Savers lose £11m as care homes collapse

SCORES of pensioners have lost their life savings after backing a children’s care home business which promised vast returns, then went bust with nothing left.

Around 230 savers pumped £11m into failed business Gravity Child Care – nearly £48,000 each – after being told they could earn returns of 15pc a year.

But instead of growing their nest eggs, the business lost the cash and some may have been moved abroad.

Gravity Child Care planned to invest in up to 50 homes for children with mental and behavioural difficulties, raking in profits from the fees which councils pay to operators.

But administrators probing its collapse believe it bought only two properties worth £600,000 and opened one, catering for fewer than ten children.

Investors say they were repeatedly told their money was growing at an impressive rate. But, starting in 2015, statements were delayed and concerns were raised about what had happened to the savings.

When administrator Duff & Phelps was called in to investigate earlier this month, it discovered investors’ funds had gone.

There is now a paper trail leading to foreign countries. ‘There are no assets in the company,’ a source with knowledge of the proceedings said. ‘Money went to Dubai, and potentially to Sri Lanka.’

Gravity Child Care – the trading name of a company called GCC Management Ltd – was set up by nicola Fairweather in 2010 and targeted potential investors through doorstep marketing.

Its website is no longer online, but an advert in a Spanish expat magazine tracked down by the Mail shows it claimed to offer ‘some of the most exciting investments available’.

The business was described as an ‘exciting residential care service for children’ and offered ‘potential returns of between 11pc to 21pc per annum’. Most who put in cash were retired or close to the end of their working life, with small pension pots that they wanted to grow.

They were left with the impression that their money was performing well – but a statement published by administrators last month shows the firm has debts of £14.1m. Although around 30 investors are thought to have been repaid, the others are still waiting and are no closer to getting their cash back.

Duff & Phelps were called in when a pension firm which had invested customers’ cash realised something was very wrong. Liquidator Steven Muncaster said: ‘It is our belief that as much as £10m could be missing from investor funds. At this stage we are aware that only two properties were acquired, a vast majority of investors have not received the interest they were entitled to, and communication with the investors was scarce.’

Fairweather, 44, thought to live in Spain, has been a director or shareholder in more than 30 firms, with interests from healthcare to call centres and travel agencies. She did not respond to a request for comment.