Keydata administrators claim £107m missing

Wednesday, 01 July 2009 12:00

Thousands of investors with Keydata are at risk after administrators found a £107 million black hole in the failed firm's assets.

Administrators PricewaterhouseCoopers (PwC) believes £107 million in assets have disappeared and have asked the Serious Fraud Office (SFO) to investigate.

Redemptions and income payments on several products have now been frozen with some 5,820 investors thought to be affected - including many relying on investments to provide an income.

PwC is trying to establish why two firms, SLS Capital and Hometrak, have not been paying income on investment products, leaving Keydata to fill the gap with its own corporate funds.

Dan Schwarzmann, joint administrator, said: "We understand how worrying this new information must be for investors but would like to reassure all of them that we very much have their interests at the forefront of our minds as we seek to fully understand all the issues.

"We are working very hard in conjunction with the FSA and other authorities to obtain information regarding the whereabouts of the underlying funds in SLS."

Investigations by the administrator suggests the assets were liquidated and "may have been misappropriated," PwC said.

The administrators are working with the authorities in an effort to trace the funds.

A spokesperson for the Serious Fraud Office (SFO) said an investigation has not yet been launched, but added "we will make a decision on whether or not to launch an investigation shortly."

The SFO is working closely with PwC on the matter, the spokesperson added.

When Keydata first went into administration, PwC hoped to sell the business as a going concern as the problems were thought to be only related to a £5 million tax bill triggered by ISA products that were not deemed to be tax-free.

But since the new information came to light, only parts of the firm will be sold off and now thousands of investors face uncertainty over their cash.

PwC said the Financial Services Compensation Scheme (FSCS) may be able to help investors in some cases.

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