Investors 'fearful' assets at stake with wealth manager
High Court inspectors probing affairs at Custom House Capital
MORE than 60 investors in Custom House Capital, the wealth manager currently being investigated by regulators, believe their financial futures are at stake in the company, a court has been told.
High Court inspectors are probing the company's affairs and a report on what they have found is scheduled to be given to the court on October 21.
Investors in the firm, which sold property, bonds and shares to clients, were represented in the High Court yesterday by their barrister Raymond Delahunt who said the investors were hearing "alarm bells ringing" about the way the firm appeared to have been run according to Central Bank accounts.
Investors who bought into a mezzanine bond with Custom House are owed €10m.
Meanwhile, there is a shortfall of €13m in respect of trust assets controlled by Custom House.
However it does have a large group of assets.
Bernadette Kirby, a barrister for another investor, said the client had transferred "significant sums'' to Custom House, but was recently informed there may be a problem with investments held by the firm.
Mr Delahunt said an affidavit published several weeks ago by the Central Bank had made investors he represented "fearful" that their money was now at stake and their futures. Mr Delahunt, and other legal representatives, may seek to apply to be notice parties in the probe of Custom House being conducted on behalf of the Central Bank.
A senior regulator at the bank, Noel Thompson, recently swore an affidavit about preliminary investigations at Custom House Capital.
In this affidavit, he said he was concerned that:
•Incomplete and misleading information had been supplied to the Central Bank by Custom House.
•Proper books were not kept by the firm.
•Funds of clients were not used in a way intended by customers.
•There were possible breaches of capital adequacy rules.
In July the chief executive of Custom House, Harry Cassidy, resigned as chief executive and as a board member.
He was the largest shareholder along with a John Mulholland, said Mr Thompson's report.
Any report furnished by the High Court inspectors would only be published after any individuals named are given a chance to respond, Judge Gerard Hogan made clear in court.
David Barniville, for the inspectors, told the court that he was not yet in a position to say if all of the report could be published or if the inspectors would withhold some material.
The two inspectors were appointed following an application to the High Court by the Central Bank under EC regulations.