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Connaught administrator under investigation by accountancy body

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  • 10/10/2012
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Connaught administrator under investigation by accountancy body
The administrator of bridging funder Connaught Asset Management is under investigation by an accountancy body for alleged misconduct in a separate case involving high street fashion chain Miss Sixty.

Connaught ran the Income Series 1 fund, which marketed to IFAs and, at its height, was valued at £118m, along with two smaller funds.

All three have since been suspended after issues with payments to bridging lender Tuita.

Peter Hollis, a partner of KPF Advisory who was appointed administrator to Connaught last month, is under investigation by the Association of Chartered Certified Accountants (ACCA) over his role in the company voluntary arrangement (CVA) of Miss Sixty in 2010.

In that case, a High Court judge concluded there was a “prima facie case of misconduct” on the part of Hollis and a colleague over the way they handled the CVA.

A complaint had been brought by two creditors in Miss Sixty, who felt they had been treated unfairly.

Hollis later said he was “disappointed” with the conclusions reached in the case.

As part of his role with Connaught, Hollis will be investigating the role of the company and directors in the collapse of two funds previously held within its portfolio.

In documents from the 2010 Miss Sixty case, Mr Justice Henderson concluded that Hollis had “lost a proper sense of objectivity” in his handling of the CVA.

He said Hollis permitted Miss Sixty to dictate the crucial terms of the arrangement, while “misrepresenting the true position to the creditors”.

Ravi Puryag, a senior investigations officer at the ACCA, said an investigation into Hollis was “drawing to a close.”

“[The] ACCA has been investigating Mr Hollis’ conduct in light of comments made by Mr Justice Henderson.

“As per ACCA’s standard procedures, upon completion of our investigation, the matter will be referred to an independent assessor to determine whether disciplinary allegations should be progressed to an independent disciplinary committee for a disciplinary hearing.”

A spokesperson for the Connaught Action Group, which claims to be in contact with investors and IFAs representing over half of the capital in the Series 1 fund, called for the removal of Hollis.

“‘We’re conscious that a High Court judge, more than two years ago, accused Peter Hollis of intentionally misleading creditors,” he said.

“As creditors of Connaught Asset Management, we’re keen to replace him with an insolvency practitioner with an unblemished reputation, that creditors can trust.”

Hollis and Connaught declined to comment.

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