Police investigate collapsed bond firm MJS, launched with LibDem peer's backing

Police are investigating events surrounding MJS, the bonds company launched with Liberal Democrat peer Lord Razzall as its frontman which collapsed leaving pensioners owed some £36 million, it emerged today.

MJS was set up in 2015 by a team including Razzall and John Russell-Murphy, a controversial investment salesman who went on to be known for being a key marketer of bonds in London Capital & Finance. LCF was a much bigger scheme which collapsed after raising £126 million from hundreds of largely elderly investors.

It was sold as a high interest bond scheme that would invest in arbitrage trading strategies to make interest payments of as much as 14%.

However, MJS stopped paying promised dividends on its bonds and collapsed into liquidation last year. By that time it had changed its name to Colarb.

Razzall resigned as a director in March 2018 and Russell-Murphy in 2016.

The court appointed liquidator’s progress report just published reveals that the £35 million of assets MJS’s director Shaun Prince claimed were in the company when the liquidation was started was actually more like £7 million.

It says that the company’s affairs are being investigated by Thames Valley Police, and that the liquidator and his staff have been assisting with their investigations.

“We are unable to provide any further information in this regard as this may prejudice any potential criminal investigation,” the liquidator’s report says.

Prince and Razzall denied wrongdoing and said they have not been contacted by police. Russell-Murphy could not be reached for comment.

In a report casting serious doubt over the actions of Prince, the liquidator, David Rubin & Partners, says: “Unfortunately this clearly shows that there will be a very significant shortfall to creditors… it is highly probable that creditors will need to prepare themselves for a very significant loss on their investments.”

Even those assets that do exist will be hard to reach because one creditor – a Dubai investment firm called Angel World Family Office, which owes £5.3 million, has collapsed into insolvency, the liquidator warned.

Another, an investment firm called Fortitude Capital, owes £815,960. It has so far given back £140,960 and a Porsche, the liquidator said. The car will be sold on behalf of bondholders.

MJS had put £7 million and £6 million of bondholders’ funds with the two companies respectively and, prior to it going bust, had agreed deals with them to repay £5.3 million and £1.6 million.

The liquidator claims Prince, a former building site worker, had told him Angel World owed £15 million to £26 million to the company when, in fact, it had previously agreed a deal with it to settle at £5.3 million.