The former business partner of the disgraced entrepreneur Gavin Woodhouse is being pursued by the Financial Conduct Authority in the high court over alleged links to care home investments in which investors appear to “have lost at least £30m”.
Robin Forster, who ran Qualia Care Developments (QCD) and Qualia Care Properties (QCP) before the companies entered administration this year, is accused of running “unauthorised” collective investment schemes, which the regulator says resembled “Ponzi schemes”.
The FCA said: “A number of misleading statements and/or impressions were given to [Qualia] investors about the financial sustainability of the schemes. These included an unrealistic level of return of between 8% and 10% a year.
“Payments of this kind were only ever likely to be possible by taking money from later investors to pay the earlier investors – unsustainable characteristics which are present in Ponzi schemes.”
Last year an undercover investigation by the Guardian and ITV News posed similar questions about the interests of Forster’s former business partner Woodhouse, who raised more than £80m from private investors to build care homes and buy hotels, but whose firms were found to have a multimillion-pound “black hole”.
In court hearings about a number of Woodhouse’s businesses being forced into administration last year, the judge, Sally Barber, described his empire as “a thoroughly dishonest business model” and the Serious Fraud Office is understood to be examining the case.
Woodhouse and Forster had originally been in business together, but they say they fell out in early 2016 and then separated their interests.
Even so, about £16m from Woodhouse’s and Forster’s companies appeared to have been sent to a company called MBI Consulting (UK), which was 60% owned by Woodhouse and 30% by Forster when it went into administration in August 2018.
The administrator’s report into MBI Consulting showed the firm’s bank account contained only £988 when it collapsed and it remains unclear what happened to the cash.
On Qualia, the FCA added: “Shortly before placing QCD and QCP into administration, Mr Forster moved £1.8m … into a newly established bank account … leaving QCD and QCP without any funds.”
The regulator said it did not have a date for a hearing but was seeking a declaration that the Qualia conduct amounted to “unauthorised activity”, plus “a restitution order” to return funds to affected people.
Forster denies the FCA’s allegations and says he is working with the regulator. His lawyers said: “Mr Forster’s primary concern is that there is no interruption to the care provision, particularly at this very difficult time.”