Liquidator to collapsed MJS Colarb bond fund launched by LCF marketer claims assets overstated by £20 million

Liquidators of a collapsed bond investment firm once championed by Liberal Democrat peer Lord Razzall have claimed its boss overstated its assets by more than £20 million.

MJS, which later changed its name to Colarb, was set up by directors including John Russell Murphy, a key marketer of the collapsed £236 million London Capital & Finance bond scheme.

It launched in 2015 and was run by a businessman called Shaun Prince, but got into difficulties in 2017 and recently collapsed with an estimated £35 million of creditors’ money at risk.

Liquidator Asher Miller of David Rubin & Partners has written a report to creditors saying Colarb’s balance sheet cites assets of £39.7 million, of which Prince had said £27.7 million could be realised. However, the report says Prince’s figure appeared to be “overstated by £20 million or more” based on earlier documents signed by Prince and MJS’s two biggest portfolio companies.

The biggest alleged overstatement was in the case of money invested with a Dubai firm called Angel World, where the £26 million valuation on the Colarb balance sheet was written as being worth only £5.3 million.

MJS raised money from the public, promising high rates of interest from what it called investment arbitrage positions. Marketing literature was fronted by Lord Razzall, who says he quit in 2017. Russell-Murphy left soon after MJS launched.

It got into difficulties in 2017 citing overzealous anti-money-laundering checks by its banks, then stopped making promised coupon payments and refused some redemption requests.

Prince said the discrepancy in the asset valuations cited by the liquidator was due to Colarb having been liquidated rather than put into administration with its investments being allowed to run their course.

“The way in which the company has been forced into liquidation is disgusting,” he said. “MJS simply had cashflow issues... and should still be operating today.” He vowed to fight to clear his name and get maximum funds back for investors.

Miller is adminstering another collapsed bond firm with links to LCF called Asset Life.