Merchant House Group has refused to rule out delays to Merchant Capital investors’ income payments after the FSA suspended its custodian Pritchard Stockbrokers.
Last week, Money Marketing revealed that Merchant Capital, the structured products division of Merchant House Group, has appointed Reyker Securities as its custodian after Pritchard Stockbrokers was told not to carry out any regulated activities.
The FSA took action based on “serious concerns” that Pritchard Stockbrokers had “failed to arrange adequate protection for clients’ assets when it was responsible for them” and “allowed client money to be used on Prit-chard’s own account and not that of clients”.
A Merchant House Group spokesman says: “Merchant Capital is working closely with the FSA to ensure, if possible, there will not be any delay in the payment of income due but if there is any delay, it will be kept to a bare minimum.”
He adds that investor capital is secure as the firm has a fully reconciled statement of all 25,000 clients’ monies in the segregated account held by Pritchard. Merchant Capital has sent the records of all customer accounts to the FSA in order to facilitate the transfer of assets to Reyker.
Merchant House Group refuses to reveal how much is in the account.
Merchant House Group is 18.2 per cent owned by Liberty Capital, a venture capitalist firm registered in the British Virgin Islands and owned by Glasgow Rangers’ boss Craig Whyte. Rangers went into administration last week. Whyte is also a director at Pritchard Stockbrokers.
The Merchant House Group spokesman says: “We have no concerns about Liberty Capital’s 18 per cent shareholding. It has been a shareholder for three years and has been supportive.
“Craig Whyte is a director of Liberty Capital but has no direct connection with Merchant House Group.”