19th December 2014
Two directors of Connaught Asset Management have been disqualified as directors after they allowed the misuse of £106 million invested in the funds by consumers.
An investigation by the Insolvency Service found Connaught chairman Michael Davies and director Nigel Walter revealed they oversaw a number of failings that helped lead to the collapse of the fund.
Davies has been banned from being a director for nine years and Walter for nine years. The men cannot control of manage a company without leave of the court.
Connaught managed a number of fund, including the Connaught Series 1 funds, which had £118 million invested in it when it collapsed. The fund was sold to members of the public through financial advisers but was placed into administration in September 2012, with £34 million owed to creditors.
The fund invested in Tiuta, a bridging loan company, but the Insolvency Service found the directors had failed to review the progress on each loan made by the company with the money form the fund and also failed to ensure the money was repaid to the fund following the completion of loans.
Tiuta receive the money but failed to pass on the payments to the fund.
Connaught because aware of a problem in March 2011 but still failed to establish the position.
Joanne Covell, head of investigations at the Insolvency Service, said: ‘Connaught Asset Management failed to protect the investors in the fund as it should have done and the amounts lost by private investors as a result of Connaught’s fialing were substantial.
‘These lengthy bans for the directors responsible for Connaught’s failing reflects the seriousness of those failing and the robust stand the Insolvency service will take against those whose conduct falls below accepted commercial standards.’
The Treasury also confirmed Connaught is being looked into by law enforcement agencies.