The wealth management company HBFS Financial Services Ltd is being wound up — with more than £13 million still owed to investors.
A letter sent to “all known creditors” by licensed insolvency practitioners B&C Associates confirmed that a resolution to wind up the company has been passed by shareholders and states that the firm’s directors have “decided to take steps to place it into creditors’ voluntary liquidation”.
The summary of HBFS’s current assets, signed by managing director Freddy David, suggests there is only £459,710 available to pay back creditors.
The Hertfordshire-based firm had many Jewish clients, and targeted investors in the community. The JC has seen a copy of the letter, sent by B&C on February 8, which included a list of names of those now owed money by the firm.
The money owed to the 61 creditors listed totals £13,301,696. But there are believed to be other investors whose names do not appear on the letter.
Among those listed are prominent members of the Jewish community, and elderly investors, many who are thought to live in residential or care homes.
The letter also confirms that following the arrest of Mr David last November, the police “contacted affected clients and encouraged them to claim their money back”. But it adds: “The company did not have sufficient funds to repay all the clients claiming at the same time.”
The letter said HBFS had made nine members of the firm’s staff redundant on January 31 and that while some salaries have been paid up to date, “employees will be owed redundancy entitlements”.
Meanwhile in a post on the website of The Gazette, the official public record, notice was given of a meeting called by HBFS creditors on March 5 at the Village Hotel in Elstree.
The meeting will discuss the appointment of B&C Associates as the nominated liquidator. Creditors are entitled to nominate a different liquidator if more than 10 per cent of them raise objections to the directors’ choice of firm.
City of London Police arrested Mr David, 49, who is Jewish, on suspicion of fraud and money laundering last November. Rabbi Benji Silverstone, head of investment company HBFS Wealth Management’s Manchester office, was also arrested in December.
Both men remain under police investigation.