An investment bank embroiled in a potential fraud investigation that counts former England football manager Sven-Göran Eriksson among its victims has missed another self-imposed deadline to return millions of pounds to shareholders.
First London Group, the holding company of former London-listed First London, wrote to shareholders in May saying they would be able to cash in their investments by 30 June, the latest in a series of expired deadlines. Shareholders were first promised a £173m payout in October 2009 when First London Group announced that the bank's assets had been sold to a mysterious company called Swiss Commodity Holding (SCH). Investors have still to receive a penny.
One disgruntled investor said: "It seems to have all gone quiet. We've heard nothing more. It's just rubbish. They're just buying time continually. Maybe they think that people will get fed up and go away."
First London, which was listed on junior stock market Plus, is now in administration. It attained a high profile in 2009 after supposedly guaranteeing a £5m investment by a consortium of anonymous Middle Eastern businessmen who appeared to have bought Notts County FC. In a move that astonished the sporting world, County installed Eriksson as its director of football with a contract gifting him €11m (£10m) of SCH shares. It soon became clear that there was no money and the deal collapsed.
It later emerged that Russell King, a convicted fraudster who fronted the football deal as well as SCH, had taken control of 49% of First London by claiming he was managing billions of dollars for the Bahraini royal family.
First London was later referred to the Serious Fraud Office by the Financial Services Authority, which stated: "The acquisition of control occurred without the FSA having been given the prior notice which the law requires." Despite that transaction being reversed, the SFO is still understood to be looking at the conduct of First London, its directors and influential shareholders, with a view to launching a full investigation.
Meanwhile, a report by administrator AG Associates, filed with Companies House, said Notts County had lodged a claim for the £5m investment. The document also raises questions over the legitimacy of a charge on First London Group, lodged by a company called Monmay, which is linked to former First London representatives. "I do not believe this is a valid floating charge," wrote AG Associates' Hasan Mirza.
First London Group director Andy Turner did not return calls. Previously, the bank claimed it had been duped by King.
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