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Tiuta Plc enters administration

Tiuta Plc has entered administration.

The FSA has confirmed it approved the decision on 11 September but the decision still needs to be approved by the courts.

The move comes after its main source of funding, Connaught Asset Management, appointed administrators this week.

A statement from Tiuta says: “Following the administration of Tiuta International as the principal lending arm, a decision has been taken with reflection and approval of the FSA to place Tiuta Plc into administration. The process has yet to be completed and this step has been taken to preserve the integrity of the underlying business, the reputation of the Tiuta brand and also the lending platform.”

Money Marketing revealed today that the directors of Connaught Asset Management have placed the company into administration. Two Tiuta subsidiaries, Tiuta International and Tiuta Development Finance, used the Connaught Series 1 and Series 2 Ucis funds to fund their lending.

Peter Hollis of KPF Advisory was appointed the administrator of CAM on 18 September.

Last week, Money Marketing revealed 92 per cent of investors voted in favour of placing the £118m Income Series 1 fund, which provided a £105m funding line to Tiuta International, into liquidation.

Last month, Money Marketing revealed Tiuta Plc made a pre-tax loss of £37.8m in the 18 months to 30 September 2011.

The Series 1 fund was suspended in March and interest payments were not made. A review was commissioned to ascertain its true value.

Last month, Money Marketing revealed investors faced losses of up to 50 per cent. An independent review by Duff and Phelps suggested recoveries would be between £46.5 and £53.2m of the £105.5m used to fund Tiuta.

A decision to wind down the Series 1 and £18m Series 2 fund, which was used to fund another Tiuta subsidiary called Tiuta Development Finance, was made in June. A Series 3 fund, which was not linked to Tiuta loans and raised around £22m, was wound down in July due to a spike in redemptions.

CAM bought Tiuta International and Tiuta Development Finance, the Tiuta Plc subsidiaries that used the Series 1 and Series 2 funds respectively , for £1 in June. In July, Money Marketing revealed Tiuta International had been placed into administration by CAM.

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