The Competition and Markets Authority (CMA) is concerned that the loss of competition brought about by the merger could result in UK investors losing out as a result of higher prices, fewer options and less innovation.

FNZ purchased GBST in November 2019. Both companies have a significant presence in the UK. They are 2 of the leading suppliers of solutions involving software and/or servicing to retail investment platforms in the UK.

After completing its initial Phase 1 investigation, the CMA found that FNZ and GBST are close competitors in what is a concentrated market with few other significant suppliers. Smaller or less well-established firms find it difficult to enter or scale up because of the risks and reluctance of customers to change suppliers.

As part of its investigation, the CMA undertook extensive market testing and looked at evidence from a number of third-party stakeholders including investment platforms, external consultants, competitors and industry bodies. It also examined the companies’ internal documents and assessed the extent of competition in recent tenders in this sector.

Joel Bamford, Senior Director of Mergers at the CMA, said:

Investment software is critical to the operation of retail investment platforms which are used by many investors in the UK.

FNZ is already the largest supplier and has purchased an established rival who is trusted by many platforms, with few remaining competitors left in the market. We are therefore concerned that this transaction could lead to customers losing out.

FNZ must now address the CMA’s concerns within 5 working days. If it is unable to do so, the deal will be referred for an in-depth (Phase 2) investigation.

For more information, visit the case page.

For media enquiries, contact the CMA press office on 020 3738 6460 or press@cma.gov.uk.

The trustees of a humanitarian aid charity that failed to account for cash taken to Syria are responsible for misconduct and mismanagement, the charity regulator has found.

In a report published today, the Charity Commission, the regulator of charities in England and Wales, finds several serious failures in the administration of the charity, including failures to properly vet, safeguard and oversee volunteers who represented the charity, and to account for the way in which funds were spent.

The regulator’s inquiry, which launched in 2014, aimed to establish, among other things, whether the charity had been misused for, or had supported unlawful or improper activity, including facilitating military, armed, political activity, and whether the charity’s funds had been misappropriated.

In December 2013, a volunteer who was associated with this and other charities, took part in an aid convoy to Syria. While in Syria, the volunteer was reported to have been abducted and later murdered by ISIL militants.

Concerns about the charity’s involvement in aid convoys to Syria

The Commission had been engaging with the charity since April 2013 over concerns about its participation in and organisation of an aid convoy to Syria. This activity was outside Al-Fatiha Global’s charitable purposes at the time. The regulator had also issued general advice about charities’ participation in aid convoys, which it states carry “inherent risks” and are “not an effective means of delivering humanitarian aid”.

A books and records check at the time uncovered significant weaknesses in the charity’s records, such that the trustees were unable to demonstrate where and how charitable funds had been applied.

The inquiry further finds that the charity’s trustees provided “little to no” oversight of individuals to whom they had delegated responsibility, including those that managed participation in convoys to Syria. The trustees did not, the Commission finds, act reasonably to ensure the charity’s assets, including its name, were used only to support or carry out its purposes.

Cash not properly accounted for

The trustees also failed to ensure appropriate authorisation and documentation around cash carried by individuals travelling on convoys. The Commission found that individuals travelled overseas carrying between £2000-£3000 each, but that there were “insufficient records” as to how cash or aid were applied in Syria.

Failures to account for charitable funds

The inquiry report criticises the charity’s trustees for failures to account properly for donations of goods, leading to the charity’s accounts for year ended December 2013 being qualified by the charity’s auditor. The charity had undergone a period of growth, after what the Commission notes was ‘highly effective’ fundraising by the charity’s trustees and supporters. The regulator finds that Al-Fatiha Global’s internal, financial and governance controls and processes did not keep pace with that change.

Interim Manager

During its investigation, the regulator appointed an interim manager (IM) to manage and administer the charity with the trustees, including by taking full control of the charity’s finances. While in post, the IM ensured adequate due diligence, monitoring and risk management procedures were put in place, that the trustee board was expanded, and that risks to charitable assets were adequately managed.

