mother was involved. She bought 75 per cent of shares, and the headmistress bought the other 25 per cent. The headmistress later died and my sister Anne bought her shares.’
For the four Sheward children, their childhood was a happy one.
Although not initially well-off (their first home was a council house in South-West London) thanks to Italia Conti’s success, they became more than comfortable and moved to a semi-detached house in nearby Walton-on-Thames.
‘We didn’t come from money, we worked our way up,’ says Graham. ‘My mother adored kids and my dad was probably one of the nicest and most generous people I have met in my life. We all played together growing up. I spent a lot of time with my sister Sam. She was a tomboy, a beautiful blonde. We would all go to the cinema or into the woods. We’d spend all day out, playing.’
They all attended Italia Conti, and surrounded by so much creativity, they flourished.
Graham, who has two sons from his first marriage and a daughter from his second, says: ‘Sam was a very good dancer. Anne was a very good actress, and had parts in a TV show as a child and a few minor roles in movies. Gaynor was a singer, in West End shows including Bugsy Malone.
‘I was much more interested in the production side. I wanted to be a director.’
Meanwhile, Italia Conti was going from strength to strength under the Shewards’ leadership. They applied for public-funded grants to run the school — at the last count it was receiving £750,000 a year from the taxpayer — as well as introducing academic qualifications and changing its name from the Italia Conti Stage School to the Italia Conti Academy of Theatre Arts.
‘My mother was the first person to run a performing arts school offering academic qualifications. She wanted to raise the standards,’ Graham adds.
‘She was a wonderful human being. I have so much respect for her. She had a great reputation in the profession.’
Patsy Kensit, star of several Hollywood films and Emmerdale, also attended the school in her formative years
In 1984, they moved the school to its impressive current home in the Barbican — a nine-floor building with mirrored, sprung-floored dance halls, recording studios and lecture theatres.
Their success complete, the couple, childhood sweethearts from South-East London, decided to retire and passed control to their children while they emigrated to Spain. They remained trustees.
The eldest Anne, now 66, became principal of the school, Graham, a managing director, mother-of-two Samantha, 62, ran a Saturday school in Guildford, Surrey, while Gaynor oversaw the Italia Conti’s child actor casting agency.
For years, it offered places to more than 300 pupils aged five to 19, whose parents paid £16,000-a-year. Ofsted rated the school ‘Outstanding’. The books balanced, with an annual surplus of £750,000 to £1 million.
Ten years later, Graham tried to establish an Italia Conti ballet school based in both Belfast and Surrey, but after being told by his sisters they didn’t support the plans, he resigned, pursuing separate business affairs, including a failed attempt to establish this school independently, although things remained cordial.
In 2013, Eve died aged 85, followed the next year by Donald, who was also 85, and the Sheward siblings took full control of the business and its assets. These included the Barbican head office, and a site in Clapham from where a degree course is run.
Perhaps pre-empting any sibling fall-outs, Donald appointed a trust to act as an independent third party in his will, saying: ‘I am mindful that difficulties may arise in the ongoing management of Italia Conti.’
With the siblings left with full financial control of the business for the first time, it was at this point that things started to go awry.
Within two years, according to a court judgment, Anne wrote to her brother and sister to say that if they couldn’t get a bridging loan, they would lose their property in Clapham.
It was the first Graham knew that the school was in trouble. Although he maintained a trustee role, he had little to do with the day-to-day running of Italia Conti.
He enlisted the help of chartered management accountant Chris Pritchard, 66, who secured a loan of £7 million, from which staff wages could be paid.
But their worries were far from over. Court documents have revealed how Anne wrote an email to her brother in 2016 saying she was unable to sleep with worry over the size of the loan and the viability of meeting payments.
She then stepped down, explaining her early retirement in a letter to employees, ‘for extremely personal reasons and for the good of my health’. After this, Anne, who never married or had children, started to spend a lot of time at a property she owns in Malaga, and Samantha became principal.
Chris Pritchard was then appointed finance director and he commissioned Kent-based auditing firm Riddingtons to go over the books. Their findings painted a damning picture.
Bonnie Langford, pictured in 1984 performing at the Italia Conti School, appeared in Doctor Who and several West End musicals
Over the course of eight visits to the school at the end of 2016, they found £1 million had been withdrawn in petty cash over a two-year period — half of which was unaccounted for.
