The ex-directors of failed unregulated collective investment scheme (UCIS) Arck received in excess of £4m from the business before it collapsed, according to a liquidator's report.
Arck was a UK based investment vehicle that was set up to develop and sell overseas based properties. The liquidator's report states that sums in excess of £63m passed through the business' main account.
The report, seen by IFAonline, by joint liquidators Butcher Woods and Rendle & Co who were appointed in spring 2012, claims that Kathryn Clark received payments from Arck in excess of £580,000 for which she has not been able to provide an adequate explanation.
Fellow former director Richard Clay received payments in excess of £3.6m, for which he similarly can not provide an adequate explanation.
Arck also made payments in excess of £620,000 to two solicitors in order to settle Clay's personal liabilities. The liquidator's report states Clay has failed to explain why these payments were made by Arck.
In respect of a Range Rover Vogue that Clay registered in his own name, Arck made a payment of £77,500.
An application was made to the court to deliver the vehicle up to liquidators.
Clay argued he was the legal owner of the vehicle on the grounds that the funds which paid for it were part of a director's loan taken in advance of Arck's earnings.
However a judge ruled that Clay had withdrawn substantial sums from Arck without having the means to repay them, despite the sums falling due. As such it was ordered that the vehicle should be returned to Arck for sale.
Clay was made bankrupt in May this year when he failed to pay costs relating to the return and sale of the Range Rover. The assets of both Clark and Clay are subject to freezing orders.
The liquidator's report also states that Arck has a claim for sums in excess of £24m related to Arch Estrela, a company in which Clay had an interest in the share capital.
It is understood that the plan for the money was to develop and purchase land and property in Cape Verde. The liquidators of Arch Estrela have been unable to locate where this money was subsequently transferred to and for what it was used.
The Serious Fraud Office has confirmed that it is investigating allegations of fraud involving investments made in Arck.
The Financial Services Compensation Scheme (FSCS) has said it is awaiting the results of a SFO investigation before deciding whether it will compensate over advice to invest in it.
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