London Capital & Finance administrators sue 13 executives for £178m in case set to trigger further claims

The legal action also includes salacious details of how some of the bondholders’ money went on horses and a helicopter.

Hume-Kendall is said by the Financial Times, which first reported the lawsuit, to have spent the proceeds on memberships of Annabels private members’ club.

Also named in the case is Paul Careless, the former police officer whose business Surge Group marketed LCF’s bonds through sophisticated social media advertising.

According to the FT, the legal papers say nearly 60% of all the investors’ money - £136 million – was channelled to its executives either directly or via loans to companies they controlled.

The directors deny wrongdoing in the case which is currently the subject of a Serious Fraud Office investigation.

According to the lawsuit, Hume-Kendall and his wife Helen received at least £24 million of investors’ cash, with the FT citing a source saying £250,000 was spent on Annabel’s memberships.

Andy Thomson, LCF chief executive, allegedly got £5.3 million of bondholders’ cash.

Spencer Golding, who was banned as a director during the events due to previous misdemeanours but was allegedly a major shareholder in LCF-linked companies, is alleged to have received £42.8 million.

Elten Barker, a director of LCF’s biggest borrower, London Oil & Gas, is alleged to have received at least £5 million. His lawyer denied the allegations, accusing the suit as being a way for the administrators to run up further fees.

Careless is alleged to have “personally received” at least £8.5 million and his company, Surge, received £60.8 million. A spokesman for him said Surge was paid the “market rate” and that Careless and Surge would “vigorously” defend the action.

Hume-Kendall’s lawyer said he “strongly denied” the claims, a lawyer for Thomson did not comment, the FT reported, and representatives for Golding did not respond to the paper’s requests for comment.

Five of the defendants are alleged to have failed to take sufficient steps to discover the alleged fraud.

Former Conservative energy secretary Hendry said the case was “without merit”, claiming he always fulfilled his duties.

Pradeep Oliver, partner at Cripps law firm, which is representing El Cuype and Waterside investors, said: “The core group of individuals did not just start with LCF but were engaged in selling unregulated investments to unsophisticated clients as long ago as 2010-2011.

"It is hoped that the action taken by the administrators will bring the individuals to account and provide clarity on the whereabouts of investor funds."