MPs call for investigation into FCA's handling of WealthTek scandal
Calls for an investigation into the Financial Conduct Authority’s (FCA) handling of the WealthTek scandal have been made by a number of prominent Conservative politicians. The MPs, led by Shadow Business Secretary Kevin Hollinrake and Tory leadership hopeful Tom Tugendhat, have written to Chancellor Rachel Reeves pointing to “deeply concerning allegations” that the financial services watchdog did not act on whistleblower claims of potential fraud. In his letter, which also includes signatories David Davis and Andrew Mitchell, Mr Hollinrake says it is important the allegations are investigated and if there has been a failure, that a compensation scheme should be set up. Read more: Failed High Street Group finally liquidated as investors left £123m out of pocket Read more: Fairstone announces two acquisitions and launch of new Hampshire hub Tyneside-based wealth management company WealthTek was closed down by the FCA in April last year amid concerns about fraud and money laundering. The firm was placed into special administration with subsequent investigations uncovering a financial black hole of about £80m, made up of an asset shortfall of £70.7m and a client money shortfall of £9.7m. Wealthtek did not have permission to hold client money or custody assets, the regulator said. The FCA told a court earlier this year that the suspected misconduct of WealthTek founder John Dance is potentially “one of the largest frauds perpetrated by an FCA regulated individual at an authorised firm”. Mr Hollinrake’s letter follows public testimony of whistleblower Gary Stockdale, formerly an analyst at WealthTek between 2011 and 2021, who first took his concerns to the regulator in 2021 and was subsequently asked to fill out a questionnaire. While the FCA is now conducting a criminal investigation into WealthTek and Mr Dance, a judge recently approved plans to return client money and assets - which have been frozen since the firm was shut down. The task of identifying what the 1,323 former clients are owed is said to have been made difficult by issues with the accuracy of WealthTek’s books and records. Mr Hollinrake said he and the other MPs have constituents who have suffered significant financial distress amid the scandal and are “urgently awaiting answers”. An FCA spokesperson said: “After identifying potentially criminal activity at WealthTek, we acted to protect investors. We recognise people’s concern and have tried to keep them updated as much as we can. However, given an ongoing criminal investigation, there are limits on how much we can say.”
42,000 South West companies in 'significant' financial distress
Tens of thousands of companies in the West Country are in "significant" financial distress, a new report has revealed. The latest Begbies Traynor Red Flag Alert research, which provides a snapshot of British corporate health, found 42,111 businesses in the region in difficulty in the second quarter of the year - a quarterly increase of 7.3% and an annual rise of 40.1%. Weakness in consumer confidence and ongoing economic concerns are putting considerable pressure on businesses across a range of sectors, the report said. According to the findings, there are now 7,312 construction businesses in difficulty, making it the most troubled sector in the West of England. There has also been a rise in the number of media, health and education firms facing problems, Begbies Traynor said. More than 2,500 South West companies moved into the "critical" financial distress category, meaning they are expected to enter insolvency over the next 12 months. The state of the construction, real estate, hospitality, and financial and support services sectors was highlighted as a particular concern. Julie Palmer, partner at Begbies Traynor, said: “It looks like 2024 will prove to be another tough year for UK businesses. Six months in, and we’re seeing clear signs that financial distress is growing across almost every sector. “It is a particularly difficult situation for businesses in consumer facing sectors, such as hospitality. While a fall in inflation to more palatable levels will likely provide some relief, consumers simply aren’t behaving like they used to and these businesses, who are still grappling with higher costs pushed up by higher wages, are really struggling. This, combined with one of the wettest summers on record, continues to significantly impact trading." Nationally, the number of companies in significant financial distress jumped by nearly 10% in the second quarter to 601,950 businesses, Begbies Traynor said. During the period, UK firms in ‘critical’ financial distress increased by 1.1% to 40,613.
WilliamsAli Corporate Finance acquired by restructuring specialist FRP
Newcastle advisory firm WilliamsAli Corporate Finance has been acquired by national restructuring specialist FRP in an undisclosed deal. The deal, announced via the London Stock Exchange, means WilliamsAli will become part of FRP's North East operation, with the firm's two founding directors, Abu Ali and Phil Williams, becoming FRP partners. The city centre business' team of five will also join FRP. It is FRP's 11th acquisition since its flotation in March 2020, and follows the £3.5m purchase of Welsh corporate finance consultancy Lexington earlier this summer. New results for FRP show the recovery specialist grew revenue by 23% to £128.2m in the year to the end of April, 2024, as adjusted pre-tax profits were boosted by 39% to £33.7m. Read more: Healthcare entrepreneur donates £1.25m to set up Newcastle University academy Read more: Record-breaking revenue and profit for Flutter Entertainment's Tombola Geoff Rowley, CEO of FRP Advisory said: "This acquisition complements FRP's existing strong presence in the North East in a target region for the expansion of our corporate finance offering. We are pleased to welcome Abu, Phil and the team, which will now go to market locally as FRP Corporate Finance, to the business. Our new colleagues share our values and ambitions, and will no doubt make a strong contribution as we continue to grow." Abu Ali, joint founder of WilliamsAli, said: "Phil and I are delighted to be joining FRP Corporate Finance. We are incredibly proud of the track record of WIlliamsAli in the North East market to-date, and we are excited about how we can further build on this within the FRP Group. With the additional infrastructure, resources, and service lines now available to us, together with closely aligned values, we are confident this will be a hugely positive move for our team and clients in the North East region." WilliamsAli was launched in 2020 following a buyout of Leathers Corporate Finance, with the stepping down of chairman Michael Leather. Its team have since been involved in a range of merger and acquisition activity in the region, including private equity-backed deals. The firm supported shareholders of Tyneside engineering group Houghton International when it was acquired earlier this year by US-based IPS (Integrated Power Services). And in autumn last year it advised on the management buyout of utilities tech firm Everflow.
