A winding up application for an island-based trust and corporate services firm will be first heard in the high court later this month.

The high court appointed a receiver and manager to Montpelier (Trust and Corporate) Services Ltd last October. Inspectors were also appointed to investigate the company’s affairs.

The regulator, the Financial Services Authority, applied for the appointments in the public interest, alleging that millions of pounds of clients’ money were paid to companies beneficially owned by Montpelier’s managing director Edward Watkin Gittins.

The company appealed against the court’s decision to appoint a receiver, manager and inspectors but the Appeal Court last week ordered that the appeal be dismissed.

Earlier this month, Montpelier sought to abandon its appeal.

But the Appeal Court said the appeal had the ’improper purpose of buying time’ and there could be no credible reason for the ’11th hour volte-face’ other than the appellant knew it would fail.

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Now the Financial Services Authority has applied for the company to be wound up. The regulator’s claim will be first heard in the high court on Thursday (February 20).

Creditors wishing to oppose or support the winding up can appear at the hearing in person or via their advocate, but must give notice of their intention to do so by 6pm tomorrow (Wednesday).

Pending the appeal, the manager, receiver and inspectors remained in place and Montpelier, registered at Palace Road, Douglas, continued to be licensed to conduct corporate and trust services.

The FSA alleged that the diversion of millions of pounds of client monies funded Mr Gittins’ lifestyle and that of his wife and children.

This was in ’breach of fiduciary duties’ and a ’clear conflict of interest’ to Montpelier’s clients, it claimed.

But Mr Gittins argued that the FSA’s claim was ’misconceived’, and was ’lacking in credible or any substantive evidence and proportionality and objectivity’.

In relation to diversion of investors’ money, he said there was nothing unusual or untoward as almost all the investors have been paid.

He insisted that client monies were paid ’by way of loan’ to Bayridge (Isle of Man) Ltd and not to any other company.

He denied he was beneficial owner of BIOM and said allegations of serious failings of fiduciary duty, governance and record keeping were not true.

But the FSA alleged that millions of pounds of client monies subject of so-called ’loan’ agreements with BIOM were in fact paid to at least two other companies owned by Mr Gittins. Millions of pounds of client monies were paid to Delaware-based Bayridge Investments LLC, beneficially owned by Mr Gittins, after it was cancelled from the US state’s register of companies in 2014.

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Montpelier, via its client structures, also paid millions of pounds of client monies to Barbados-based Montpelier Insurance Company Inc, again beneficially owned by Mr Gittins, after it ceased trading in 2011.

The FSA argued: ’Either the defendant repeatedly paid millions of pounds of client monies to the wrong "borrower" and the wrong bank account over a prolonged period of time and was unaware of these repeated errors (which is a serious breach of fiduciary duty, serious failure to maintain proper records and serious failure of governance) or it has intentionally misled the authority as to the true recipient of millions of pounds of client monies.’

The regulator had concerns regarding Montpelier’s finances since 2014.

Ordering the appointment of a receiver, manager and inspector, Deemster Mohammed Khamisa QC said it was ’necessary, proportionate and entirely justified in the public interest’.