Furthermore, according to the tribunal judgment, they found Anne had been claiming ‘expenses’ of £2,000 a month with no receipts, and had even claimed as much as £10,000 in one month alone.
Members of staff, which included financial controller Susan Jolley and her brother Roy, the buildings manager, had been receiving suspect ‘overtime’ payments, including 150 hours for Roy at £20.60-a-hour in one month. They found contractors were employed to do at least £1 million of building work and were then paid in cash, alongside tens of thousands worth of payments to companies that, according to Riddingtons, didn’t exist, including one for an electrics company that received £32,000 for maintenance and repairs.
When they checked further, they could find no trace of the business online or at Companies House or at the address given on the invoice.
They found VAT paid to companies not VAT registered, and unexplained employees on the payroll.
There were also questions raised about how Italia Conti’s contribution to Susan Jolley’s pension had increased from 33 to 58 per cent from September 2015 to February 2016, though her basic salary had remained unchanged. Worryingly, they learned that Susan had entered the threshold for student loan repayments incorrectly, meaning pupils were overpaying their repayments. In September 2017, a solicitor’s letter was sent to the trustees warning about the suspected misappropriation of funds when Anne Sheward was principal.
As investigations continued into the school’s finances, things took a sinister turn. Chris Pritchard claims that in October 2016 he was threatened by three men in a car who pulled him up on the M25. In a police statement, he says: ‘The driver said: “Chris, if you don’t stop the ******* investigation into my company I will kill you . . . You’d better stop investigating the company or you’re dead.” ’
It is not known who these men were, but Chris believes they were disgruntled contractors annoyed their Italia Conti cash cow was in jeopardy. Meanwhile, police were called in to investigate the school’s finances and financial controller Susan Jolley, her brother Roy, the buildings manager, and another member of the finance team, Bill Murdoch, were all fired.
Police confirmed: ‘We received an allegation of fraud alleged to have occurred at a performing arts school in London in November 2016. A woman and two men were arrested as part of the investigation but were all released with no further action. The investigation was closed in December 2017 due to insufficient evidence.’
However, Bill Murdoch, 59, took Italia Conti to an employment tribunal for unfair dismissal. Although he failed, the case shed even more light on the shambles of Italia Conti’s finances. An employment judge wrote: ‘The business of the Academy was often beset by cash-flow problems over the years, but deeper financial difficulties developed, becoming particularly acute in 2015.
‘The main causes were a decline in student numbers, a build-up in pressing repairs and maintenance work and the unwillingness of the bank to increase its lending.
‘By the summer of 2016 the Academy’s problems had reached a critical state.’
The judge added that the Riddingtons report ‘was seen as evidencing, at the very least, woefully ineffectual financial control over a substantial period.’
In response, the school points to its latest published accounts, showing it was on target to make a small profit. But the accounts include a worrying caveat, which draws attention to ‘weaknesses and failures in internal control procedures’.
It adds: ‘Certain expenditure included in the financial statements . . . may have been excessive.’
For the Sheward siblings, relations between Graham and his sisters is at rock bottom. Until the recent fall-out, they were close and would have Sunday lunch together, with Graham and Anne living next door to each other in Guildford, Surrey.
Now, they are no longer speaking, and there is bitterness and resentment on each side. ‘I used to get on with my sisters,’ says Graham. ‘Especially Sam. I went everywhere with Sam.’
The sisters have so far remained silent on the audit’s findings, although Gaynor, who lives elsewhere in Surrey, has reportedly previously accused her brother of attempting to blackmail them by threatening to ‘go to the papers’.
Meanwhile, Samantha’s husband Peter Newton said they had been advised by their lawyers to not comment.
Speaking from their £1million home in Guildford, he explained: ‘The lawyers representing the school have pretty much shut down any sort of comment because obviously there are ramifications for making the situation worse than it is.’
In a bid to try to help turn things around, Graham recently arranged for the Barbican site to be sold for £19 million and relocate the school to a new, combined site in Egham, but this was stopped by his sisters. Meanwhile, the academy is understood to be in the process of refinancing the bridging loan, and hopes to be successful.
Yet with the loan repayment pending, he does not believe the school should be accepting any more students as its future looks uncertain. He adds: ‘Italia Conti has had millions of pounds in public funds over the years. A lot of money has gone missing and I want to know where it is.’