The owner of an investment firm that collapsed owing millions faces the prospect of being banned from running a company in the UK.
Kwasi Kwarteng, the business secretary, has applied to the High Court to disqualify as a company director the former Colarb Capital director Shaun Stephen Prince, court records show.
Colarb, formerly known as MJS Capital, sold “high yield” fixed income bonds to private investors but collapsed in February 2019.
The company said it could offer investors “above average returns coupled with security of capital,” and was chaired by Lord Razzall, the Liberal Democrat peer, until he stood down in March 2018.
In his latest progress report published in June last year, liquidator Asher Miller said he had received claims from 563 creditors for £36m – and warned there was little chance of them being paid.
“On the basis of realisations to date and current estimated future realisations we estimate that there will be insufficient funds available to enable a dividend to be paid to unsecured creditors,” he said.
MJS Capital invested the money it raised in traders arbitraging in markets such as commodities, securities and currencies.
In its latest accounts filed in June 2018 months before its collapse, it warned of banking problems such as accounts being frozen or problems opening accounts.
“UK banking has been one of our key challenges up to now […] it has become apparent that the UK banks are becoming less and less willing to work with payment institutions due to the changing regulatory landscape brought on by our decision to leave Europe,” it said.
One of the directors of MJS Capital in 2016 was John Russell-Murphy, who left that year and is believed to have gone on to pitch London Capital and Finance (LCF) mini-bonds to wealthy investors, working as a consultant for a marketing firm.
LCF collapsed in 2019 owing up to £237m to 11,625 investors. The Government eventually agreed to pay about £120m to compensate investors who lost money after an independent report pointed to regulatory failures.
The Insolvency Service declined to comment. Shaun Prince, 41, could not be reached for comment.
