Ex-Tory donor's payments company hit by money-laundering crackdown
A payments business controlled by a former Tory donor has been hit by a crackdown by Britain's financial watchdog over anti-money laundering failures.
Lycamoney, which is controlled by British-Sri Lankan entrepreneur Allirajah Subaskaran, was targeted by the Financial Conduct Authority (FCA) in 2024 over concerns it would not be able to spot fraud.
The shortcomings led to the business being forced into a strict oversight regime with the FCA, while an audit of its anti-money laundering processes was also carried out.
The company was forced to stop accepting new customers as a result of the probe, with the block still in place until earlier this year.
Bosses addressed the issue in Lycamoney's latest accounts, as they admitted that the company was scrutinised for a 'serious regulatory matter'.
The website for Lycamoney, which was set up to help people send money overseas to family and friends, remains offline.
The FCA's inquiry into Lycamoney came as part of a broader crackdown on anti-money laundering, as the regulator warned many payment firms last year to tighten up their processes or risk penalties.
Mr Subaskaran, who handed more than £2m to the Tories between 2011 and 2016, founded Lycamoney after setting up Lycamobile in 2006.
Companies House filings show that he is also the ultimate owner of Lycamoney.
However, his sprawling web of mobile, media and payments businesses has come under increasing scrutiny in recent years after a string of accounting and tax issues.
Lycamobile, Mr Subaskaran's best-known brand, sells pay-as-you-go SIM cards to migrants making international calls.
The company admitted last year that auditors had refused to sign off its accounts, as they warned that they had been unable to find sufficient evidence over loans totalling almost £150m.
The majority of the company's staff were then sacked in December.
Lycamobile also lost a case against HMRC last August after failing to argue that its call, text and data bundles were exempt from VAT. This left the company facing a potential bill of up to £51m.
The company's latest accounts show that it had lost £2.2m in the year ending December 2023.
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