Citywire printed articles sponsored by:
View the article online at http://citywire.co.uk/new-model-adviser/article/a407867
Lifemark paid 10% commission to Ford’s offshore company
by Iain Martin on Jun 14, 2010 at 09:00
(Update) Keydata founder Stewart Ford has confirmed that his family owns the British Virgin Islands company to which Lifemark, the backer of a range Keydata products, paid £38 million in fees.
The 25,000 individuals who invested around £350 million into Lifemark via Keydata products were unaware that 10% of their money had been paid to a trust, owned by Ford and his family.
The £38 million in fees paid to LAS Global, owned by a Ford family trust, were only revealed to investors when a draft document was mistakenly posted on the Lifemark website last week.
The document was meant to alert investors about contracts between LAS Global, Keydata and Lifemark which had not been revealed when Lifemark bonds were listed on the Luxembourg Stock Exchange or literature from Keydata products.
'Standard' terms
Ford’s spokesman initially declined to comment on LAS Global but has since confirmed it was owned by a Ford family trust. He claimed its 10% fees for negotiating investment, administration and distribution contracts for Lifemark were standard for the industry.
‘Information about these payments, which were fully in line with comparable industry operating charges, could be accessed through public records in Luxembourg and had been disclosed to the Lifemark auditors (PwC Luxembourg), the Lifemark bond trustee and the Luxembourg financial regulator, the CSSF,’ said Jack Irvine, spokesman for Ford (pictured below).
‘All of Lifemark’s commission payments were approved in advance by the trustee, on behalf of bondholders. The Lifemark custodian bank was fully aware of the nature and size of the commissions,’ he added.
The draft document also discloses the £8.1 million upfront commission paid to Keydata Investment Services. Keydata could also have earned up to £40.1 million in trail income from Lifemark-backed products, according to the document, which has since been removed from the Lifemark website.
‘Keydata acted in accordance with the applicable regulations and standard industry practice applicable at the time to the disclosure of operating charges of a product provider,’ stated Jack Irvine, executive chairman of Media House International, acting for Ford.
Prev Close:
More FTSE charts & pricesPrev Close:
More FTSE charts & pricesPrev Close:
More FTSE charts & pricesNews sponsored by:
Today's top headlines
More about this article:
More from us
- Liquidation looms as Lifemark funding deadline hits
- Keydata investors face up to 14-year wait for refund
- Keydata: investors to take legal action, concerns over Lifemark assets
- Lifemark talks could leave FSCS liable for £350m
- Keydata: £12.3m of Lifemark bonds in default
- Keydata: Lifemark administration extended by six months
- Keydata: PwC says Lifemark payments will resume
4 comments so far. Why not have your say?
Harry K
Jun 19, 2010 at 10:50
And still the FSA are mute. They are passing the parcel faster than at an Afghan birthday party. It ain't us it's the FSCS. The FSCS a playing sillly buggers and the system rewards procrastination - the longer it takes the bigger PWC's pay packet. (And all the other apparatchiks).
report thisAnonymous 1 needed this 'off the record'
Jun 19, 2010 at 11:32
When are the FSA going to get their act together ? Lifemark, Keydata, Arch Cru, NDF - not to mention a platoon of banks - all somehow slipped through the net. As you say, Harry, it seems another case of ' not our fault, guv '.
Overpaid, underperforming, full of their own importance - England's World Cup team ? Yes. The FSA ? Yes.
report thisAnonymous 2 needed this 'off the record'
Jun 19, 2010 at 11:56
What is needed is a name change for the FSA who can then all wear new hats and the new named regulator can start again with a clean sheet.
First priority is to pay them all off with a golden handshake.
The following day you then need to re-employ them all in their new jobs at a much higher salary of course.This in order to attract the right sort of competent professionals just like they had before.
The compulsory golden hello payment will be needed without saying.
They can then get down to the job of blaming IFAs for everything in hindsight that has gone wrong, including paying for dodgy companies like Key data that most IFAs didnt touch with a barge pole
I shall look forward to getting lots more bills as its obviously all my fault
report thisPeter Hilton
Jun 20, 2010 at 16:24
Keydata (AKA - Stewart Ford) was awarded accolades and awards by his UK peers in 2005, 2006,2007 and 2008. (so don't blame it all on the FSA)
First he "lost" £100M of UK savings, but didn't tell anyone - then he sent my savings overseas, along with another £350M (to another company he owned - forgot to tell me about that)) and then paid himself £40M up front in undeclared "fees" (in addition to the £30M declared fees) from that offshore company he owned to another offshore company he owned. and selected and "valued" the assets he bought for me using another offshore company he owned. But all this occurred outside the FSAs sphere of influence - so it seems no compensation needs to be paid. Also Stewart says there actually were not any problems at all until the FSA and the CSSF stuck their bargepoles in. He was running the whole show - so he should know. And he was an Approved Person subject to the FSAs APER code of behaviour.
There seems to be a little matter of multiple undeclared Conflicts of Interest to be resolved here. The SFO will sort it out when they have finished their tea.
report thisleave a comment
Please sign in here or register here to comment. It is free to register and only takes a minute or two.