In a further update posted on PwC’s website the administrator has confirmed that income payments have been suspended for an unknown period of time.
Ned Naylor, of Ned Naylor & Co, believes the move to suspend income payments could be unlawful.
Naylor says he has 20 clients who have invested in various issues of the defined income plan in the last year.
He says: “I believe this to be an unlawful act, as the clients own their own plans’ assets and KIS have no ownership rights as these assets do not and never did form part of KIS business assets or liabilities, they are lodged with counterparties, PWC are unlawfully withholding the clients income payments.
“Is it not sufficiently apalling that KIS has been put into administration for such flimsy reasons the FSA has alleged exist, when a viable management solution had been proposed? but to compound this mess with denying people their income payments is unjust, unfair and I believe illegal.
“This is an unacceptable situation, created by a knee jerk reaction to an alleged problem of solvency which to all intents and purposes does not seem to be proven yet. How in gods name are we supposed to conduct business with such arbitrary decisions being made by regulators and now administrators.”
PwC has confirmed that it believes that client funds have been segregated and are safe- although this has still to be verified.
It says in the short term PwC will not be banking investors’ cheques and investors will not be able to redeem investments or receive income payments from their respective plans.
PwC says the following KIS products are currently in their “open period” where investors have subscribed and the plan is still open for subscription, but no investment has been made in the underlying securities:
The Annual Kickout Plan (Issue 2)
The Capital Protected Bonus Plan (Issue 2)
The Defined Income Plan (Issue 10)
The Dynamic Growth Plan Plus (Issue 17)
The Extra Income Plan (Issue 27)