Savers lose £1.5m in ailing Liverpool care home scheme

Investors who bought rooms in a Liverpool care home have lost close to £1.5m, after the scheme that promised high returns nearly collapsed.

They will now receive 75p for every £ 1 invested in the 74- bedroom Oak Springs development, Telegraph Money understands, following the sale of the business to Sandstone Care Group earlier this month.

Emails from sources close to the deal, seen by this newspaper, said the business was barely breaking even on its operating costs and would “have been in administration within weeks”. Investors would have been left with virtually nothing, had the acquisition not gone through.

In 2014 investors paid about £80,000 per unit on the promise of 10pc returns a year. However, the business was only ever able to yield up to 6pc before payments began to dry up.

Investors said the ordeal had left them stressed and without income they had counted on. Some feared they would lose everything.

Elliot Lawless, the project’s developer, was arrested in 2019 on allegations of fraud. The arrest was part of a broader Merseyside Police investigation, into alleged corruption relating to building contracts in the city, called Operation Aloft.

A number of other men including Liverpool’s Labour mayor Joe Anderson have also been arrested, although no charges have been brought.

Mr Lawless has fiercely maintained his innocence throughout, insisting that the allegations were “baseless” and “completely without foundation”.

The warrants used in his arrest were deemed to be unlawful and were quashed in the High Court.

Mr Anderson has said: “I maintain the police investigation will prove I have done nothing wrong and my name and reputation will be exonerated.”

A spokesman for Mr Lawless said he could not comment for legal reasons relating to the deal.

A spokesman for the new owner Sandstone said the company had no involvement with previous funding arrangements.