The Financial Conduct Authority has secured a conditional agreement with Park First Limited and its senior managers regarding compensation for investors who have suffered a loss after investing in the car parking scheme.
In an update today (July 20), the FCA said it had come to a conditional resolution with the defendants in proceedings seeking compensation for approximately 4,500 investors in the failed Park First scheme.
The agreement should see a further £25m made available for compensation to investors, added to the £33m already secured from the sale of the car park at Luton airport.
It is conditional on investors approving the Company Voluntary Arrangements (CVAs) in respect of the Park First companies.
Mark Steward, executive director of enforcement and market oversight at the FCA, said: “The agreement, if approved, represents a better outcome in the proceedings for investors than could have been achieved through continued legal action, given the financial position of the parties. It also gives investors the final say on the merits of the conditional agreement.”
Last October, the FCA started legal proceedings against Park First Limited and its senior managers with the aim to win compensation for investors.
It had lodged a claim against the firm, its chief executive officer and a number of other companies connected to the group.
The regulator had also asked the court to order Park First Limited to pay a sum to the FCA which could then be distributed among the investors who suffered losses.
Park First Limited, and its related entities, promoted and operated airport car parking investment schemes but were not authorised by the FCA and not permitted to provide regulated financial services.
Four of the Park First companies involved in the scheme were placed in administration in July 2019.
In today’s update, the FCA reached an agreement with chief executive Toby Scott Whittaker, director John Slater and a number of companies involved or connected to the Park First Scheme.
The FCA said Whittaker will need to realise most of his assets to pay the sum of £25m, which will be paid in instalments on the sale of the assets.
If any instalment is unpaid, Whittaker has agreed not to contest the debt for the purpose of any bankruptcy proceedings brought by the FCA.
If the arrangements are approved, the defendants will consent that they breached section 19 of the Financial Services & Markets Act, 2000 by operating a collective investment scheme without being authorised by the FCA.
If the investors do not approve the arrangements and the conditional agreement, the FCA’s proceedings against the defendants will continue. The trial is fixed for hearing in February 2022.
The FCA first intervened with Park First Limited in 2016 and in December 2017, the firm agreed to stop operating and promoting these schemes in their original form after intervention by the FCA.
Following the FCA’s action, the scheme was restructured, and investors were offered the chance to get their initial investment back or move into a different scheme.