Latest news with #79thGroup
Times
03-08-2025
- Business
- Times
City watchdog ‘ignored my warning about Ponzi scheme'
The City regulator is facing criticism for allegedly 'ignoring' a warning about an investment group that later collapsed owing thousands of people more than £200 million. The Financial Conduct Authority received a report that 79th Group was an alleged Ponzi scheme in November, more than four months before the failure of the business, which is now being investigated by City of London police. In an apparent echo of the regulator's widely criticised handling of the £237 million collapse of London Capital & Finance's 'mini bonds' investment scam, the FCA told a complainant that 79th Group 'lies outside our remit' as it 'does not regulate mini bonds'. • Former HMRC official was adviser to collapsed investment firm Mini bonds are a high-risk investment issued by a firm in exchange for a fixed rate of interest over a set period. Insolvency practitioners have estimated that 79th Group owes more than £200 million to about 3,700 people based in the UK and overseas. Some investors have life savings at risk, and the matter has been raised in parliament. A member of the public had warned the FCA — including Nikhil Rathi, its chief executive — in November. Communications then continued in December and January. 79th Group continued to trade until April when it began to fall into insolvency. • City regulator getting 'more whistleblowing reports than ever' The group continued to trade until April when it began to fall into insolvency. City of London police have said they are investigating a 'suspected widespread fraud' at 79th Group, which sold 'loan notes' to investors offering high returns via third-party brokers. It told investors that the loans were secured against valuable property developments including a £250 million holiday park in north Wales. The company has denied any wrongdoing. In February, police said four people had been arrested and that 'a large amount of cash, luxury watches and jewellery were found during searches of properties, all of which were seized'. The people arrested have been released on bail and inquiries are continuing. There have been no charges. 79th Group's board advisers included a former senior HM Revenue & Customs official, who has not been arrested. Almost all financial firms in the UK must be authorised or registered by the FCA; 79th Group was not registered or authorised. The regulator declined to answer questions about the case, including when it first received a warning about the firm. A spokesman said: 'We have sympathy with those who've lost money. As there is an ongoing police investigation we are limited in what we can say.' He said the regulator is engaging with City of London police, but noted: 'The firm is not authorised by us and the sale of these products was not regulated by us.' The FCA faced fierce criticism over its handling of the London Capital & Finance case, which was called the 'largest Ponzi scheme in British history' by a High Court judge last year. • NatWest faces questions over links to collapsed 79th Group Dame Elizabeth Gloster, a retired Court of Appeal judge, who issued an excoriating report into the LCF affair in 2020, concluded that the regulator's 'failure to scrutinise LCF's business and to intervene earlier cannot be excused or mitigated on the basis that LCF's bond business was [unregulated]'. LCF was FCA-authorised, but its mini-bond business was unregulated. The FCA has powers to tackle unregulated collective investment schemes like 79th Group. Last week, the regulator began High Court proceedings against a business called Concept Capital Group for allegedly running an unauthorised investment scheme that gathered £23 million in consumer investments in modular housing. Sir John Whittingdale, a veteran Conservative MP and former minister, has raised 79th Group's failure in parliament, as has Anna Sabine, a Lib Dem MP. Whittingdale asked the chancellor in July what 'assessment she has made of the adequacy of Financial Conduct Authority support for victims'. He also wrote to the FCA last month on behalf of a constituent, a retired NHS health worker who lives in Essex and invested 'life savings' of £75,000 with 79th Group. He told the regulator that he was advised that many of the investors were 'unsophisticated, retired first-time investors, some put their savings into a well-planned scam'. He said at least 16 MPs have so far been asked to help. Brian Corr, the FCA's head of market intervention in retail banking, replied: 'We are unable to provide details regarding further engagement or action we have taken with any of the firms mentioned by your constituent, due to legal and policy reasons.' NatWest, the main receiving bank for 79th Group funds, and other lenders are facing scrutiny over 79th Group payments. NatWest has declined to comment on the case. • Watchdog to ban borrowing to invest in cryptocurrencies Administrators from Grant Thornton have told 79th Group investors that 'we believe this is a Ponzi', the term for a fraudulent investment set up in which early investors are paid with money from later investors rather than legitimate business activities. The person who warned the FCA about the group told The Times: 'The FCA completely ignored the substance of my concerns last year. Sadly, my concerns have proved well-placed and enormous amounts of investors' money is at risk following 79th Group's collapse. 'If the FCA is warned about a major Ponzi scheme and does nothing, is it a lapse in judgment or evidence of a callous attitude towards protecting the public?'
