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In a statement published this afternoon (2pm, 30 June), PricewaterhouseCoopers (PwC) said that "potential issues have just come to light which mean that a sale of the company as a whole will now not be possible".

PwC will now look to sell the parts of the business separately and is in talks with interested parties.

The joint administrators, the Financial Services Authority (FSA) and a group of banks to which KIS provides account management and administrative services, including Credit Suisse, Morgan Stanley and HSBC, are working together to ensure the continued orderly running of KIS's services until a disposal can be secured.

As part of this, the FSA has confirmed that it is in discussions with the Serious Fraud Office (SFO) about potentially missing assets underlying some of KIS's suspended fund range. (See full story.)

KIS was placed into administration earlier this month (June) after the FSA ruled it was insolvent. KIS designed, distributed and administered structured investment products.

Dan Schwarzmann, joint administrator and partner of PwC, said it was very disappointed not to have been able to effect a sale of the business as a going concern, as this would have provided some much needed stability for investors, employees and creditors.

He 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.

"I would also reiterate my earlier confirmation regarding funds held by KIS. The funds, which totalled £70m at the date of our appointment, are all held in secure segregated client bank accounts and are not affected by the insolvency of KIS."

The 'issues' with the fund range uncovered by PwC include the revelation that SLS Capital S.A has not paid income on products invested with the company since October 2008.

PwC said that investors had not suffered an income shortfall as a result of this non-payment as the gap was filled by Keydata's own corporate funds, although it added that it has also identified that early redemptions of these products have been dealt with in an irregular fashion.

As such, the administrators are now working to trace products invested in SLS, totalling £103m.

PwC added that irregularities have also been found in the treatment of early redemptions of products invested with Lifemark S.A, Lifemark and Hometrak S.A.

As a result, PwC has suspended interest payments and redemption rights on some of Keydata's products.

Products affected include Keydata's Secure Income Bond 1, 2, 3 and its Income Property Bond 1–6, on which interest income payments and redemptions have been suspended.

Investors will, however, continue to receive income from Keydats's Secure Income Bond 4, Secure Income Plan 1-12 and 14 and Defined Income Plan 1-8, Special Editions and other Lifemark branded products.

But redemptions on all of these products have been put on hold.