According to a copy of the minutes obtained by International Adviser (available below), a partner at KPMG, which has now been appointed as receiver of the fund, said three of the law firms which were lent money by the fund were not party to what had otherwise been described as a rigorous due diligence process. Worryingly, these three firms account for over 80% of the loan portfolio.
In the preliminary findings given by KPMG at the EGM held on 11 December last year, it was also revealed that some of the law firms to which money was lent used this money for purposes not contractually allowed under the terms of the loan and others are contesting the amounts owed.
KPMG also revealed that a report from Baker Tilly, commissioned by the fund, had warned there were significant risks of lending to two of the panel law firms and that one in particular was subject to a winding up petition by HM Revenue & Customs when the report was produced.
The confidential document catalogues worrying mismanagement from the fund’s investment manager Tangerine Investments and its principal Tim Schools, and goes on to reveal clear holes in the management of the loans and a serious lack of trail documentation.
However, towards the end of the document, the directors state that, on “review of the reports and other relevant information, they had come to the conclusion that… the fund is not a Ponzi Scheme”.
To read copy of the EGM Minutes click here