Times
28-07-2025
- Business
- Times
NatWest faces questions over links to collapsed 79th Group
NatWest is facing scrutiny over its relationship with a collapsed £200 million investment group which insolvency practitioners suspect was a Ponzi scheme. 79th Group attracted thousands of investors from the UK and overseas, before collapsing into administration in April, two months after the City of London police announced an investigation into a 'suspected widespread fraud'. The company has denied wrongdoing. Insolvency practitioners estimate 79th Group owes more than £200 million to about 3,700 people. Some investors have life savings at risk. The matter was raised in parliament this month. The 'main account' of the group was held at NatWest, according to administrators from Kroll and Quantuma. It is understood that the relationship originated at the bank's Southport branch, which is near 79th Group's Merseyside head office. The bank also holds an outstanding charge over a 79th Group entity which was first registered 20 years ago. That company went into insolvency in May. Investors' funds were paid into a 'treasury account [and then] transferred out to other entities', administrators said in a recent report to creditors. They are investigating the 'flow of funds'. Investors' money does not appear to have been 'ring-fenced' and was instead 'pooled' in group accounts. No formal loan accounts appear to have been recorded or board minutes yet identified relating to the management of investors' money, insolvency practitioners have claimed. The bank declined to answer a series of questions over its banking relationship with 79th Group, including how much money was received and processed by the bank; whether it had continued to receive investor funds after the arrests; whether it had failed to detect serious irregularities; and whether NatWest was investigating. A NatWest spokeswoman said: 'Combating fraud is a top priority and we are committed to preventing criminal activity. We will not make any further comment on this case.' Contractual agreements between the group and investors stated that funds would be used for specific projects, including a £250 million holiday park in north Wales and a mining venture. City of London police said in February that four people had been arrested and that 'a large amount of cash, luxury watches and jewellery were found during searches of properties, all of which were seized'. All people arrested have been released on bail and inquiries continue. There have been no charges. The Times reported this month that 79th Group's board included a former senior HM Revenue & Customs official who was in charge of combating fraud for the tax office. Andy Cole, former director of specialist investigations at HMRC, was a non-executive adviser. There is no suggestion of wrongdoing by Cole or that he is being investigated. He has not been arrested. Administrators from Grant Thornton have told 79th Group investors that 'we believe this is a Ponzi', the term for a fraudulent investment scheme in which early investors are paid with money from later investors rather than legitimate business activities. Banks have a regulatory duty to counter the risk that they might be used to further financial crime. Lenders face strict 'know your customer' and anti-money laundering rules; adherence requires due diligence, transaction monitoring and reporting of suspicious activity. Three sets of insolvency firms are engaged on the case. Administrators are liaising with NatWest over the outstanding charge owed to the bank, which has said it is not in a position to release it, according to its report. In 2021, NatWest was fined £264.8 million for anti-money laundering failures related to the gold trading business Fowler Oldfield. This month Barclays was fined £39.3 million for failing to tackle financial crime risks in its dealings with Stunt & Co, which received £46.8 million from Fowler Oldfield.
BBC News
01-07-2025
- Business
- BBC News
Former Hexham Workhouse from 19th Century up for sale
A 19th Century workhouse, which has been described as a "bit of a blot", is being former Hexham Workhouse on Corbridge Road, which dates back to 1839, served as housing for the destitute until 1939 before it was made part of the old Hexham Hospital. It has stood empty for more than a Landwood said the Northumberland property, which has an asking price of more than £800,000, should "generate plenty of interest". The site is being sold following the collapse of its previous owners the 79th Group, which fell into administration amid a fraud investigation by the City of London Police. The Southport-based company has denied any wrongdoing, the Local Democracy Reporting Service building is being sold by the company's administrators councillor Derek Kennedy said he hoped a new developer would be able to make the most of the historic said the building's lack of use had been a "bit of a blot for the town"."We had high hopes for the 79th Group – we met with them on a few occasions and they laid out their plans," he said."There was some interesting proposals for housing but they never came to fruition."He said a developer could make "something spectacular" with the site. "We do like developments that use old buildings," he said. Follow BBC North East on X, Facebook, Nextdoor and Instagram.
