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Global Holdings pins hope on Orion Life/SLS court action

Global Holdings International is pinning its hopes on court proceedings launched by Brunei-based insurer Orion Life Insurance and Manx-based Interalia for redress over missing money invested in SLS Capital.

Global Holdings is an independent fund and service provider for financial advisers which placed around £4.7m in SLS through its brokers.

It is thought around £138m was invested in Luxembourg investment vehicle SLS in total with Danske Bank International, Orion Life Insurance, Hansard International and Marks Jacobson also understood to be affected.

A sale of insolvent structured product distributor Keydata Investment Services crumbled earlier this week after administrator PricewaterhouseCoopers uncovered information that suggested £103m of assets invested by the firm with SLS had been “liquidated and may have been misappropriated.”

Quarterly Income payments from SLS Capital had not been paid since October 2008 but the income shortfall to investors had been filled by Keydata’s own corporate funds.

Global Holdings International director David Robbins says it made sense for Orion Life and Interalia to launch legal proceedings against SLS and as a combined entity they would be more powerful and more likely to benefit all affected bondholders.

He says: “Orion pointed out that they had been a heavy investor into the bonds and Interalia had also been an investor in the bonds so it made sense for the two to pair up being institutional investors.

“For somebody who isn’t as financially secure as an institution such legal action is quite a daunting task. In them doing so as a joint venture it’s going to benefit all bondholders and it won’t cost clients additional legal fees by them taking the lead.”

Robbins says the firm’s financial advisers had been kept informed of the income problem since October last year when payments stopped.

He says: “From the moment the coupon payments stopped we were trying to find out what was going on and like everyone else it seems, we got constant blanks.

“Our advisers’ clients knew there was a problem instantly as income payments stopped and in hindsight it’s a shame that Keydata didn’t come forward then Elias would have perhaps still been alive and able to answer questions.”

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