The remaining assets at Worldspreads are enough to repay only a third of the money owed to clients of the defunct spread betting operator, its administrators reported on Friday.
The company admitted insolvency in March after misusing client funds for up to five years, according to a witness statement filed by its chairman, Lindsay McNeile, who denies any prior knowledge of the alleged fraud.
The company owed £29.7m to clients at the time of its insolvency, but there remained only £5.2m in “segregated” client accounts, according to the report to creditors by administrators at KPMG. They revealed that £467,000 of this was held at a broker that was also in administration, casting doubt on how much would be recovered.
There was £10.9m in house accounts, of which £7.7m had been received, the report said.
It added that the funds remaining in designated client accounts were enough to repay only between 10 per cent and 15 per cent of the £29.7m owed to clients, after costs. They will also have a claim against the company’s other assets, which will yield a further 20p for every pound owed, the administrators estimated.
The Financial Services Compensation Scheme will reimburse client losses up to a maximum of £50,000 per person. All but 90 of the clients are owed less than this amount, the administrators said. However, at least two clients are owed more than £1m, according to people close to the situation.
Royal Bank of Scotland, which holds a fixed charge of £1.65m, would be repaid in full, the report added.
The administrators’ costs to date amounted to £903,000.