Amy Spiller, Head of Investigation Teams at the Charity Commission, said:

Charity represents the best of human characteristics – that’s why the behaviour of charities, and those involved in charities, matters. This is especially the case where charities work to help the most vulnerable or work in areas of inherent risk for staff and volunteers. Sadly, we found that the trustees of Al-Fatiha Global failed in their legal duties and responsibilities. They put their charity – its people, assets and good name – at serious risk. I am pleased that the charity is now on a much more secure footing, with a largely new trustee board, and appropriate policies and processes in place to ensure the charity delivers on its purpose safely. I hope other trustees learn from this case – notably about the very serious risks involved in taking part in aid convoys.

The Commission says the trustees co-operated with the inquiry and that it is satisfied the charity is now operating lawfully.

The full inquiry report is available on GOV.UK.

Ends

Husband and wife, Darren William Lloyd (53) and Emma Lloyd (49), have been banned for a total of 8-and-a-half years, while Darren’s brother, Adrian Jeffrey Lloyd (50), has been disqualified for 5 years.

All three directors are from Wolverhampton and after signing disqualification undertakings, the trio are banned from directly or indirectly becoming involved, without the permission of the court, in the promotion, formation or management of a company.

Elysian Care Limited was incorporated in January 1997 to purchase and operate a residential care home called Knoll House in Penn, Wolverhampton. The company acquired two further care homes but sold one of them in 2011, leaving Knoll House and The Homestead, based in Stourbridge, in Elysian Care’s portfolio.

Elysian Care, however, began to struggle financially and in addition to not providing adequate services to the residents, the company failed to pay key suppliers and staff. By September 2014, Darren, Adrian, Emma Lloyd abandoned the two care homes, which led to the local authorities having to step in and make emergency payments to ensure the residents were cared for.

As part of their efforts to rescue Elysian Care, the company’s bankers’ appointed administrators, who went onto to report to the Insolvency Service that Darren, Adrian and Emma were responsible for several instances of misconduct.

Darren Lloyd instructed a member of staff to provide new bank details to the local authority responsible for paying the fees of some of the residents of Knoll House. The local authority, however, was not informed that the bank account they were paying into was in the name of Darren Lloyd.

In total, more than £500,000 of resident’s fees provided by the local authority between September 2012 and October 2014 was paid into Darren Lloyd’s personal bank account. More than £290,000 of that amount has not been accounted for nor has it been explained whether it was spent on the running of Elysian Care or the care homes’ elderly residents.

Further enquiries confirmed that the trio abandoned the two care homes and left no funds to provide services for at least 30 residents. This meant staff had to buy essential supplies out of their own pockets, while the two local authorities had to make emergency payments to support the residents.

One local authority had to step in to reimburse staff’s wages, as well as pay for food and hygiene provisions, while the second council was forced to relocate the residents.

And all three directors were remis in maintaining sufficient books and records, while also failing to supply a statement of affairs to the Administrator.

The trio contested the proceedings for over three years but elected to accept disqualification undertakings before their trial was due.

Emma Lloyd was the first to have their ban come into effect on 14 February and her disqualification lasts for 3-and-a-half years. Darren Lloyd’s 5-year ban came into effect on 19 February 2020, while his brother’s ban was effective a day later.

David Brooks, Chief Investigator for the Insolvency Service, said:

Darren, Adrian and Emma Lloyd were unscrupulous care home bosses. Not only were they culpable for diverting more than £500,000 of funds intended for the care of their residents but they abandoned the people they were responsible for and left staff and local authorities to step in and pick up the pieces.

Directors are expected to operate in the best interest of the company and by removing Darren, Adrian and Emma from the corporate arena will ensure their victims will be protected from further harm.

Darren Lloyd is from Wolverhampton and his date of birth is January 1967

Emma is from Wolverhampton and her date of birth is February 1971

Adrian Jeffrey Lloyd is from Wolverhampton and his date of birth is August 1969

ELYSIAN CARE LIMITED (Company number: 03304393)

Disqualification undertakings are the administrative equivalent of a disqualification order but do not involve court proceedings. Persons subject to a disqualification order are bound by a range of restrictions.

Further information about the work of the Insolvency Service, and how to complain about financial misconduct.

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