The Financial Conduct Authority is making enquiries about Mission Corporate Finance, a promoter of the failed PropertyBourse funds.
In an email, Ayesha Sabavala, a senior associate in the FCA’s investment, wholesale and specialists division, contacted the liquidators of the associated Mission and PropertyBourse funds to ask for documents about Mission Corporate Finance.
The regulator’s email, sent on 14 December, also requested any contact details for IFAs or investors affected by the collapse of funds promoted by Mission Corporate Finance, so that the regulator can get in touch with them.
In a second email, to an ex-contractor for PropertyBourse, Ms Sabavala stated she wanted to receive information regarding Mission Corporate Finance’s director Perry Lewis and his firm.
The FCA has not made any allegation of wrongdoing nor announced an investigation.
Ms Sabavala’s emails indicate only preliminary enquiries and state that the FCA is looking for additional relevant information in order to determine how the Mission-promoted Tuscany Property Investment fund was sold to investors, particularly whether this was via FCA authorised intermediaries.
The regulator has also been looking for any application forms to “shed some more light on the exact role of the promoter”, along with more information on how much rounds of funding raised and the details of correspondence with investors from Mission Corporate Finance and Mission Real Estate Investment Funds Ltd.
Ms Sabavala also wrote that it would be useful to determine how and why investors incurred a loss and whether the fund was promoted more widely, or just to professional investors.
“What the FCA is trying with all this information to determine is whether there was an obligation on the promoter to assess whether the fundraising was a success and whether this therefore led to investor losses,” read one of her emails.
The FCA declined to comment on the matter.
Founded by Mr Lewis in 2003, Mission Corporate Finance is described on its website as “a full service consultancy aimed at private businesses, their owners and directors”. Mr Lewis is also the director of Mission Real Estate Asset Management.
Mr Lewis, who has not seen the FCA emails, said he was not aware of any FCA probe and that Mission Corporate Finance’s work has throughout been of the highest professional standard and entirely proper.
Referring to the Tuscany fund, he commented: “I have never been a director (finance or otherwise) of the fund or indeed any other fund. The fund particulars make no mention of me acting in this capacity.”
Mission Corporate Finance’s role has been purely as preparation of the formal information memorandum and fund particulars while, also, assisting in the set up of the funds, said Mr Lewis.
This work “was verified and fully reviewed by reputable firms of solicitors and accountants each with wide ranging and relevant expertise. MCF’s role, as promoter, is limited to these areas of work in both contractual and regulatory terms,” he said, adding that a promoter has no role in the ongoing management of the funds or as adviser to the funds.
Mr Lewis added that the former PropertyBourse contractor has had no connection with either Mission Corporate Finance or the Tuscany fund.
During 2011 and 2012 two Mission-branded German and Italian property funds went into liquidation in the wake of the financial crisis.
On 28 October 2013, Malcolm Fillmore, a partner at BM Advisory, was appointed joint liquidator of PropertyBourse, arranger of the Tuscany fund, according to the fund particulars.
Mr Lewis suggested that Mr Fillmore sought the role on what he described as a “success only” basis and that he has accrued considerable fees during the period of his appointment which will not be paid unless he proves negligence on the part of advisers.
Mr Fillmore responded that Mission Real Estate Investment Funds was originally declared insolvent with no assets – with original liquidators Grant Thornton accepting that enquiries were necessary, but not being prepared to fund it – “hence, the only basis for taking on the liquidation was speculative and fees can only be paid if successful claims are made”.
Mr Lewis claimed that Mr Fillmore “has not sought answers to his questions from either Mission Corporate Finance or Mission Real Estate Asset Management”, adding that “through ‘leaks’ and misinformation, one possible conclusion arising from his conduct is that he is seeking third party assistance (the press) to promote his claim”.
Mr Fillmore said that he is looking at several routes to facilitate the obtaining of information to ascertain who may be responsible for the “very significant losses” of investors and creditors in various companies and to seek recovery on their behalf.
peter.walker@ft.com
