The not-so-unlucky 13 include:
- The Four Horsemen Of LCF, the four directors of London Capital and Finance or connected companies to whom LCF on-lent money, who were arrested by the Serious Fraud Office and shortly thereafter released without any charge: Simon-Hume Kendall, CEO Andy Thomson, Elten Barker and Spencer Golding.
- Hume-Kendall’s wife Helen.
- Paul Careless, CEO of Surge Group which received a total of £60 million in commission for promoting London Capital & Finance.
- Former Tory Energy Minister Charles Hendry, who is one of five defendants accused of not doing enough to identify the fraud while serving on the board of LCF-linked companies.
- The other six defendants have not been named by the FT.
The lawsuit alleges that LCF’s purpose was to defaud bondholders. According to the lawsuit,
nearly 60 per cent of all of the investors’ cash — about £136m — was channelled to its executives either directly or via loans to companies they controlled or were connected to.
Add the £60m paid to Surge, and you only have at most £1 in every £5 invested by investors going into assets which might pay them a return, according to the administrators.
Although there is not a long history in the UK of the perpetrators of collapsed unregulated investment schemes having to give the money back, one wonders how many directors of unregulated investment schemes that have recently collapsed, or are in the process of collapsing, might be sleeping a little less easy in their beds.
It remains to be seen, probably over the next few years at a minimum, a) whether the administrators are successful in making the allegations stick against the defendants (who universally either vigorously denied wrongdoing or did not make any comment) and b) whether, if so, they can recover any assets.