Wales Online
04-05-2025
- Business
- Wales Online
Funding 'pledged' as community eyes up Anglesey beauty spot earmarked for £250m holiday complex
Our community members are treated to special offers, promotions and adverts from us and our partners. You can check out at any time. More info A community's 14-year battle to reclaim an Anglesey beauty spot from developers could be nearing a turning point. Funding has been reportedly pledged to finance the purchase of Penrhos Coastal Park (CP) depending on insolvency outcomes and a fraud investigation by police. A Community Interest Company (CIC) is being established to formalise a possible future bid by residents in Holyhead and beyond. This will aim to 'facilitate community ownership of Penrhos for the benefit of future generations'. The CIC hopes to overturn planning consent awarded for almost 500 luxury lodges at the 200-acre site. Having acquired the coastal park in January, new owners the 79th Group talked of a £250m development starting this summer. But a City of London Police investigation was launched into the Southport-based asset management business. On February 28, the force said four people connected to the company had been arrested and bailed as part of 'Operation Mold '. This week, notice was given that eight companies associated with 79th Group had been placed into administration. They were were among a batch of 13 79th Group vehicles that had filed notice of intention to appoint an administrator. These included DJC Leisure, which at the turn of the year bought 18 parcels of Penrhos CP land from former site owner Land and Lakes. Penrhos CP supporters have also learnt that 'hundreds' of 79th Group staff have been told their jobs have gone. Sign up now for the latest news on the North Wales Live Whatsapp community Penrhos stalwart Hilary Paterson-Jones has led efforts to thwart plans for a luxury holiday complex ever since former site owner Land and Lakes announced its intentions in 2011. She said the fraud case implications for Penrhos were currently uncertain. But the new CIC – expected to be formalised this week – will explore opportunities that might arise from this uncertainty. (Image: Ian Greig/Wiki) Hilary said: 'We've already had offers of funding from numerous private sector, government and individual sources. At the moment I'm not at liberty to say who they are. The admin team will also be looking to secure additional funding from other sources, including crowdfunding initiatives, with a view to bringing Penrhos into community ownership.' Since the launch of of formal police investigation in February, the 79th Group has stopped all interest and redemption payments to loan note holders - these raised cash by offering investors high returns over a fixed period. The suspension of payments has raised liquidity concerns and has left investors frantic with worry. A collective civil recovery process is in its early stages. When the City of London Police announced its investigation, Anglesey Council expressed 'great concern' over the development. With support from local councillors, Penrhos supporters now aim to overturn planning permission controversially awarded by the council for a holiday complex in 2016. If stripped of consent, it's hoped other developers will be deterred and the site's asset value will fall. Supporters will also be assessing possibilities should DJC Leisure enter administration. Hilary set out the CIC's plans yesterday with Plaid leader Rhun ap Iorwerth, the Senedd Member for Ynys Môn. (Image: Land & Lakes) Having lost a £40,000 High Court case against the Penrhos development last year, Hilary hopes a turning point has been reached. She's been keeping a watch on the wooded site since 1969 when Anglesey Aluminium sought consent for a vast smelter on Holyhead's outskirts. She said: 'The then Welsh Office insisted that 272 acres of the 790-acre site were set aside as public amenity in perpetuity – I watched the company secretary type out the agreement. 'This became the coastal park which is home to an ancient woodland and some of the last surviving red squirrels in Wales. It was and, still is, a refuge for local people. So when the site was bought by Land and Lakes for holiday chalets, depriving the community of its legacy, it caused a huge outcry – it was among the first things I mentioned when I initially addressed the council chamber. 'Bringing the coastal park into community ownership would be a way of squaring the circle after all these years.' Get the best island stories from our Anglesey newsletter - sent every Friday At stake is more than local pride and amenity, Hilary added. In the fight against climate change, Penrhos CP is an important bulwalk against carbon emissions, she said. 'I struggle to understand why the Welsh Government is paying to plant trees in countries like Ghana when it won't safeguard ancient woodlands in Wales like the one at Penrhos. 'We are a tiny island and I fear we may as well float off into the Irish Sea for all the lack of support we get here. If the coastal park is ever lost, Holyhead will become a concrete town with barely a single tree left.' Find out what's happening near you
