London Capital and Finance

masonic

Sledger wrote: »

so where is the bulk of the 250 million gone.it has to be somewhere and surely FCA should be sourcing it . Maybe FCA or our authorities should set up a 1* sort of Ritz Carlton in Bodmin Moor, round them all up, keep them isolated and detained for months until the money comes back. All those Princes coughed up and keep very quite about the regime and have not heard any western criticism to this method of retrieving corrupt money .

It's still very early for rounding people up. However, it wouldn't be surprising if one of the work streams being followed by the FCA is the potential for criminal charges to be filed.

If their investigations demonstrate the money and/or assets supposedly used as security have disappeared, then LCF will be placed in Administration, and hopefully the FCA will appoint Administrators / Liquidators, although this is typically the privilege of the largest creditor. One of the jobs will be to follow the trail and determine whether or not the directors of the company acted in the best interest of the creditors, and if not then a case can be made for lifting the veil of limited liability, which would see the directors personally liable. Of course, they could continue to frustrate the process by disposing of their personal assets. The question of whether such action could be extended to the web of companies that were lent the money remains to be answered. I wouldn't expect this to be a swift process, and no doubt every effort to frustrate the process will be taken.

Malthusian

masonic wrote: »

It's still very early for rounding people up. However, it wouldn't be surprising if one of the work streams being followed by the FCA is the potential for criminal charges to be filed.

I don't know about surprising but it would be unusual.

Issuing misleading financial promotions is in itself not a crime, it's a regulatory breach.

Even if LCF eventually collapses and loses investors' money, running a failed investment is also in itself not a crime.

As Masonic suggests, finding out where money is gone in an unregulated investment is not usually the FCA's problem. The clue is in the word "unregulated". This investigation started with the LCF's marketing materials, which are regulated, and - all speculation aside - it could yet finish with them.

I would not be surprised if the FCA eventually washed its hands of it and left investors twisting in the wind as they did with Park First. Finding out where the money went would be (as Masonic alludes to) the job of an insolvency practitioner in the first instance.

bail-in

A wholesaler is an intermediary entity in the distribution channel that buys in bulk and sells to resellers rather than to consumers. In its simplest form, a distributor performs a similar role but often provides more complex services. Distributors and wholesalers often work together as channel partners. Wholesaling has also become a retail business model. Note too, that while the most common type of wholesaling is between manufacturers and retailers, an increasing number of wholesalers sell to other wholesalers. A wholesaler may also sell materials to make goods, buying them from one manufacturer and selling them to another.

The LCF commercial lending certainly looks like the short term asset secured Wholesale Lending model. But then the discussions here in this daniel80 LCF thread disclosing the past shared company directorships and no corporate activity by those lenders borrowing from LCF is suspect in this Wholesale Lending model of LCF. However, the interest to bondholders was paid and principal was repaid in full at end of term when requested. So that income must be seen, at least in the previous years' Annual Accounts.

LCF describe themselves as a direct lender which does not appear to be accurate.

From Wikipedia, the free encyclopedia. Direct lending is a form of corporate debt provision in which lenders other than banks make loans to companies without intermediaries such as an investment bank, a broker or a private equity firm.

In LCF lending there is no direct lending but rather a wholesale lending intermediary network of director related lenders of the LCF commercial loans. Perhaps the illusive lending team they keep referring to. So the lending flow chart is: primary wholesale lender > intermediary lenders > commercial borrowers. This is NOT the commercial lending business structure touted to investors and is quite different from the LCF flow chart of the lending business.

Also refer to:
https://forums.moneysavingexpert.com/discussion/comment/75314883#Comment_75314883

More info in the links below about non-bank wholesale lending (commercial not consumer):

https://www.bridgingloans.co.uk/news/introduction-wholesale-lending/

http://www.nortonrosefulbright.com/knowledge/publications/125777/non-bank-lending-focus-on-the-uk-market

http://www.cmgfi.com/news/read/what-is-wholesale-lending?channel=corporate

https://www.shawbrook.co.uk/business/finance/structured-finance/wholesale-finance/

https://www.fca.org.uk/enforcement-annual-performance-account-2015-16/4-wholesale-conduct

https://www.investec.com/en_gb/intermediary-lending/finance/wholesale-lending.html

https://www.thisismoney.co.uk/money/news/article-4191998/Peer-peer-lending-risky-private-individuals.html

https://ftalphaville.ft.com/2017/02/08/2184050/an-end-to-the-nascent-p2p-wholesale-lending-market/

https://www.ratesetter.com/blog/article/an-update-on-wholesale-lending

jimjames

Sledger wrote: »

so where is the bulk of the 250 million gone.it has to be somewhere and surely FCA should be sourcing it

Well I've identified nearly £100 million of it and I'm just an average Joe investor so I suspect that FCA with access to the full books would know.

