A mortgage broker has been put into liquidation, following concerns that over £4 million of client money transferred out of the business has been lost.
Primrose Associates, based in Central London, owes £5 million to creditors. Appointed liquidator of the company, John Kelmanson, partner of accountants KCBS, has said that it is unlikely the money will be recovered.
It has been reported by Citywire that creditors have even contacted City of London Police, as well as the FSA, over their worries about client money.
According to Kelmanson, the £4 million of client money was passed from Primrose Associates to Evaluate Technologies, a mortgage software company that went into administration in May.
A meeting with creditors was described by the insolvency practitioner as “heated”, with creditors in the dark about where the money had been invested.
Kelmanson continued: “They were not shareholders they were members of the public. There are people who lost their life savings.”
He added that client money may not have been kept separate from corporate accounts at the mortgage broker. “We have not seen that at all,” he confirmed.
The website of Primrose Associates has already been taken down and former director of financial planning at the firm, Ian Green, who left the firm in May, has said: “As far as it goes when I was at Primrose, categorically, we did not hold any client money. The only time we took money was in payment for fees.”
He added: “Of course I have no idea what went on since I left at the end of April.”
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