Connaught operator facing £100m FCA order
The Financial Conduct Authority (FCA) is considering whether to slap a £100 million order on the operator behind the collapsed Connaught bridging fund
The Financial Conduct Authority (FCA) is considering whether to slap a £100 million order on the operator behind the collapsed Connaught bridging fund.
Outsourcing giant Capita is facing the order from the Regulator after investors lost some £70 million.
The Connaught Income Fund Series 1, operated by Capita until 2009, was suspended in 2012. The fund had invested some £118 million with bridging lender Tiuta during the fund’s existence.
Investors claim Capita knew, but did not inform them, of the situation which allegedly saw Tiuta use investors’ money to make loans outside the terms set within the bridging fund.
Tiuta Plc became the specialist partner to the Connaught Income Fund Series 1 back in 2008, but on May 21st 2012 Tiuta and Connaught parted ways.
Commenting on Tiuta’s decision to gradually discontinue its ties with the Fund, Mike Davies, Chairman of Connaught, commented at the time: “We understand the commercial benefit, to Tiuta, of its decision and our objective now is to ensure a process is developed for our funds that is in the best interests of our investors.”
On September 21st 2012, Tiuta entered into administration, which Steven Nicholas, former Director of Tiuta Plc, had said: “Following the administration of Tiuta International as the principal lending arm, a decision has been taken with reflection and approval of the FSA to place Tiuta Plc into administration.”
Victims of the Connaught Income Fund scandal are pressing the FCA to issue a ‘restitution order’ forcing Capita to make good investors’ losses. They allege that Capita did not do enough to blow the whistle about concerns it had over abuses and shortcomings in the fund’s operation.
An FCA spokesman said: “Although the Connaught Funds are outside of our regulatory scope, we have nonetheless continually monitored their situation’.
“Since issues with the Connaught Funds came to our attention, it has been high on our agenda and we have assigned significant resources to it.”
Keywords: Connaught, Capita, Tiuta, fund, bridging lender, bridging loans, investors, funds, FCA, investigation, £100m fine, monitoring