FCA confirms entry of Blue Gate Capital into administration
The UK Financial Conduct Authority (FCA) today confirms that Blue Gate Capital Limited has entered administration. The company has appointed insolvency practitioners to conduct the liquidation of the firm.
Let’s recall that, in December 2020, the FCA publicly censured Blue Gate. Back then, the regulator ordered Blue Gate to pay £203,007 in restitution to investors who lost money investing in the Connaught Income Fund, Series 1.
The Fund, also formerly known as the Guaranteed Low Risk Income Fund Series 1, is in liquidation. It was an unregulated collective investment scheme (UCIS) which commenced operation in March 2008, providing short term bridging finance to commercial operators in the UK property market.
Blue Gate took over as Operator of the Fund from Capita Financial Managers Limited (CFM) on 25 September 2009 and remained as Operator until the Fund’s compulsory liquidation on 3 December 2012.
The FCA found, and Blue Gate agreed, that it breached Principle 2 of the FCA’s Principles for Businesses (the Principles) because it failed to conduct adequate due diligence on the Fund prior to taking it on, failed to investigate potentially serious issues with the Fund of which it was aware and failed, throughout its tenure as Operator, to establish that the Fund was operating as it was supposed to.
The regulator also found, and Blue Gate agreed, that it breached Principle 7 of the Principles because it failed to communicate with the Fund’s investors in a way that was clear, fair and not misleading. These failings would have resulted in the imposition of a penalty of £10 million, which would have been imposed if Blue Gate had not established it was in serious financial hardship.
Blue Gate had until January 8, 2021 to pay the restitution to the FCA for onward distribution to investors. The regulator explains that it subsequently issued a statutory demand for payment.
Blue Gate’s shareholders have taken the decision to place the business into insolvent liquidation via a creditors voluntary liquidation.
Jason Mark Elliott and Craig Johns of Cowgill Holloway Business Recovery LLP were appointed Joint Liquidators on March 1, 2021. The FCA will make a claim in the liquidation, as a creditor, for the restitution amount.
Blue Gate’s affairs are now in the hands of the appointed Joint Liquidators. Any creditor of Blue Gate is advised to contact the liquidators via john.fitzgerald@cowgills.co.uk or 0161 672 5763.