- Why is not Connaught or Tiuta or Blue Gate Capital paying for the advice of Duff & Phelps?
- Surely the persons responsible for the alleged mismanagement and/or alleged criminal misappropriation of the assets of the Fund should pick up the bills?
- How can the costs of Duff & Phelps be justified in terms of the objectives of the Fund?
- Surely the Fund should reclaim all monies paid to Duff & Phelps from all of those parties suspected of gross mismanagement and/or criminality?
- Will Duff & Phelps make available all of its papers to investors in the Fund and their advisers since investors have apparently paid for all of the work undertaken by Duff & Phelps?
- What are the terms of engagement of Duff & Phelps?
Potential Duff & Phelp Questions that need to be asked…
- Did the GP, FP and Operator not consider it a conflict of interest that Connaught’s Chairman was also compliance officer of Tiuta?
- Does (i) CAM and (ii) Bluegate accept that a proportion of the loans failed to meet the criteria described in the IM, and that some loans were inadequately secured, if they were secured at all? How did this occur, when did they become aware of it, and what steps did they take when it came to their attention?
- Why was the Specialist Partner changed from Tiuta plc to Tiuta International Limited without Investor Consent? Does Bluegate / CAM accept that replacing a FSA-registered entity with an unregistered one, which is not required to have Professional Indemnity insurance, represents a material adverse change and hence requires Investor Consent
- When did Mike Davies first become aware of: (i) Rawlinson and Hunter’s qualifications to and concerns about the Fund’s accounts and their refusal to sign off subsequent accounts; (ii) Tiuta plc’s failure to separate capital managed for the Fund from that managed for others or belonging to Tiuta plc and its subsidiaries; (iii) Loans to people or entities connected to Tiuta plc?; (iv) Any reduction in the capital that should have been available for interest payments and redemptions as a result of it being misappropriated by Tiuta plc and/or its directors; (v) Any shortcomings in the process of valuing properties or obtaining security over them
- When did he first bring these concerns to the attention of the directors of (i) Tiuta plc and (iii) CAM, and what actions did they take and when?
- What role does Nigel Walter perform at CAM? Do the directors accept that he performs the role of a shadow director?
Duff & Phelps Questions
- For the periods from January 2008 to the present day, please provide copies of the Professional Indemnity insurance of every company or partnership involved in (i) the management of the Fund’s capital, (ii) the auditing of the Fund’s accounts and those of Tiuta plc and its subsidiaries, (iii) the valuation of properties against which the Fund’s capital was advanced as loans, (iv) the imposition of security on those properties, (v) the provision of advice relating to the structure of the Fund and the documentation therein, including the agreements with the Specialist Partner, Tiuta plc and Bluegate Capital
- For the periods from January 2008 to the present day, please provide copies of the Directors‘ and Officers’ insurance for the directors of CAM, Tiuta plc, Bluegate Capital and any subsidiaries
- On points 5 and 6, if you refuse to provide the original documents, at least provide a schedule of who was insured, for what amount, together with the policy number, insurer and dates
- What does Duff and Phelps expect to charge in total for its involvement with the Fund, and what are its headline hourly rates?
- Assuming Duff and Phelps is appointed as administrator, would it be prepared to go to court to remove BDO from its position as administrator of Tiuta International Limited, given its previous roles in providing investigative or advisory accountancy services in relation to the company, and to seek recovery of any fees and documents that it has uplifted?
- Do they know why the old Guarantee was revoked for nil consideration? Do they believe that CAM had the authority to do this?
- Are they aware of the existence of a new guarantee which was meant to replace the old one
- Can they speculate why the new guarantee was not included in any transaction to buy Tiuta International’s loan book for £1
- Please provide a copy of the loan book, if necessary redacted to remove any personal information, containing as a minimum the following information:
Date Original Loan Granted
Original Loan Amount
Subsequent Loans Advanced
Date of original valuation
Name of original valuation firms
Original valuation amount
Dates and amounts of subsequent valuations
Brief Asset Description
Loan Expiry Date
Proposed method of repayment
Other security available
15. Please provide a copy of the facility agreement mentioned in the Agreement Relating to Investment Funds
16. Please provide the audited accounts for the Fund for the periods ending August 2010 and 2011 and management accounts from the Fund’s incorporation to the present day
17. When did (i) Connaught and (ii) Bluegate first become aware that the Fund might be insolvent on a balance sheet basis [NB: it must have been before 3 March, when investors were alerted to this concern], and when that it might be so on a cashflow basis. What steps did each take and when as a result of these concerns? Please provide a schedule of all payments made out of the fund since these concerns first came to light and indicate what steps have been or will be taken to recover those amounts
18. Why is Connaught Asset Management Limited not yet in administration? Once the six-month suspension of redemptions ends, in early September, should the Fund be unable to honour redemption requests the liability passes to CAM. The directors should be aware that any payments made by the company since the Fund’s insolvency concerns first arose are likely to come under scrutiny and may have to be reversed
19. Has Duff and Phelps advised Mike Davies or any other director of Connaught Asset Management not to respond to enquiries from investors or IFAs? If so, why?
20. Did Connaught Asset Manager (or any entity employing Connaught employees) receive any fees directly or indirectly from Tiuta PLC / Tiuta International that were not disclosed in the original IM
Tiuta PLC Accounts (Year Ending 30th September 2012)
21. In the recently published accounts for Tiuta plc, there was a loan from Tiuta International Limited to K Nicholas – brother of S Nicholas – for £5.8m. Can you confirm the security under-pinning this loan and the commercial terms supporting this loan.
22. In the same accounts, the Tiuta PLC Directors paid themselves £775,292 including a £300,000 pension contribution. Is there any likelihood of recovery of these monies on the basis that Tiuta knew their business model was failing?
23. In the same accounts, it states that in January 2011, BDO were brought in to review the group’s financial position as a result of George Patellis’s resignation. Can we have a copy of BDO’s report please.
24. Can you confirm who received the report from BDO. The accounts state that the report was shared with the regulatory authorities. Can you also confirm if this report was sent to Connaught or Bluegate, or summary findings of this report were sent to Connaught or Bluegate.
24. It has been alleged that Mr Patellis resigned as a result of the BDO report, and NOT beforehand. Can you confirm which version is correct.
25. It has been alleged that Mr Patellis went to the FSA to outline his reasons for his resignation with documentary evidence which we suspect confirmed irregularities at Tiuta PLC. Can you confirm whether this is correct?