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FSA “deliberately manufactured” Keydata administration, says Ford spokesman

The FSA “deliberately manufactured” the insolvency and administration of structured product provider Keydata, according to its founder Stewart Ford.

A statement from Ford’s spokesman Media House chairman Jack Irvine says the regulator forced Keydata into administration on the grounds of a £5m tax bill but this was a “red herring” and its demise was due to the FSA’s draconian intervention. 

He says there was no bill but a “contingent liability” to HMRC if it was accepted that there had been breaches of the Isa regulations of plans which had not been listed on a relevant exchange at least five years before their maturity.

He says: “There was no £5m tax bill but if there had been, Keydata had the cash and access additional financial resources that would have been more than sufficient to pay such a bill.   After all, at the time, Keydata was worth more than £60m and had no significant third party debt.  What made the FSA think that such a company could not meet a £5m tax bill if it had to?” 
 
Ford’s spokesman insists the firm was “well down the track” to reaching an agreement with HMRC about utilising the “simplified voiding procedure” which would have dealt with Isa issues but the FSA intervened. 

He says: “For reasons best known to it, and as yet unexplained, the FSA considered it appropriate to intervene and prevent Keydata reaching a ‘simplified voiding’ agreement with HMRC that would have dealt with the Isa issues once and for all without any cost or distress to investors.

“The actual cause of Keydata’s insolvency was the FSA’s draconian action in removing all of Keydata’s regulatory permissions at a stroke before Keydata management had been given any opportunity to respond to the preliminary findings of the FSA’s investigation enforcement team.”

The FSA refutes Ford’s allegations concerning its actions regarding Keydata.

A spokeswoman says: “Keydata was placed into administration last June by the High Court. At no point did the management of Keydata oppose this application.

“HMRC established that several Keydata products were not eligible for Isa status which gave rise to a significant tax liability which Keydata had no means to pay. This liability put its investors at significant risk. The FSA is continuing to investigate this issue. In addition, the Serious Fraud Office’s investigation into Keydata continues.”

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Comments

There are 10 comments at the moment, we would love to hear your opinion too.

  1. so it boils down to who is to be believed, Ford or the FSA. No contest,

  2. forget investigating Keydata what about investigating the FSA!!!

  3. “structured product provider Keydata”

    In the interests of accuracy and political spin should this not be changed to “Structured product Adviser” ?

    Although we all know that Keydata were a product provider the Seb Blatters at the FSA just can’t see it and insist that Keydata were regulated as Advisers.

    As they willfully refuse to accept goal line technology the record has to include the word adviser no matter what common sense dictates

  4. And so it trundles on – into the second year with administrator’s fees now approaching £12M and rising.

    The FSA and the FSCS sit on their hands, and only occasionally pop up just to tell us all how clever and “pro-active” they are. And goodess knows what the SFO is sitting upon. Laying down on the job seems a better description.

    PWC rack up the bills and apparently achieve nothing at all (since Christmas we’ve been going backwards – we victims have no confidence that they have any idea what they are doing.)

    Message to all these highly paid people – there are 30,000 people out here – the victims in this debacle — we have now gone through a full twelve months of uncertainty and worry – stop telling us how clever you have been and bring this scandal to a conclusion – AND BE QUICK ABOUT IT.

  5. Who is going to get grip off Hector and the team? Jail would be too good for them. I think they should be made to work in an IFA’s office for 1 year without pay. Make the punishment suit the crime!

  6. “The FSA refutes Ford’s allegations concerning its actions regarding Keydata.” Funny that ~ I thought the FSA “doesn’t comment on individual cases”.

    So the FSA will be taking out a writ against Ford to defend its reputation? Can’t have anyone out here impugning the integrity of our beloved regulator, can we?

  7. As the first poster says “so it boils down to who is to be believed, Ford or the FSA”. I don’t think it is a matter of “no contest” as no one has been presented with evidence to be able to make an informed decision. I suspect they are both telling some truths, but both are being selective.
    The main truth is that consumers have lost money and the FSAs action does not appear to have protected investors, but instead accelerated/crystallsied potential losses.

  8. Charles Bunbury 28th June 2010 at 12:41 pm

    From inception of the Financial Services Act 1986 and the Chancellor of the Exchequer (treasury) ultimately at the top responsible for regulated investment & non investment business. FSA.GOV.UK has had a freehand to do what the like, when they like with no concern after all FSA.GOV.UK is immune from paying damages. It all well and good coming out now and saying how bad Keydata is being treated. The industry or should I say Ifa, large firm and the thousands of sole trading IFa, should have challenged this position but it was more of case of, “We are alright Jack” to hell with the rest. I wonder how much different the new regulator will be? When will you all learn absolute power corrupts? As long as we go on allowing our government to yield this level of power in the hands of regulators who are not accountable us it a case of shut up, the no difference between FSA.GOV.UK, Chancellor of the Exchequer, HMRC and the panel of solicitors and accountants employed to keep us in our place, its time you all wake up and smell the Bull you know what.

  9. As PWC have managed to pay themselves so handsomely for months of dithering it proves that Keydata could have paid a tax bill, so perhaps Mr Ford is telling the truth. Where is the 103 million that the SFO “found”.Why is that not back where it belongs? If the “Authorities” know so much why has the man in question not been arrested for a Ponzi scheme?

  10. My wife and I are retired and we invested signicant sums of money in Keydata. We have worked hard all our lives to save for our retirement, and we are now facing despair if we loose our investment. We invested via an IFA and were told it was a low risk investment with a good return. Frankly, we don’t give a hoot as to who is right or wrong, we just want to be compensated for this fiasco, and our investment returned, and QUICKLY; not when we’re 10 foot under!!

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