The Daily Telegraph - Your Money

Savers lose £1.5m in ailing Liverpool care home scheme

- Harry Brennan

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.

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