INVESTORS were kept in the dark about the financial affairs of an Isle of Man-incorporated investment fund which is unable to pay its multi-million pound debts, a liquidators’ report reveals.
Regulator the Financial Supervision Commission is being urged to wind up the Louis Group Structure Fund in the interests of investors and the Manx public.
Liquidators from PricewaterhouseCoopers say their findings will ‘no doubt cause high levels of concern’.
In their report, made public following a court ruling, they say the company, based at Louis Buildings on Bucks Road, Douglas, ‘probably suffered an almost total loss of investor capital’ due to its exposure to LG SP Investments Ltd, an allied company registered in the British Virgin Islands, which they say appears to have been engaged in unlicensed deposit-taking in the Isle of Man.
Liquidators say LG SP Investments Ltd was a recipient of £25m of the company’s assets but they found less than £100 remaining in its accounts.
They claim that information was ‘purposely withheld’ from investors by ‘those who knew the full facts about what was going on’.
The FSC first had concerns in the autumn of 2010 following information received from the company’s board.
Liquidators were appointed by the High Court in May this year to investigate the affairs of the structure of linked companies and to trace the whereabouts of sums totalling more than £5 million.
The Louis website says it runs its affairs to Christian values. Liquidators identified payments totalling £84,000 made by LG SP Investments to the Renewal Church in Stratford-on-Avon and they said it was another matter of concern if these payments were some form of donation to that church.
The company rejects the liquidators’ findings, with director Alan Louis saying they weren’t given the opportunity to comment in advance and that they will oppose the winding up hearing.