Lendy co-founder Liam Brooke has been accused of using misappropriated funds through an offshore company to purchase the collapsed peer-to-peer lender’s headquarters.
High court documents approving a freezing order against Lendy founders Brooke and Tim Gordon have also disputed the rightful ownership of the platform’s former base at Branksmere House in Portsmouth as well as other properties.
The document suggests around £770,000 was channelled from the misappropriated funds to Brooke via a loan to Argo Private Finance Limited, one of the companies involved in an offshore structure to purchase Branksmere House.
There are also questions over the source of funds for three other properties.
The judgement shows Lendy’s administrator RSM claims the two directors misappropriated funds in excess of £6.5m using fake invoices “by making payments for no proper purpose, purportedly justified by false invoices and at least two service level agreements created after the event.”
Mr Justice Zacaroli said there is an “arguable case” that these payments were made to offshore companies with whom the directors were connected.
“The nature of the dishonest conduct alleged is such as to give rise to a risk of dissipation,” the judgement said.
“First of all, the alleged dishonest conduct involves deception, via sham invoices and payments to offshore companies.
“Secondly, this is compounded, if the allegations are made out, by the defendants lying about the lack of connection between them and the offshore companies.
“Thirdly, the use of offshore companies itself, particularly where that relationship is one which the directors have sought to conceal, can itself be an indicator of a risk of dissipation, and is so on the facts of this case.”