London Capital & Finance: 236m firm collapses [View all]

https://www.bbc.com/news/uk-england-47454328

London Capital & Finance: £236m firm collapses

By Tom Palmer
BBC News Online

9 March 2019

Thousands of people who invested in a high-risk bond scheme marketed as a "Fixed Rate ISA" fear they have lost everything after the company collapsed. London Capital & Finance (LCF), now in administration, took £236m following a marketing campaign that is now under investigation for mis-selling. Many were first-time investors - inheritance recipients, small business owners or newly retired.
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LCF paid an agent, Brighton-based Surge PLC, 25% commission - which amounted to £60m - to run the marketing campaign.
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In a letter to bondholders administrator Finbarr O'Connell said once the £60m to Surge was paid, returns of up to 44% would be required in order for LCF to make good on its promises.

Investors were told the funds - and therefore risk - would be spread across hundreds of companies but, according to Companies House records, LCF loaned money to 12 - four of which have never filed accounts, nine are fewer than three years old, and nine had loans from LCF in 2017.

Much of the cash was loaned to companies that then "sub loaned" to others. Bondholders have raised concerns about connections between the directors of companies that received money and those who ran LCF.
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