Yahoo News Firms linked to founder of collapsed West Ham sponsor Basset & Gold "made millions" from fees
Administrators to the collapsed London pensioner bond firm Basset & Gold are examining why companies linked to the founder charged a fee of 20% - potentially £7 million - for investing its savers' money.
The West Ham sponsor collapsed last month amid allegations of mis-selling as it emerged nearly all of the tens of millions of pounds savers had put into the scheme had been invested into lossmaking payday lender Uncle Buck. Uncle Buck went bust in March, triggering Basset & Gold's demise.
Today, the administrators said they would be investigating why it was that Uncle Buck was contracted to pay 20% of all the money it received from Basset & Gold to companies owned by the bond firm's founder Hadar Swersky, an Israeli businessman.
If those fees were paid in full, Swersky companies could have made £7 million.
Sources said such a burdensome fee would have put extra financial strain on Uncle Buck as it tried to repay the high returns demanded by Basset & Gold.
The administrators' report states that the 20% was contracted to be charged to Swersky's company Smart Box Capital "or other companies under [his] common control."
The Evening Standard has been unable to contact Swersky for comment.
Pensioners yesterday told the Evening Standard
they were assured their money was going into helping hundreds of small businesses and claim no mention had been made of payday loans. Administrators Harrisons Business Recovery & Insolvency today repeated that the Financial Services Compensation Scheme had said it would consider compensation for claims of mis-selling.
The administrators said: "The bondholder funds continued to be invested in UB despite the heavy losses it was making over a number of years. We shall need to investigate the reasons for continuing to invest... given the losses UB was incurring and what due diligence was performed and relied upon over time by the directors of B&G".
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