On June 17, Money Portal was placed into administration with debts of around £55m. Subsidiaries Burns Anderson, Sage Financial Services and Willis Owen transferred to investment vehicle Honister Capital to be run by former Money Portal chief executive Mark Lund and other former board members. Bates was placed into administration, meaning claims could fall on to the Financial Services Compensation Scheme with assets transferred to Honister.
Leading industry figures have called on the FSA to explain why it has allowed the transfer to take place given its tough talk on stamping out phoenixing. Personal Touch Financial Services group sales director Dev Malle says: “Morally, the whole deal is diabolical. What about the creditors who may go into administration as a result? There needs to be more transparency about why the FSA has allowed this to take place.”
Threesixty partner Phil Young says: “It would be useful for the FSA and other parties involved to make public some of the details of the deal to reveal whether there have been any changes to the rules or whether an exception has been made.”
PMS managing director John Malone says: “The FSA must be much tougher and be clear on the rules.”
Positive Solutions chief executive Jim Reeve says: “For the FSA to say one thing and then allow people to do something that is seemingly against that is confusing. It needs to clarify its stance.”
Honister declined to comment and the FSA would not comment on specific firms.
Speaking at the Mortgage Business Expo last November, FSA director of small firms Lesley Titcomb warned the practice was “rearing its ugly head” again and promised to “nip it in the bud”.