Is this ‘lord‘ to blame for the biggest savings scandal for 30 years?
With his fast-living associates, he promised huge returns to small investors — then poured vast sums into their own luxury lifestyle firms. The problem? It was a house of cards that’s left thousands of trusting clients penniless
AMONG the throng of celebrities, models and socialites at Victoria Beckham’s Christmas party in her Mayfair fashion store, Simon HumeKendall looked every inch the successful City financier.
Sipping champagne and munching nibbles supplied by the private members’ club Harry’s Bar, the businessman chatted merrily under the tree with TV etiquette expert and family friend Liz Brewer. His smiles suggested he hadn’t a care in the world. A few days later, he and his wife Helen saw in the New Year with an extravagant soirée at their opulent home.
However, whether the couple are still on London’s hottest guest lists is not certain. For behind the façade Hume-Kendall presented to the world, City watchdogs and the Serious Fraud Office were rapidly closing in on him and his convoluted financial dealings.
Before January was out, administrators had moved in at London Capital & Finance (LCF), a firm with which he is heavily involved after founding its predecessor in 2012.
As he and his third wife Helen, who was not involved in any matter under investigation, revelled in their millionaire lifestyle of yachts,
mansions and horses, investigators were uncovering the devastation he had left in his wake. What they have found so far is galling: more than 11,000 victims are at risk of losing a combined £237 million of their savings.
It soon emerged that Hume-Kendall, 65, is a major kingpin behind the biggest savings scandal to hit this country since the infamous Barlow Clowes affair. Thousands of victims lost their nest- eggs when that investment company collapsed in 1988.
Particularly worryingly, the actions of HumeKendall and his associates raise difficult questions tions for the watchdogs: why the Financial Conduct Authority, which regulates the country’s 58,000 financial services firms and financial markets, failed to thwart the scandal.
even before the revelations, it was clear that Hume-Kendall lived by his own set of rules. Take, for example, his claim to being a member of the aristocracy.
On more than one occasion he appeared to style himself as the Lord of Aldeburgh — intimating to one admiring interviewer that he is too modest to use his title except when it helps with his charitable work.
Yet for all his claims to nobility, Burke’s Peerage, the definitive guide to such matters, contains no mention of a ‘Lord of Aldeburgh’. Sources close to Hume-Kendall claim he gained the right to the title after buying land and has never used it.
A relatively trivial vanity, perhaps. But one that will further enrage LCF’s innocent customers, most of whom were hard-working middleclass professionals and pensioners who had been taken in by its promises of high returns.
Indeed, the paper trail unearthed by administrators leads back to 11,500 people who have each lost thousands of pounds, with scant chance of getting much of it back.
One victim was Amanda Cunningham, 50, who desperately wanted to provide for her autistic son. She lost £22,000 — her entire life savings.
‘What happened is terrible. I feel used by people who exploited my trust,’ she said.
Another LCF investor, Derek Watson, transferred £12,000 he had saved up for his daughter into LCF, hoping the returns would fund her through university. But now his hardearned money has vanished.
Gordon McKenzie, from South Yorkshire, invested £10,000 in LCF last November. He said: ‘ This has caused me much distress and heartache. To witness what these people have been spending our money on makes it even more galling.’
Regardless of whether he is a lord, Hume-Kendall was certainly born into a privileged background.
THE young Simon and his two brothers — Julian, now 63, who chairs a fitness company, and Rupert, 57, a respected City banker — went to Holmewood House prep school, near Tunbridge Wells, Kent.
After leaving, Hume-Kendall went on to £12,775-a-term Radley, a boys’ boarding school in Oxfordshire, and then to King’s College London, where he studied history.
A small bit-part in the 1971 film The Go- Between, starring Julie Christie and Alan Bates, did not lead to an acting career — and instead, he went to Lloyd’s of London,.
Hume-Kendall’s time in the Square Mile was eventful to say the least.
He once threatened to sue for libel novelist Jeffrey Archer, one of whose stories, The Steal, included a fictional swindling scrap metal merchant called Ray Kendall-Hume.
The real-life Hume-Kendall was friends with Archer’s then mistress, Andrina Colquhoun, and believed the author invented the character because the former Tory deputy chairman wrongly thought he, too, was having an affair with her.
Hume-Kendall said he was upset by the ‘oblique reference’, reference ’erence, implying: implying:im ‘I was defrauding customs, t which hi h is i something I never would have done.’ In the end, he did not sue.
Meanwhile, he was reaping success in the boardroom — playing a central role in the increased popularity of english wine by helping to launch the award-winning Chapel Down vineyard in Tenterden, Kent.
