Liquidators claim millions of pounds of investor cash is missing from an offshore financial firm ‘tainted with illegality’
PwC has reported the collapse of part of the Louis Group based on the Isle of Man has left 700 investors who paid the firm £60 million with just £10 million to share.
The largest investor gave the firm £5 million, but the average investment was between £10,000 and £30,000.
Many are UK based on British expats.
The Louis Group is a South African financial firm with several companies on the Isle of Man. Some of the group went into liquidation in 2012 and investors were left unable to withdraw their cash.
PwC were appointed as liquidators.
Catalogue of financial failings
The investments were made across several funds, including the Louis Group Structured fund, and Louis Group Structured Capital, which were both promoted as low risk.
PwC’s report accuses the group and founder Alan Louis of failing to manage hidden fees, conflicts of interest and significant sums paid into Louis’ personal bank accounts.
Liquidator Gordon Wilson alleged “a taint of illegality across the vast majority of the business carried out by this group in the Isle of Man”.
Wilson also claims investigators found dubious financial documents prepared sometime after the transactions took place, missing files, questionable accounting records and suspected false accounting.
The Louis Group advertised the founder’s family co-invested in six low risk property investments – but none of the funds received any money from the family and PwC accuses Alan Louis of switching money out of the funds into his own bank accounts.
PwC claims several million pounds was transferred personally to Alan Louis or companies under his control in 2009.
Founder denies allegations
“Around £60 million was invested but only around £10 million is left to repay investors,” said Wilson.
Louis denies the PwC claims, suggesting another audit by Mazars offers different conclusions.
“We will be submitting a comprehensive reply to this document, which will obviously cover the issues raised,” he said.
“Suffice only to say that the first report written by PwC was found to be wholly incorrect by Mazars and this current report withholds critical information to complete the picture – a wholly subjective analysis and wrong.”
Louis also explained that the money transfers were acceptable practice for the group.
