Prestbury Investment Management wound up
A COMPANY controlled by Prestbury Holdings’ Lee Birkett, that specialised in packaging sub-prime mortgages, has been wound up.
Prestbury Investment Management (PIM) has ceased trading after HM Revenue & Customs submitted a winding up petition to the High Court.
Until 2005-06 the PIM business was part of Prestbury, a Cheshire-based financial services firm that provided mortgages, life assurance and critical illness policies.
It was then acquired by Prestbury’s chief executive Lee Birkett for £1, who was a director together with SJ Keenan, and PIM acted as a sub-prime mortgage packager for Prestbury’s advisers.
Packaging, a product of the credit boom, enabled banks to lend to groups of individuals whose details were packaged together by firms like PIM.
PIM paid Prestbury a commission for putting work its way but by October 2006 it owed £851,359, a figure that was still outstanding when AIM-listed Prestbury collapsed in December. Prestbury’s final full accounts showed it lost £1m in the 14 months to December 2007.
Prestbury, whose chairman was the former Conservative party chairman Francis Maude, had a tumultuous 2008 during which shareholders Arlington and Armadillo Investments accused Mr Birkett and his mother, finance director Lynne Birkett, of poor corporate governance and conflicts of interest.
The Birketts survived the revolt but the credit crunch crippled the business and in September it arranged the transfer of its 80 advisers to a rival, Personal Touch Financial Services (PTFS), on the advice of insolvency experts.
The move would have left Prestbury a cash shell and the directors had hoped to revive its fortunes by conducting a reverse takeover.
As part of the deal the advisers were contractually obliged to use PIM as their approved mortgage packaging provider for 12 months. But within months of the deal PIM was insolvent after being badly hit by withdrawal of credit.
PIM’s most recent filed accounts for the year to October 31, 2006 show the company doubled its turnover to £1.07m but pre-tax losses widened from £81,576 to £591,045.
During the year PIM paid another company owned by Mr Birkett, called Trumpo, £85,524 for website search engine facilities. Another of his companies, trading as Rage, was paid £29,734 for promotional work.
Mr Birkett also took a loan from the business worth £120,821 during the period. He could not be contacted for comment.
