The property arm of Guildford-based Bentley-Leek took the loan after it put 142 Sipp investors into a Dubai and UK property venture that failed to deliver the intended 10% annual return. The loan was used to kick start further development of the Dubai properties.
Hornbuckle Mitchell, which provides the Sipp, said investors’ permission had not been sought for the loan.
Mustafa Dervish, managing director of Bentley-Leek, said the FSA had visited the firm in a ‘supervisory role’.
‘They asked for information and will get what they need; nothing is hidden from them,’ he said.
‘It is difficult to understand what the motives are. The FSA has come into our offices and has gone away.
I would describe it as more supervisory than enforcement. We are not saying it will not become enforcement, but at the moment that is how it is.’
David White, managing director of Hornbuckle, said: ‘We cannot comment because they are working with the regulator, but we are doing everything we can to help investors.’