First Solution Money Transfer: Insolvency

Business, Enterprise and Regulatory Reform written question – answered on 24th January 2008.

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Photo of Harry Cohen Harry Cohen Labour, Leyton and Wanstead

To ask the Secretary of State for Business, Enterprise and Regulatory Reform whether the insolvency service investigation into First Solution Money Transfer Limited has concluded.

Photo of Pat McFadden Pat McFadden Minister of State (Department for Business, Enterprise and Regulatory Reform) (Employment Relations and Postal Affairs), Member, Labour Party National Executive Committee

On 6 July 2007 companies investigation branch ('CIB') (which is part of the Insolvency Service), appointed investigators following the sudden closure and apparent collapse of First Solution Money Transfer Ltd. A number of clients reported having lost money that was sent through this company destined for dependant family overseas.

On 2 August 2007 CIB petitioned the court to wind up the company and appoint the official receiver as provisional liquidator to protect and preserve the assets. On 21 November 2007 a winding up order was made and the official receiver was appointed liquidator of the company. As a result of a meeting of creditors held on 19 December 2007 an external liquidator from Tenon Recovery was appointed and that firm will now deal with the realisation of assets and distributions to creditors. The official receiver has a further statutory role, to investigate the causes of the company's failure, and to report to the Secretary of State regarding the conduct of the directors in respect of the company's trading, under the terms of the Company Directors Disqualification Act 1986. Furthermore, the official receiver is under a duty to report any evidence of criminality to an appropriate prosecuting body.

Meanwhile the CIB appointed investigators are continuing their work and CIB are hopeful of receiving the investigators' final report in the near future and decisions can then be made on further action. It would be inappropriate to issue progress reports in the meantime. CIB's investigation under the Companies Act benefits from the use of compulsory powers, but the Act only permits disclosure of the investigators' report through a statutory gateway. In particular there is no provision which allows publication of the report.

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