Connaught Asset Management has decided to continue the suspension of its income fund series two and has taken independent legal advice on the future of the fund.
In an announcement to the Channel Islands Stock Exchange, the investment manager says the suspension will continue while it awaits the final report of independent accountant BDO LLP, on the recent trading, current financial projections and financial model of Tuita plc and its subsidiaries.
The report is now expected on the week of May 28. This will then be reviewed in conjunction with the legal opinion with a further announcement to be made following a meeting on June 12.
Connaught was looking to resume normal dealing on the fund by May 14, however, the firm’s board of directors agreed at a meeting on May 21 to continue the suspension of the net asset value of the fund and the issue and redemption of units in the fund.
On March 7, Connaught, which is not regulated by the FSA, suspended one of its three Ucis funds, the income fund series one, while it commissioned a review into the true value of the fund. It has since contacted investors to tell them the fund is unable to pay their scheduled quarterly interest payments after bridging lender Tiuta, which is backed in part by the fund, told the asset manager it will be late paying its own interest payments.
The income fund series one has about £120m of assets while the series two fund has about £18m. The income fund series three, which has £10m of assets, has not been affected.
The FSA issued a warning to people who have invested in two funds from Connaught in May 2011. The regulator said it believed the way they have been advertised could be misleading.