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Last week, it became apparent that the Financial Services Authority (FSA) is in discussions with the SFO about potentially missing assets underlying some of Keydata’s suspended fund range. (See article.)

The directors of Keydata have also come out to say they may be the victims of fraud in relation to bonds issued by SLS Capital in 2005. (See article.)

According to Keydata directors, an agent of BWT Capital, a company controlled by David Elias, approached Keydata to assist with the ongoing distribution of these bonds into the UK in May 2005. Elias then passed away in May 2009.

Speaking to FTAdviser, a spokesman for the SFO, said it is not a foregone conclusion that a fraud investigation would be launched into Keydata and that it is currently making an assessment on this.

He said: "We’ve had a request and we’re looking into it. We’re not initiating an investigation at this stage but are liasing with PwC and the FSA about whether there needs to be an investigation.

"We have to look more deeply to see whether fraud, rather than mismanagement happened and what we think the chances of a successful prosecution could be."

He added: "I think a month would be a minimum but we’re trying to make decisions within that timeframe."

Although Keydata went into administration last month (June), the SFO has only been in talks with the authorities for a "few days" and is spending the next four weeks deciding whether the case fulfils its fraud criteria.

To investigate a potential case of fraud, the SFO will analyse whether such an investigation would be in the public interest, as well as whether it could ascertain a successful prosecution.

The spokesman admitted that the death of a possible suspect represented a "stumbling block" in its probe, but said it did not mean an investigation would not be launched.

He said: "It’s a big stumbling block but we have to make all the assessments. The SFO can’t rule out fraud just because of this as there may be other people involved."

*** Click here for the latest news on Keydata.