AT LAST! Watchdog barks and ‘loan note’ firm faces collapse
IT MAKES a nice change to be able to report an effective intervention by the Financial Conduct Authority that has led to the apparent collapse of a suspicious investment company.
In May, the FCA issued a public warning that Finco Group Limited, based in Berkeley Square, London, was not authorised to offer investments to the general public. Finco then added a statement to its website, saying it would only deal with wealthy individuals or investors who were experienced enough to understand they could lose all their money, and this was enough to sidestep FCA regulations.
But did this make Finco any less suspicious? Hardly. The company is run by Catherine Lyall, 40, from Bishop’s Stortford, Hertfordshire, and her name is enough to ring alarm bells. She and her partner both figured in Tullett Brown Limited, a scam investment company that I warned against in 2012 and which was wound up by the High Court.
Lyall’s partner Daniel Nwikpo, who has also called himself Dan Fox and Dan Jones, was banned from acting as a company director for 14 years. Investigators from the Insolvency Service found that Tullett Brown, with Nwikpo as one of its bosses, had raked in £1.6million by selling near-worthless carbon credits with the tale that investors were ‘virtually guaranteed’ to make profits of at least 50 per cent.
Against this background, I looked at exactly what Finco was offering. It turned out to be loan notes yielding up to 12 per cent, effectively IOUs that Finco claimed were backed by property developers. Finco’s website displayed a pleasant picture of new houses built at the side of a rural lake, and it assured potential investors that Finco had notched up ‘over 100 developments, successfully completed’. Not bad for a company that is just one year old.
I traced the lakeside houses to a development at the Cotswold Water Park, so I asked Lyall what role her company played in this, and where are the other 100 developments located?
She told me she had forgotten her website existed: ‘I didn’t realise the website was still up,’ she said. ‘I have now asked for it to be taken down.’
Lyall added that while she did plan to invite investments, she had not gone ahead with the scheme.
She did not explain the false claims on her website except to say that ‘the marketing images used were generic’ and would have been replaced. Finally, she told me: ‘Finco Group has never traded and is in the process of being closed down.’
Mission accomplished, FCA.