London Capital and Finance

masonic

This is all very reminiscent of a P2P insolvency I have been involved in. The company appointed its own, very sympathetic Insolvency Practitioner, as Administrator. This Administrator quickly released a report and proposals that suggested everything was in order and that he had received an offer that would see investors claims satisfied for 100p in the pound.

What happened? The FCA challenged the appointment of the Administrator in the High Court and had him replaced. The replacement firm was rather more thorough, a lot more pessimistic, suggesting that only a minority of borrowers were continuing to make repayments, and identified a lot of problems that were seemingly swept under the carpet by the previous Administrator.

jimjames wrote: »

The biggest red flag to me was that LCF had 11 borrowers in 2017 when the loans totalled £60 million. With the current total at £236 million there are only 12 borrowers which means that existing ones have been lent significantly more money rather than spreading the risk across more companies.

It's almost as if these borrowers viewed the loans from LCF as a source of free money and made as much use of available funds to leverage their businesses as possible.

Thinking back to previous discussion about how the 20% commission could have been paid to the introducers, I've pondered this and reached the conclusion it must have been paid out of retained interest.

Catrina777

Can I skl, what was the outcome for the investors in the p2p lending case you mentioned

masonic

Catrina777 wrote: »

Can I skl, what was the outcome for the investors in the p2p lending case you mentioned

It's been almost a year since the P2P lending firm I mentioned above put itself in Administration and about 6 months since the last of the loans it made became repayable. We're expecting an update in the next few months and it's anticipated that an initial distribution of repaid and recovered monies will follow some time later this year (nothing has been returned to investors so far). It is still unclear how much will be recovered. Personally, I mentally wrote it off as a 100% loss, so will be pleasantly surprised by any money I do get back.

Sledger

what have the FCA actually been doing since early December? I have just written them this but don't expect to get a response other than the standard non informative reply.

please pass this on To UPPER Management


The FCA have now been reviewing LCF for almost 8 weeks and one would have expected you to have identified what is in red italics

"According to their 2017 accounts LCF had 11 borrowers and loans outstanding of £58 million. As of January 2019 they still only had 12 borrowers but a massive £236 million of loans made. This means that the average loan per company has increased from £5 million to almost £20 million in that time."

Somebody who does not have access to the loan books has identified in blue italics below . where the full article on the 13 companies is in this linkhttps://damn-lies-and-statistics.blogspot.com/2019/02/london-capital-finance-borrowers-loans.html

One assumes the FCA privy to the books should have identified this as a concern. some considerable time ago
Qoute
I've been able to identify the companies that have charges on their accounts in favour of London Capital & Finance. Many of these companies are quite new so are not required to submit accounts, have failed to file on time or have used the London Capital & Finance account period trick to avoid submitting their accounts to Companies House when required. This means that for those companies we are unable to see how much they have borrowed from LCF but we do know that on average the amount is nearly £20 million per company. You'll notice that there are 13 companies in the list below so one may have repaid their loan after their last accounts were filed. As some accounts are seriously delayed there may have been significant movement in that time.

It's pretty shocking that LCF were prepared to lend to a new company only a few days old as well as another company that has never traded in the 5 years it has been in existence. Full details of each company are below:

I have just listened to the BBC Money box with the Paul Lewis and the administrator who portrays a very promising picture as positive in terms of getting some or all of our money back. The 12? companies are all solvent, the bonds are assert backed and all the 230+ million leant out is accounted for. THIS HAS BUILT HOPE UP TO 14000 INVESTORS BUT LOOKS UNLIKELY WHICH THE FCA SHOLUD BE IN A POSITION TO KNOW??? MOST OF THESE PEOPLE ARE OLD AND VUNERABLE WITH THEIR LIFE SAVINGS AT RISK. IF THE FCA KNOW THIS TO BE TOTALLY INCOORECT THE FCA HAS A MORAL DUTY TO PUBLISH THE TRUE SITUATION AS THEY HAVE BEEN KEPT IN THE DARK NOW FOR 8 WEEKS AFFECTING THEIR HEALTH

The administrator was appointed by LCF and we understand endorsed by the FCA . There is a Q mark over a conflict of interest between LCF and the administrator and a LCF Action Facebook group is trying to obtain verification.

MSE forum has posted in green italics which echoes the issue ( Copied JIM JAMES 910 post)

Another MSE forum posted this (Copied Masonic 912 post)

It would appear there has been no dialogue between the FCA and the Administrator, Surely the FCA findings should have been briefed to the administrator to fast track this as the delay allows more funds to be filtered away and not recovered. Very unsatisfactory situation as I thought the FCA role was to do whatever possible to recover Bond holders money and act in the bondholders interests . I suggest you read recent MSE forum 1 Feb on the plight and flight of this money . CAN YOU AT LEAST SIMPLY CONFIRM YOU READ MSE FORUMS TO SAVE ME COPY AND PASTING

masonic

You are unlikely to get any information out of the FCA in relation to an ongoing investigation.

It is likely that the FCA is aware of this thread. In the case of the P2P firm I mentioned above, the FCA learned that the firm had put itself into Administration by monitoring a thread in the P2P Independent Forum.

Remember that the FCA consented to the LCF Administrators being appointed, so it is unlikely this appointment will be challenged, at least in the short term. It is so early in the process that the Joint Administrators may well adopt a less optimistic view as they delve further into the web of connected companies and gain a greater understanding of the loan business.

But if you think the FCA would have unearthed something significant in their investigation that will crack this case wide open, let me refer to these sage words from a few months ago:

Malthusian wrote: »

Those who can, do. Those who can't do, teach. Those who can't teach, steal. Those who can't steal, regulate.

jimjames

Interesting digging into the companies that LCF have lent money to and their history.

Some investors still seem to believe LCF when they said that they put directors on the board of borrowers to explain away the commonality of directors. If their director is the sole director then that means they're running it completely, not an observer. This is the case with several borrowing companies.

LCF claimed that they only lent to companies after a detailed review and 3 years worth of accounts. Out of 14 companies with a charge applied in favour of LCF, 12 of them are under 3 years old and 9 of them are brand new with less than a year of existence.

A number of bondholders are still quoting that LCF say no borrowers have defaulted and all loans are being paid. In view of the other misleading information they have given I would be extremely sceptical about those statements.

https://damn-lies-and-statistics.blogspot.com/2019/02/london-capital-finance-borrowers-loans.html

It does make you wonder what the FCA have been doing unless they are aware of this information in which case why did they not appear to brief the administrators? Or do they have to investigate criminality separately?

Jelli wrote: »

I wish I could remember where I read things, but someone in the Admin said that was a mistake.

I'd heard something similar but it doesn't inspire confidence if they're making very public statements that are incorrect and not checking first especially when it contradicts FCA last week.

bail-in

Looks like the non-bank lending debt crisis since the 2008-10 financial crisis is getting a lot worse over the pond than here according to a recent FT article.

Non-bank lending thrives in the shadows:

https://www.ft.com/content/4610e820-1b09-11e9-9e64-d150b3105d21

EdGasketTheSecond

Link doesn't work without an account at FT

billyolly

I wounded what people think about the 2 LFC Facebook groups?
The bond holders seem to say keep calm and carry on the Action Group don’t seem so positive and seem to be lead by some one from a claims management company.
I personally like a lot of the information on this site ,I don’t feel confident that I will be much of my money back.

eskbanker

EdGasketTheSecond wrote: »

Link doesn't work without an account at FT

The FT makes its content accessible from Google (other search engines are available), so if you search for the article title it provides a link that can be accessed by non-subscribers, despite apparently using the same URL....