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Peer2Peer Finance News | August 24, 2019

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Questions remain as Collateral moves toward liquidation

Questions remain as Collateral moves toward liquidation
Marc Shoffman

COLLATERAL’S administrator is still investigating discrepancies in the valuation of assets and bank account balances as the peer-to-peer lender prepares to be moved into liquidation.

A final report from BDO, which took over the administration of the collapsed platform in April 2018, highlighted several outstanding issues.

Around £1.67m of P2P pawnbroking loans were made by Collateral and secured over assets with a book value in excess of £2.4m, but BDO has identified discrepancies in the valuations given.

Read more: What do we know a year on from Collateral closure

“We have asked the directors for an explanation in respect of these variances, before we take any steps to dispose of the assets,” BDO said.

Meanwhile, Collateral’s property finance arm lent out around £14.8m, which was secured by assets with a book value of around £22m.

However, borrowers in some of the largest loans have been unable and unwilling to pay, with BDO taking recovery action against five loans worth almost £8m in total.

BDO also said there was a discrepancy in the amount held in Collateral’s client account but did not have enough accounting information to verify this.

“Our investigations in relation to this matter continue, and are linked to our ongoing work in relation to the extraction of the electronic data,” BDO added.

Collateral will now be moved into liquidation, BDO said, but it will continue its investigations and its work in extracting electronic data to verify individual investor exposure to the loanbook.