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Merchant House ponders future options as share suspension continues

Merchant House Group is considering a number of options including attracting new investors and a potential sale, Money Marketing understands.

The group includes structured product business Merchant Capital and IFA arm Merchant House Financial Services. It has had its shares suspended on Aim since mid-April pending the outcome of a financial review.

Last month, its nominated adviser, Cairn Financial Advisers, resigned, with a replacement yet to be announced.

Merchant Capital custodian Pritchard Stockbrokers was suspended by the FSA from regulated activities in February.

In March, all £350m of clients’ non-cash assets were transferred to new custodian Reyker Securities but the regulator froze cash assets held by Pritchard. Mazars, the administrator of Pritchard, estimates a £3.4m shortfall in cash assets.

In March, Merchant House Group told Money Marketing it was not aware of a £250,000 unsecured loan to Pritchard which is listed in Pritchard’s 2010/11 accounts.

Shares were originally suspended in March after the board became aware that 14 per cent of the firm’s enlarged share capital had been issued without being announced or admitted to trading on Aim. The shares were restored at the start of April but suspended again on April 20.

Merchant House FS, an AR of Tenet, has around 90 advisers. Glasgow Rangers owner Craig Whyte was Pritchard company secretary and is director of Liberty Capital, a British Virgin Islands firm which owns 10.8 per cent of Merchant House Group.

A Merchant House Group spokesman says: “We do not comment on market speculation.”

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