79th Group Operators File for Bankruptcy in Recent Update
The 79th Group, a multi-million pound company, is in turmoil as three individuals connected to it have been declared bankrupt. This development comes in the wake of an ongoing investigation by the City of London Police, which began after significant allegations surfaced against the firm.
Bankruptcy Declaration in Liverpool County Court
Recently, three unnamed persons linked to the operations of the 79th Group appeared in Liverpool County Court. They are now subject to bankruptcy orders while police investigations continue. This investigation previously resulted in four arrests in February 2022 concerning alleged fraud related to the company.
Investments and Allegations of Fraud
Documents reveal that approximately £200 million was invested in the 79th Group. Some sources suggest it may have operated as a Ponzi scheme. In light of this, around 20 companies under the 79th Group’s umbrella have entered administration due to these legal troubles.
- Investments: £200 million total
- Potential fraud: Alleged Ponzi scheme
- Companies in administration: Approximately 20
Regulatory Response
The Financial Conduct Authority (FCA) has taken steps by notifying banks of their responsibilities to assist potential victims of the 79th Group. The FCA is encouraging banks to carefully consider claims from affected investors.
Some banks, such as The Co-operative Bank, have reportedly begun repaying funds to investors who had deposited their money with the 79th Group. Additionally, a bank in Belgium flagged suspicious activities before the arrests took place, curtailing the flow of funds.
Impact on Investors
At its peak, the 79th Group raised an estimated £150 million from investors across various regions, including the UK, Europe, Asia, and the Middle East. Currently, the redemption value owed to approximately 3,700 investors stands at around £203 million.
- Total investment: £150 million
- Redemption value: £203 million
- Number of investors: 3,700
Many investors have reported rolling over their investments, believing they were earning profits on their loan notes. This practice has now come under scrutiny as the investigation unfolds.
Legal Proceedings and Future Developments
The City of London Police initiated their investigation in September 2024, following multiple complaints. Recently, three of the individuals arrested became involved in seeking a judicial review, challenging the police’s actions related to their arrests. A judicial review examines the legality of actions taken by public bodies.
Due to negative media coverage regarding the 79th Group, leadership faced significant challenges in securing further investments, leading to immediate redundancies. Staff were informed of their job losses in early April.
Amid the administration process, approximately £1.2 million has been seized from various accounts associated with the 79th Group, including offshore accounts from the USA and Canada, with an additional £300,000 expected to be claimed by administrators.
The ongoing investigation into the 79th Group continues to raise concerns, affecting many investors and employees significantly.
