<
p>Two Directors of Connaught Asset Management LTD (CAM) have been disqualified for a combined 16 years after allowing another to misuse investment funds of up to £106 million.
Nigel Walter of Medstead Hampshire was banned for nine years and Michael Davies of Radstock, Somerset for seven years and both cannot control or manage a company without leave of court.
The largest fund CAM managed had investors totalling £106m which primarily loaned money to bridging lender Tiuta International. However the lender was placed into liquidation in December 2012.
Neither of the banned Directors disputed that it CAM failed to review the progress on each bridging loan by Tiuta with monies borrowed from the fund or that it ensured that all money was repaid to the fund following loan completion.
These failures from the Directors consequently caused the fund to suffer losses due to Tiuta failing to pass on at least £23 million to the fund sourced from redemptions which it was contractually obliged to.
Also Tiuta retained at least £3.4 million from the fund for loans that it did not actually advance.
CAM became aware of the problems with Tiuta’s loan book in March 2011 however the true position was not established.
It was found that CAM then consistently failed to prevent Tiuta retaining redemptions and repaying funds for loans that did not proceed, around £12 million was lost at this point.
Joanne Covell of the Insolvency Service’s Outsourced Investigations team who conducted the investigation said CAM failed to protect the investors in the fund.
“CAM failed to protect the investors in the fund as it should have done and the amounts lost by private investors as a result of CAM’s failings were substantial,” she said.
“These lengthy bans for the Directors responsible for CAM’s failings reflect the seriousness of those failings and the robust stance the Insolvency Service will take against those whose conduct falls below accepted commercial standards.”
CAM managed a number of fund sold as investments to the public via IFAs, when it was put into administration in September 2012 it owed around £34 million to creditors.
Two Directors of Connaught Asset Management LTD (CAM) have been disqualified for a combined 16 years after allowing another to misuse investment funds of up to £106 million.
Leave a comment