MJS Capital administrator says shell company used as “conduit for misuse of funds”; former MJS adviser alleges Ponzi scheme

MJS Capital (aka Colarb) collapsed in 2018 after ceasing payments to investors. In March this year it was placed into liquidation.

Relatively little news has emerged from MJS Capital since then, other than a filing on Companies House showing that a creditors committee has been formed, and the odd tidbit released to the press. The liquidators have not yet released a report into the liquidation of MJS Capital (now Colarb Capital plc) itself.

The liquidators, David Rubin & Partners, have however released a report into MJSC Marketing Limited, a shell company used by MJS Capital to move money.

MJSC Marketing Limited was formed by sole director and owner Nigel Peck, who was described as a member of MJS Capital’s advisory board in investment literature.

He has worked predominately in London, as well as Russia and the USA, with major companies holding both senior management and director positions focusing on marketing, sales, compliance, human resources, and corporate governance, and has many institutional connections. – MJS Capital brochure from 2017

Peck’s last regulated role in the UK was at Park Caledonia Associates, which he left in 2010 according to the FCA register.

The administrator reports that he met with Peck and MJS Capital CEO Shaun Prince in September 2018 when MJS Capital was starting to collapse under the weight of winding up petitions from aggrieved investors.

During his discussions, the administrator “grew concerned that investors’ money may have been used for purporses inconsistent with the terms on which it had been invested.”

A week later Peck expressed concerns to the administrator “that the company was being used as a conduit for the misuse of the funds invested by members of the public supposedly into MJS Capital plc”.

Despite being the sole owner of MJSC Marketing, Peck told the administrator that he was not in full control of MJSCM’s bank account, as Prince and another person acting for Prince were “moving funds into and out of the Company’s account without Mr Peck’s knowledge or consent”.

Peck also alleged that MJS Capital had been investing into companies in which Prince had a personal interest.

Peck also alleged that MJS Capital operated as a Ponzi scheme.

Mr Peck also advised me that he believed that investment monies from new investors was [sic] partly being used to pay off older investors who had been threatening MJS Capital PLC with winding up proceedings.

Shortly afterwards Peck accepted the administrator’s advice to place MJSC Marketing into administration.

According to the administrator, this was too late to prevent £300,000 disappearing via MJSC Marketing under “highly suspect” circumstances.

I quickly established that over £300,000 had recently been deposited into the accounts and that in the days preceding my appointment, all of those funds had been transferred out of the accounts at the direction of an employee of Mr Prince. These transactions finally emptied the bank accounts on the very day my appointment took effect. I view that circumstance as highly suspect but the bank was unable to reverse the transactions.

A total of £965,000 was paid from MJSC Marketing to third parties which did not meet MJS’ investment criteria, according to the administrators.

The MJSCM administrators, David Rubin & Partners, have now also been appointed administrators of MJS Capital itself, and the administrators are of the firm view that the affairs of MJSCM and MJS Capital need to be viewed together.

Nigel Peck may not be off the hook either.

No useful purpose can be served by the return of control of this Company to its sole Director, Mr Peck. It is apparent from my enquiries that the conduct of Mr Peck itself may warrant further scrutiny.

With the accounts having been emptied by Prince and his merry men, Peck paid £6,000 into the company, which paid for legal advice from Taylor Wessing and obtaining the court order to liquidate the company. The administrator’s own fees have not yet been drawn.