Director removed after moving money during investigation

A court has ordered that a director should be removed from his position after several sums of investors’ money were dispersed into various companies.

The director ran a business that sought investment for developments of hotels and care homes.

Investors received a long lease on one of the rooms in the developments, and a high rate of returns once the works were completed.

However, there was more than one business in the investment model, with several special purpose vehicle (SPV) companies being used to hold and move the invested money.

A complex series of inter-company loans and pools made the money difficult to track, and several investors grew concerned. Over £30m had been invested, but only £11m could be accounted for within the SPVs.

Some of the investors applied for administration orders for the relevant companies. A judge ordered interim managers for four of the companies, and then on their advice, freezing orders for various other companies associated with the director and his family.

The investigation also included accessing the data on the director’s personal devices such as mobile phones and laptops. He objected to this because it would be an invasion of his privacy, but this was rejected.

The court orders were modified so that all the interim managers of the various companies were working with the same goal and authority, and ultimately it was the top company being investigated, with all subsidiary companies being prepared to react to the findings.

However, while the investigations were taking place, there was evidence of the director moving further funds between the companies and into other private accounts.

The court granted an application from the interim managers to have the director removed from his position to halt any further transactions.

The investigations into the companies could then be carried out completely without any further interference.

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