Northern Provident Investments goes into liquidation | Money Marketing

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The Financial Conduct Authority has announced that Northern Provident Investments (NPI) entered creditors’ voluntary liquidation on 20 August 2021.

Jason Baker and Geoff Rowley of FRP Advisory Trading (FRP) have been appointed as joint liquidators.

It follows NPI’s proposal to enter creditors’ voluntary liquidation on 6 August.

The firm had also suggested to appoint FRP as its liquidators.

The FCA has renewed its warning that there is a high risk of scammers trying to take advantage of customers.

In its consumer warning on Northern Provident Investments, the regulator said: “We are notifying consumers of NPI’s liquidation and warning them of the danger of scammers contacting them.

“As part of this we are setting out the steps customers should take if contacted by people claiming to be from NPI or FRP.”

NPI operated a platform where retail customers could buy debentures and shares, which may be held in an innovative finance individual savings account or stocks and shares individual savings account.

Some of these investments also included minibonds.

NPI previously approved financial promotions for issuers of minibonds.

That includes Blackmore Bond, which fell into administration in April 2020.

Blackmore Bond collapsed owing £46m to investors after several months during which it failed to pay interest due to bondholders.

The FCA imposed requirements on NPI for it to cease approving any further financial promotions in February 2020, after the firm applied to the FCA.

Northern Provident Investments placed a statement on its website that it would no longer be offering this service. The firm’s website now has the following message: “Northern Provident Investments Limited has ceased to trade and has taken steps to be placed into a creditors’ voluntary liquidation and the relevant notices have been sent to creditors”.

The FCA published in a previous statement: “All customers should remain alert to the possibility of fraud.

“Given the large number of minibonds that NPI distributed via its platform, we believe there is a high risk of scammers trying to take advantage of NPI’s liquidation to try to defraud customers.

“Fraudsters sometimes claim to be from legitimate firms authorised by us, or (in the case of liquidation) their appointed liquidator.

“This is what we call a ‘clone firm’. We have seen previous examples of fraudsters posing as authorised firms and asking customers for money in return for the money they’d invested through them.

“If you give money to a clone or unauthorised firm, you will not have access to the Financial Ombudsman Service or Financial Services Compensation Scheme (FSCS) if things go wrong.”

An update on the FSCS website about NPI reads: “From 27 July 2015, NPI was authorised by the Financial Conduct Authority and operated a debt-based crowdfunding platform where customers could buy illiquid debt securities and shares. NPI typically acted as an Isa manager for the investments on offer, many of which were minibonds.

“Investments in minibonds commonly offer customers high returns, but are both high risk and highly illiquid. Customers may find it difficult to sell their investments if they need to access the money they invested.

“NPI did not hold customers’ investments themselves. Despite the failure of NPI, customers will, therefore, continue to hold their investments, either directly or within an Isa wrapper.

“FSCS is aware that certain investments have failed. We’re also aware that some customers paid money to NPI to invest on their behalf and that money has not yet been invested.

“FSCS is in the early stages of investigating whether there are any claims against NPI that meet the qualifying conditions for compensation.”

Meanwhile, London Capital & Finance bondholders withdrew their judicial review appeal against the FSCS yesterday.

The lifeboat fund said the legal challenge against it has has been brought to a close.

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