A government probe into the failure of mini-bond provider London Capital & Finance (LC&F) has been postponed by three months, amid frustration from MPs.
Dame Elizabeth Gloster, the former appeals court judge who is leading the inquiry, has advised the Financial Conduct Authority (FCA) chairman Charles Randell that she will not be complete her investigation by 10 July as planned. A new deadline of 30 September has been suggested.
Dame Gloster said that the inquiry has been held up by long waits for documents from the City regulator, as well as the challenges presented by the Covid-19 pandemic, which has made it harder to interview people.
LC&F collapsed last year, leaving 11,600 investors at risk of losing a combined total of £240m.
In response to news of the delay, MPs expressed disappointment that a report had not yet been released, and vowed to grill the FCA on its role in the delays.
“The previous Treasury Committee pressed the need for an investigation into events at LC&F,” said Mel Stride MP, chair of the Treasury Committee.
“When the Treasury rightly used its powers to direct the FCA to commission a review last year, my predecessor urged the regulator and the Treasury to ensure that the investigation was conducted and report published as soon as possible.
“The delay in the investigation is particularly concerning. As Dame Elizabeth has said, the decision to delay may cause anguish to those who invested in LC&F.
“We will want to get to the bottom of what role the FCA had in the delay when we next take evidence from them.”
The pandemic has delayed a number of investigations into defunct lenders. Investors in property-backed platform Lendy were recently told that the administration process has been extended by three years due to the pandemic, while investors in FundingSecure and Collateral have been told to expect a longer wait for recoveries.