Merchant House Group has entered administration after failing to pay liabilities relating to the liquidation of its structured product arm Merchant Capital.
Merchant Capital entered administration in January and as a result MHG guaranteed to pay all ongoing custody and administration costs.
Documents prepared by Merchant Capital liquidator Shipleys revealed in February the structured products arm collapsed owing over £1.5m to its creditors including around £325,000 to HM Revenue & Customs.
Former Merchant Capital custodian and administrator Reyker securities this week posted a note on its website saying it has issued winding up proceedings against MHG. The firm was placed into administration on Friday.
Reyker says all client assets and client money relating to Merchant are held safely.
The note says: “Reyker’s safe custody is not affected by the administration of either Merchant or MHG as no structured product invested assets or cash are held or controlled by either of those companies.
”Reyker is pleased to re-iterate that all assets and client money are held safely with Reyker in our safe custody facilities. There is no need for investors or IFAs to do anything.”
It says it expects to be in a position to provide more information in the next few weeks.
In March, Tenet announced it was acquiring all Merchant House Financial Services’ 70 advisers in a deal that saw them join Tenet appointed representative firm Aspire Financial Management.
Tenet also acquired certain business assets of Merchant House Financial Services, which has been an appointed representative of Tenet since 2011, but has not disclosed details of the assets.
Merchant House Group cancelled trading on the Aim market in November after failing to secure sufficient funding.