BNP Paribas secures deal for new Solihull HQ
A finance firm is moving its West Midlands HQ to a new home. BNP Paribas Personal Finance UK has agreed a deal for a new office at the Air building, in Solihull town centre. The 25,000 sq ft offices will be home to 800 staff from January. The UK division of the French banking and finance group provides consumer finance products to business customers such as retail and motor finance and personal loans. It said the move to Homer Road had come after a considerable period of growth and provided the business with a modern platform to continue its development. Email newsletters BusinessLive is your home for business news from across the West Midlands including Birmingham, the Black Country, Solihull, Coventry and Staffordshire. Click through here to sign up for our email newsletter and also view the broad range of other bulletins we offer including weekly sector-specific updates. We will also send out 'Breaking News' emails for any stories which must be seen right away. LinkedIn For all the latest stories, views and polls, follow our BusinessLive West Midlands LinkedIn page here. It has been based in Solihull for more than 50 years and is currently in Chadwick House. Chief executive Stephen Hunt said: "Moving to a new headquarters marks another key milestone for our business and, having been part of the Solihull community for over 50 years, I am delighted to be continuing this connection to the area as well as the wider region. "Not only will this space help us to continue to contribute to the local economy, it will also ensure that BNP Paribas Personal Finance UK has a modern, flexible and efficient working environment that will support our colleagues, particularly as we adopt a more agile way of working." Deputy chief executive Ricardo Mantovani has been overseeing the move. He added: "Our new premises, located in the heart of Solihull, is the ideal location to start this new chapter - one that will take the business to the next level and enable us to operate in a manner that is efficient, innovative and collaborative." Solihull Council leader Cllr Ian Courts said: "Their decision to base their HQ in Solihull was also based on their desire to become an even more sustainable business and to reduce their company's carbon footprint which this new premises will help them to achieve.
Wetherspoons boss Tim Martin nets nearly £10m by selling shares
Sir Tim Martin, the Devon-based boss of pub chain Wetherspoons, has netted nearly £10m after selling more than one million shares in his company. The outspoken entrepreneur, who is also the firm's chair, has sold 1.36 million ordinary shares at a price of 739p apiece. The reasons for the sale are unknown but it means Sir Tim has reduced his stake in the business to 24.58% - or 30.3 million shares. The vocal Brexit supporter, who lives in Exeter and was knighted in the New Year's honours list, founded the company in 1979 after buying his first venue in Muswell Hill, London. He initially called it Martin’s Free House but changed it to JD Wetherspoon the following year. The pub chain now has more than 800 UK sites and employs 43,000 staff. In January, Sir Tim was named the top taxpayer in the South West of England after paying a whopping £167.1m in tax last year. A total of 12 people or families from the region were named on the latest Sunday Times Tax. Sir Tim ranked 5th in the UK overall. Earlier this month, Wetherspoons revealed a boost in sales as it continued to sell off a number of its UK sites. The pub giant reported life-for-like sales increased by 5.8% in the 10 weeks to July 7 despite unseasonably wet weather.
Nationwide's takeover of Virgin Money gets full regulatory approval
Nationwide Building Society's £2.9bn takeover Virgin Money has been cleared by the sector's two key regulators, paving the way for the deal to complete this autumn. Shareholders of both lenders were told the Financial Conduct Authority and the Prudential Regulation Authority have approved the move, first announced in March. It means a timeline is now in place for the merger that will create the country's second largest provider of loans and mortgages. It is hoped the deal will complete by October 1, with cancellation of Virgin Money's shares on the London and Australian stock exchanges on the same day. The key regulatory hurdle follows clearance from the Competition and Markets Authority in July, when the watchdog said the takeover did not realistic reduce competition across owner occupied and buy-to-let mortgages and credit cards. Read more: First Northumberland company gets Northern Powerhouse Investment Fund backing Read more: WilliamsAli Corporate Finance acquired by restructuring specialist FRP Nationwide has now announced its deputy chief financial officer, Muir Mathieson, has stepped up to become chief financial officer and executive director. He replaces Chris Rhodes, who is standing down from the Nationwide board in anticipation of becoming chief executive officer of Virgin Money. The challenger bank's current chief executive, David Duffy, is due to retire once the deal is completed. Nationwide's full plans for Virgin Money are yet to be developed, but the mutual has already promised to address IT and customer service issues at the bank. It also plans to keep the Virgin Money brand in the short term, though it has agreed with Richard Branson's Virgin Enterprises that it will retire the name over a six-year period. Swindon-based Nationwide has also said it will keep Virgin Money branches everywhere where the combined group is present, at least until the beginning of 2026. That pledge is subject to existing Virgin Money plans for branch closures which have formed part of a restructuring at the Newcastle and Glasgow-based bank. The joined group will comprise 25,000 staff and 700 branches serving 24.5m customers. At the time of the initial takeover announcement, Nationwide said it had no plans to "make any material changes" to the size of Virgin Money's workforce in the near term, and that it would protect the existing contractual and statutory rights of Virgin Money staff, including pension arrangements and redundancies policies. Earlier this summer, at Nationwide's AGM, chief executive Debbie Crosbie said huge consideration had been given to the risks and opportunities in buying Virgin Money but that building society bosses were confident of its profitability. She pointed to the bank's range of credit cards as one of the reasons for the decision to buy it.