You do realise though that it's an unregulated investment so it's nothing to do with FCA to actually recover the money?

Malthusian

jimjames wrote: »

Well I've identified nearly £100 million of it

No offence to your detective skills but no you haven't. You identified that £100m went from LCF into various companies in the LCF network at some point, possibly several years ago. What investors want to know is where that £100m is now. Only LCF's directors know the answer to that.

jimjames

Malthusian wrote: »

No offence to your detective skills but no you haven't. You identified that £100m went from LCF into various companies in the LCF network at some point, possibly several years ago. What investors want to know is where that £100m is now. Only LCF's directors know the answer to that.

Absolutely. Yes, sorry if that wasn't clear I was working on the "went" question - the initial destination of approx £100m was shown in the accounts. Any work involving historic accounts is clearly by it's nature looking at the past and the position could definitely have changed by now. The fact that the accounts have been repeatedly delayed could suggest that it could be significantly different.

In terms of where the money has gone, it's also possible that 8% pa of the funds has already been returned to investors as their annual interest. They just wouldn't know if it was their capital being returned or money received as interest from loans.

masonic

Malthusian wrote: »

I don't know about surprising but it would be unusual.

Issuing misleading financial promotions is in itself not a crime, it's a regulatory breach.

Even if LCF eventually collapses and loses investors' money, running a failed investment is also in itself not a crime.

As Masonic suggests, finding out where money is gone in an unregulated investment is not usually the FCA's problem. The clue is in the word "unregulated". This investigation started with the LCF's marketing materials, which are regulated, and - all speculation aside - it could yet finish with them.

I would not be surprised if the FCA eventually washed its hands of it and left investors twisting in the wind as they did with Park First. Finding out where the money went would be (as Masonic alludes to) the job of an insolvency practitioner in the first instance.

I agree with all of that. The lending business is, if I understand correctly, regulated. So there is potential for the FCA to look into that, and if it turns out to be a means of laundering and stealing investor money, then that would be a crime - not that pursuing criminal charges would help rescue investor money.

masonic

jimjames wrote: »

In terms of where the money has gone, it's also possible that 8% pa of the funds has already been returned to investors as their annual interest. They just wouldn't know if it it was their capital being returned or money received as interest from loans.

and on the "LIFO" basis the remaining debt might be considered by a court to be partially irrecoverable to the extent that monies have been repaid.

Aretnap

Here's someone else who has some of LC&F's money - Atlantic Petroleum. Or at least it has some of London Oil and Gas's money, most of which is borrowed from LC&F. Atlantic Petroleum is a Faroese company, listed in Oslo and Copenhagen, with a market cap of 24 million Danish Krone (about £2 million). As of LOG's last accounts (made up to May 2017) they'd advanced just under £1 million to Atlantic, out of a potential £8 million made available.

Doubtless a high risk type of company to invest in (Exhibit A - Atlantic's share price over 5 years; the company looks to have been in a "distressed" state at the time of the loan), but interesting that at least some of the money is being lent out, albeit second hand, to actual listed companies. How much benefit LC&F's bondholders eventually get from that remains to be seen of course...

Sledger

If the FCA had not intervened they would have been paying out 5 million min of quarterly interest in January on this 250 million ( excluding maturing bond paybacks) Dare I say it, HMRC would have got 20% in tax on this 5 million so are they also a victim. Interesting what the values were in the previous quarters since the last audited accounts as LCF funds were growing exponentially and what if any tax was paid. How come HMRC don't get involved in Companies House and scrutinise delayed accounts ploy. Will HMRC get involved in this maize of companies to recoup unpaid taxes. and do FCA alert HMRC