He was also chairman of a company that took over the Daily Sport in an unusual transaction which saw the down- market newspaper pay a £1 million fee to a separate business with which he was also connected.
BY
THe mid-2000s, however, he had left the City saying he wanted to spend more time with his three young sons, now in their 20s.
Unable to stay away from the world of finance, though, Hume-Kendall embarked on a number of businesses in Kent where he appeared to be a pillar of the local community.
He gave £60,000 to the Tories and was once chairman of the Tunbridge Wells Conservative Association. Last year he gave £5,000 to the Sussex constituency of Cabinet minister Amber Rudd, which has, in light of his controversial dealings, since returned the cash.
He owns a home near Tunbridge Wells, surrounded by formal gardens, with an eight-seater outdoor hot tub and stabling for horses.
And pictures on social media showed him luxuriating with friends on board his yacht in the South of France last summer.
Yet the contrast between this lifestyle and financial dealings now being probed leaves a bitter taste.
Hume-Kendall set up the forerunner of LCF and subsequently transferred control of it to his former employee Andy Thomson, 46, in 2015. It was ultimately renamed London Capital & Finance in 2015. But his involvement did not end there.
Along with their associates Spencer Golding, 49, and elten Barker, 46, he and Thomson are accused by administrators of using savers’ money to bankroll their own ventures.
Investigators discovered a tangled web of lending whereby millions of savers’ cash was funnelled through LCF to companies largely owned by or connected to Hume-Kendall.
This includes a total of £155 million lent to an outfit called London Group owned by him and Barker. That firm then lent the money to other companies, some of which were also owned by the duo.
Roughly £12 million, for example, was handed to a development of the Paradise Beach Resort on the Cape Verde island of Sal — the benefits of which were potentially reaped by more than one of those under investigation. The project was due to feature nine swimming pools, 732 apartments and 16 shops.
The administrators at Smith & Williamson say bluntly: ‘ We are highly suspicious of this transaction.’
A separate £70 million was lent to three other holiday developments also owned at the time by HumeKendall, Barker and Thomson — two in the Dominican Republic and another in Cornwall. These were sold to new owners in 2017.
On top of that, administrators
suspect that more than £10 million was loaned to Spencer Golding and then transferred to a new equestrian centre called FS Equestrian Services, where Golding was a ‘company patron’.
Another loan of £840,000 of LCF savers’ money was also used by Andy Thompson to buy a helicopter, which administrators are now trying to sell. Savers were under the impression their money was going into hundreds of companies, which they assumed would reduce the risk to their investment.
The firm seems to have skilfully appealed to people who had endured years of low interest rates from banks and building societies.
The returns on offer from LCF — eight per cent — must have seemed irresistible. And on the face of it, LCF’s claims were convincing.
It said it was able to reap high returns by putting cash into ‘minibonds’ — IOUs issued by small companies that need to borrow — which are popular and legitimate investments. These firms pay back the loan after a set period, typically after three to five years, plus interest paid annually. The rates are high because there is a real chance such firms will default on their debts.
Now there is little chance the innocent investors will see their money again. The administrators have said that despite offers from Thomson and Hume-Kendall to pay money which could potentially be used to reimburse bond holders, nothing has been received.
And last week, investors were told to register with the Financial Services Compensation Scheme, which is exploring ‘ possible grounds for compensation’. Meanwhile, Tory MP Johnny Mercer has also been caught in the spotlight cast by the LCF fall-out.
LCF’s bonds were marketed by a company called Surge which is associated with entrepreneur Paul Careless. Surge took as much as 25 per cent of savers’ cash in fees, or £58 million in total.
The MP is an £85,000-a-year nonexecutive director of the Crucial Group, another firm owned until last month by Mr Careless, which trains veterans in cyber security.
Accounts show money moving between Mr Careless’s marketing firm Surge Financial and its parent firm, Surge Group. Surge Group loaned a sum of money to Crucial.
Mr Mercer — who is not accused of doing anything wrong and is not under investigation — says that as soon as the loan from Surge was discovered, it was re-paid and he was assured that ‘at no stage was capital used from any business with LCF, in Crucial Academy’.
The investigation into LCF isn’t over. Smith & Williamson said its transactions ‘resulted in multimillion pounds of (savers’) monies going into the personal possession or control of Simon Hume-Kendall; Elten Barker; Andy Thomson; and Spencer Golding- related trusts or interests’.
It is ultimately for the Serious Fraud Office to decide who is at fault. But Simon Hume-Kendall’s grand lifestyle looks likely to crumble, along with the hopes of the savers whose trust in him has cost them so dear.