Nigel Walter of Medstead, Hampshire was banned for 9 years and Michael Anthony Davies of Radstock, Somerset for 7 years. The disqualifications, which started on the 24 November 2014 and 4 December 2014, respectively, mean that the two directors cannot control or manage a company without leave of the court.
CAM was the asset manager of a number of funds sold as investments to members of the public through independent financial advisers. The company was placed into administration in September 2012 with around £34m owed to creditors.
The largest fund managed by CAM was launched around March 2007 and had investors totalling £106m. The fund primarily loaned money to Tiuta International Ltd (TIL) who would, in turn, loan money to clients as residential and commercial bridging finance. It was suspended in March 2012 and placed into liquidation in December 2012.
Commenting on the case, Joanne Covell, of the Insolvency Service’s Outsourced Investigations team, said:
CAM failed to protect the investors in the fund as it should have done and the amounts lost by private investors as a result of CAM’s failings were substantial. These lengthy bans for the directors responsible for CAM’s failings reflects the seriousness of those failings and the robust stance the Insolvency Service will take against those whose conduct falls below accepted commercial standards.
Neither Mr Walter nor Mr Davies disputed that they failed to ensure CAM carried out its responsibilities to the fund and that CAM failed to:
- review the progress on each bridging loan made by TIL with monies borrowed from the fund
- ensure that all monies were repaid to the fund following completion of loans repaid to TIL by its borrowers
CAM’s failure to carry out its responsibilities caused the fund to suffer losses, in that:
- TIL received redemptions from its borrowers but failed to pass these payments to the fund as TIL was contractually obliged to. Redemptions paid to TIL which were not repaid to the fund amounted to at least £23 million
- TIL retained funds drawn from the fund for loans that it did not make to its customers which amounted to at least £3.4 million
In March 2011, CAM became aware that there were problems with TIL’s Loan Book but failed to establish the true position. From then, CAM repeatedly failed to prevent TIL retaining redemptions and repaying funds for loans which did not proceed. During this period the fund lost out by approximately £12m.
Notes to Editors
A disqualification order has the effect that without specific permission of a court, a person with a disqualification cannot
* act as a director of a company
* take part, directly or indirectly, in the promotion, formation or management of a company or limited liability partnership
* act as an insolvency practitioner
* be a receiver of a company’s property
In addition many other restrictions are placed on disqualified directors by other regulations.
Disqualification undertakings are the administrative equivalent of a disqualification order but do not involve court proceedings.
Further information on director disqualifications and restrictions is available.