The Serious Fraud Office [SFO] are investigating the firm and arrested four men in relation to the collapse last month, which has raised fears that £236million invested in the company has been lost.
On Tuesday, administrators said that millions of pounds invested by customers has ended up in the personal possession or control of four men, including former Tunbridge Wells Conservative Party Chairman, Simon Hume-Kendall.
Administrators, Smith & Williamson, who have finalised their report into the now-defunct investment firm, said yesterday: “There are a number of highly suspicious transactions involving a small group of connected people which have led to large sums of the bondholders’ money ending up in their personal possession or control.
“We are pressing these people to return those funds to us for the benefit of the bondholders and, failing this, we will pursue those individuals, as appropriate, for recovery of those sums.”
The administrator’s report names not only Mr Hume-Kendall, the owner of London Oil and Gas—LCF’s biggest borrower, which has also now fallen into administration, but also LCF chief executive, Andy Thomson; Elten Barker, partner to Hume-Kendall at London Oil & Gas, and Spencer Golding, an equestrian business owner who received more £12million from LCF.
Administrators have not yet commented on whether the actions of the four men were unlawful, and it is not yet clear if these are the same four men arrested by the fraud squad in connection with the firm’s collapse as reported in last week’s Times.
However, it is believed that Mr Thomson and Mr Hume-Kendall have agreed with Smith & Williamson to pay what they received into an escrow account for the bondholders. The funds will be returned only if the original bondholders get all their money back from LCF assets.
However, administrator at Smith and Williamson, Finbarr O’Connell, said that he believes bondholders may only ever get back 20 per cent of their underlying investment.
LCF collapsed in January, following the freezing of the firm’s bank accounts due to the marketing of the unregulated mini-bonds, which were offering returns as high as eight per cent.
In total, 11,600 customers invested more than £236million in the mini-bonds, none of whom can turn to the UK’s Financial Services Compensation Scheme because unregulated products are not usually covered.
Many of those who risk losing their investments include retirees or first-time investors.