North Wales Live
04-05-2025
- Business
- North Wales Live
Funding 'pledged' as community eyes up Anglesey beauty spot earmarked for £250m holiday complex
A community's 14-year battle to reclaim an Anglesey beauty spot from developers could be nearing a turning point. Funding has been reportedly pledged to finance the purchase of Penrhos Coastal Park (CP) depending on insolvency outcomes and a fraud investigation by police. A Community Interest Company (CIC) is being established to formalise a possible future bid by residents in Holyhead and beyond. This will aim to 'facilitate community ownership of Penrhos for the benefit of future generations'. The CIC hopes to overturn planning consent awarded for almost 500 luxury lodges at the 200-acre site. Having acquired the coastal park in January, new owners the 79th Group talked of a £250m development starting this summer. But a City of London Police investigation was launched into the Southport-based asset management business. On February 28, the force said four people connected to the company had been arrested and bailed as part of 'Operation Mold '. This week, notice was given that eight companies associated with 79th Group had been placed into administration. They were were among a batch of 13 79th Group vehicles that had filed notice of intention to appoint an administrator. These included DJC Leisure, which at the turn of the year bought 18 parcels of Penrhos CP land from former site owner Land and Lakes. Penrhos CP supporters have also learnt that 'hundreds' of 79th Group staff have been told their jobs have gone. Penrhos stalwart Hilary Paterson-Jones has led efforts to thwart plans for a luxury holiday complex ever since former site owner Land and Lakes announced its intentions in 2011. She said the fraud case implications for Penrhos were currently uncertain. But the new CIC – expected to be formalised this week – will explore opportunities that might arise from this uncertainty. Hilary said: 'We've already had offers of funding from numerous private sector, government and individual sources. At the moment I'm not at liberty to say who they are. The admin team will also be looking to secure additional funding from other sources, including crowdfunding initiatives, with a view to bringing Penrhos into community ownership.' Since the launch of of formal police investigation in February, the 79th Group has stopped all interest and redemption payments to loan note holders - these raised cash by offering investors high returns over a fixed period. The suspension of payments has raised liquidity concerns and has left investors frantic with worry. A collective civil recovery process is in its early stages. When the City of London Police announced its investigation, Anglesey Council expressed 'great concern' over the development. With support from local councillors, Penrhos supporters now aim to overturn planning permission controversially awarded by the council for a holiday complex in 2016. If stripped of consent, it's hoped other developers will be deterred and the site's asset value will fall. Supporters will also be assessing possibilities should DJC Leisure enter administration. Hilary set out the CIC's plans yesterday with Plaid leader Rhun ap Iorwerth, the Senedd Member for Ynys Môn. Having lost a £40,000 High Court case against the Penrhos development last year, Hilary hopes a turning point has been reached. She's been keeping a watch on the wooded site since 1969 when Anglesey Aluminium sought consent for a vast smelter on Holyhead's outskirts. She said: 'The then Welsh Office insisted that 272 acres of the 790-acre site were set aside as public amenity in perpetuity – I watched the company secretary type out the agreement. 'This became the coastal park which is home to an ancient woodland and some of the last surviving red squirrels in Wales. It was and, still is, a refuge for local people. So when the site was bought by Land and Lakes for holiday chalets, depriving the community of its legacy, it caused a huge outcry – it was among the first things I mentioned when I initially addressed the council chamber. 'Bringing the coastal park into community ownership would be a way of squaring the circle after all these years.' Get the best island stories from our Anglesey newsletter - sent every Friday At stake is more than local pride and amenity, Hilary added. In the fight against climate change, Penrhos CP is an important bulwalk against carbon emissions, she said. 'I struggle to understand why the Welsh Government is paying to plant trees in countries like Ghana when it won't safeguard ancient woodlands in Wales like the one at Penrhos. 'We are a tiny island and I fear we may as well float off into the Irish Sea for all the lack of support we get here. If the coastal park is ever lost, Holyhead will become a concrete town with barely a single tree left.'
