Fraud investigators are probing the failed Kratos Ucis fund, managed by discretionary firm Quintillion, following a report by the Public Interest Unit (PIU) which alleges criminality.
The case is now being handled by Action Fraud, the UK’s national fraud reporting centre, having been referred on by the PIU, part of the government’s Insolvency Service.
A member of the PIU team confirmed that the body has submitted a disqualification report, which alleges criminality and, if accepted, would result in a 15-year ban for the former directors of Quintillion. The nature of the criminal behaviour cannot be disclosed at this point in time.
In the meantime, the Financial Services Compensation Scheme (FSCS) has confirmed it has so far paid out the maximum £50,000 in compensation to a client of the firm, with 15 further claims under investigation.
Discretionary firm Quintillion saw its permissions cancelled by the FCA in August 2012 after it failed to pay fees and levies of around £8,400. It was placed into administration two months later and in March of this year the firm was placed in default by the FSCS.
The management team at Quintillion set up the British Virgin Islands-domiciled Kratos fund in 2009 to invest in intellectual property rights, targeting an internal rate of return of 35%. The fund is understood to have raised over £2 million.
Investors subsequently received little communication on the fund or its holdings. An action group set up by investors said up-to-date information had proved difficult to obtain owing to the firm’s liquidation and because it had ‘no insight into where the money invested had gone’.
Mazars, which acted as liquidators of Quintillion, said it had only been able to recover £1,959 from Quintillion’s bank account and its directors had overdrawn loan facilities of £220,767. Joint liquidator Tim Hewson also said his investigation had been hampered by ‘the lack of co-operation from the directors’.
A spokesperson for the FSCS said the claim that has been compensated fell under the investment intermediation sub-scheme. If the remaining claims are approved they would also fall under the investment intermediation funding class.
Quintillion was formed in 2007. In the run-up to the Kratos fund’s launch, the group said it would invest in a range of Dragons’ Den-style line-up of new innovations.
If anyone has any further information on Quintillion or the Kratos fund, please contact Howard Clapham, who is head of the investor group, at firstname.lastname@example.org