Lord Razzall steps down as non-executive chairman of MJS Capital plc

A filing on Companies House reveals that Lord Timothy Razzall has stepped down as director of MJS Capital plc. MJS Capital plc offers unregulated bonds paying up to 9.85% per annum to fund investment in financial arbitrage.

Popularly known as “Lord Razzall of Dazzle”, Lord Razzall served as a director of MJS Capital from 19 May 2015 to 12 March 2018. He is described as non-executive Chairman in MJS Capital’s investment literature, and “responsible for scrutinising the performance of management in meeting agreed goals and objectives, in particular adherence to the investment policy and overseeing the correct and proper operation of the Security Fund”.

Lord Razzall remains a director of Barton Brown Limited, who wrote MJS Capital’s investment literature.

Under the heading and sub-heading “How the investment in the Bonds is protected”, MJS Capital’s literature states that the involvement of Barton Brown Limited and Lord Razzall in drafting the Information Memorandum means “Investment in the Bonds is directly protected” – in the sense that the involvement of Barton Brown Limited and Lord Razzall, along with their collective experience in corporate law, means investors can rely on the statements in the literature.

We reached out to Lord Razzall’s parliamentary office on Thursday for a comment on his reasons for leaving MJS Capital, but at time of writing have received no response.

Update 27 March 2018: By way of response, Lord Razzall has now provided us with a copy of his resignation letter to Shaun Prince, MJS Capital’s owner, which states:

The background to this is my concern about the effect I have as a politically exposed person on the company’s banking relationships.

This is a significant problem nowadays particularly for a company like MJS which is dependent on its banking relationships.

As you know I am happy to remain involved with the company as a consultant and advisor, but hope that my resignation as a Director will help with the banks.”

While Politically Exposed Persons are subject to a higher level of scrutiny when dealing with financial institutions, in itself it is difficult to see why having a PEP as director would cause problems for MJS Capital – particularly when you consider Lord Razzall was a non-executive chairman and did not exercise day-to-day control.

The FCA expects that a firm will not decline or close a business relationship with a person merely because that person meets the definition of a PEP (or of a family member or known close associate of a PEP). A firm may, after collecting appropriate information and completing its assessment, conclude the risks posed by a customer are higher than they can effectively mitigate; only in such cases will it be appropriate to decline or close that relationship. (FCA guidance FG17/6)