FCA freezes London & Capital Finance’s bank accounts; investors’ interest and capital repayments suspended

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The FCA’s ongoing investigation into London Capital & Finance took a more serious turn yesterday when the FCA revealed that it has placed the following restrictions on the company:

  • It may not (without the prior consent of the FCA) deal in any way with its assets, including the money held in its banks’ accounts.
  • It must cease conducting all regulated activity.

Around a couple of weeks ago the FCA ordered London Capital & Finance to remove all its marketing materials. The FCA has now announced:

that it is appropriate to publicise the fact of its investigation into LCF now, as a result of other public actions taken by the FCA and in anticipation of legitimate queries from investors regarding the firm.

The FCA is unable to say whether investors are likely to get their investment back at this stage.

Will I get my investment back?

The FCA’s work in relation to the firm is ongoing, but it is aware that investors are keen to receive details on the progress of this work and the status of the firm. The FCA will publish updates on its website, when it is appropriate to do so.

For its part, London Capital and Finance has confirmed on its website that both interest and capital repayments to investors have been suspended, along with new loans to its underlying borrowers.

In the meantime, LCF is unfortunately unable to make any further loans to borrowers at present, or to make payments of principal or interest to bondholders.

For the avoidance of any doubt, LCF would wish to stress that at the date of this notice no borrower has defaulted on loans made to it and the security taken in respect of each borrower loan remains in place.

Investors looking for more information should refer to the FCA announcement.

London Capital & Finance’s introducers look elsewhere

One of London Capital & Finance’s most significant introducers is RPDigitalservices Limited, which operates the websites best-savings-rate.co.uk and top-isa-rates.co.uk. RPDigitalservices Limited is wholly owned by Ronak Mahendra Patel. Patel resigned as a director of the company in June 2018, but remains its owner according to Companies House. The sole director is now Stephen John Jones.

Alexa lists best-savings-rate.co.uk and top-isa-rates.co.uk as the two biggest drivers of web traffic to London Capital & Finance’s website, with 53.8% of “Upstream Sites” visits (the website that users visited immediately before London Capital & Finance) coming from those two websites.

How much RPDigitalservices has earned in commission for referring investors to London Capital & Finance is not known.

After London Capital & Finance was ordered by the FCA to remove its marketing materials, RPDigitalservices switched to promoting Blackmore Bond plc. Like London Capital & Finance, Blackmore offers high risk unregulated bonds with a risk of total loss.

Unlike London Capital & Finance, Blackmore Bond plc is not an FCA-authorised company, which means it needs an FCA-authorised company to authorise its website and other promotions in order to be able to legally issue them to the public. At time of writing, Northern Provident Investments Limited is the firm which currently authorises Blackmore Bond plc’s website.

5 thoughts on “FCA freezes London & Capital Finance’s bank accounts; investors’ interest and capital repayments suspended

  1. London Capital Finance – Linked Companies & Loans Update
    the web of companies that seem to be connected to LCF. This is some more detailed information focused on some of those companies.

    It was also stated today that the FCA would have to obtain a court order to freeze assets so it’s possible that they have a lot more evidence than has been released so far. Impacting a business without sufficient proof would lead to lots of damage claims so they must be pretty certain something is amiss.

    One company that has a charge outstanding to London Capital Finance is LEISURE & TOURISM DEVELOPMENTS LIMITED. This owns shares in WATERSIDE VILLAGES LIMITED. Both are subsidiaries of LONDON POWER MANAGEMENT LIMITED. See more below about that company.

    According to the latest accounts up to 31/3/2017 it has secured debts of £41million, presumably to London Capital Finance as that is the only charge on it’s books. The accounts mention that this debt was REPAID by Group Companies after the year end. The latest accounts are overdue so we don’t know who/when this was.

    Could this be a way of refinancing the business so that it appears to London Capital Finance that the loan has been paid but in reality it has just been shifted from one company to another? It could mean that the loan is not performing but there has been no default.

    London Capital Finance repeatedly claim that none of their loans have ever defaulted. This seems very unlikely when they are lending to high risk borrowers. By this loan movement they can maintain that statement as being technically correct

    LEISURE & TOURISM DEVELOPMENTS LIMITED
    https://beta.companieshouse.gov.uk/company/09324527Registered 2014
    Accounts overdue 30/12/18
    Charge to LCF 17/5/16 Outstanding
    Secured Debts (LCF £41m) – REPAID by Group companies after 31/3/17. Which company has taken on this debt?
    LEISURE & TOURISM DEVELOPMENTS LIMITED loan from London Capital Finance
    LEISURE & TOURISM DEVELOPMENTS LIMITED

    WATERSIDE VILLAGES LIMITED
    https://beta.companieshouse.gov.uk/company/08335648/charges
    Charge to LCF 12/5/17, another charge 2016 to TMF trustee
    Accounts value £6m
    Director – SANDS

    The company that owns LEISURE & TOURISM DEVELOPMENTS LIMITED is LONDON POWER MANAGEMENT LIMITED. According to their last accounts from 2015 they owned 10 other companies many of which LCF have loaned money to.

    Most worryingly LONDON POWER MANAGEMENT LIMITED (previously London Group Limited) has repeatedly used a loophole to avoid filing accounts with Companies House and is now more than 6 months overdue for filing their 2016 accounts after using the loophole 5 TIMES since 2016. LONDON POWER MANAGEMENT LIMITED has a charge on its accounts from LCF so owes money to London Capital Finance. It also has an outstanding charge to London Support Group.

    In addition LONDON POWER MANAGEMENT LIMITED is listed to be struck off by Companies House. This means ownership of all assets moves to the Government.

    LONDON POWER MANAGEMENT LIMITED
    https://beta.companieshouse.gov.uk/company/02504629

    List of Companies owned by LONDON POWER MANAGEMENT LIMITED
    List of Companies owned by LONDON POWER MANAGEMENT LIMITED
    List of Companies owned by LONDON POWER MANAGEMENT LIMITED
    Another company CV Resorts Ltd has a charge from LCF on its accounts which appears to relate to a loan of £5.7m from LCF. However between 2015 and 2017 there was absolutely no movement in any figures in the accounts. How is this possible if the loan is being charged 8% interest?

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  2. Nobody knows. The FCA’s investigation continues and LCF’s current financial position is unknown due in part to its failure to file accounts in a timely fashion.

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