The Serious Fraud Office has announced that it has today conducted a major operation involving raids and arrests, as it announces a new £300m bribery and fraud investigation into the past management of Home REIT.
Searches and arrests were made at homes in Altrincham, Maidenhead and London, a commercial site in Manchester, and a home in Venice, Italy.
Home REIT said it was aware of the reports. “Naturally the company will provide any assistance it is able to the SFO in pursuing its investigations.”
The SFO’s intervention comes three years after the fund, which raised a total of £850m from investors, was suspended from the London Stock Exchange after a shorting attack by Viceroy Research. Its report revealed the real estate investment trust’s largest tenants, or homeless charities, were not paying rent and that properties had been bought at artificially inflated prices to flatter its net asset value.
Emma Luxton, director of operations at the Serious Fraud Office (SFO), said: “This company had a meteoric rise, spending millions on properties that were supposed to house the most vulnerable in society and provide returns for investors. Its chaotic downfall has left many with unanswered questions. Today we conducted a major operation to advance our inquiries into suspected bribery and fraud.”
Solicitor general Ellie Reeves MP said: “The allegations in this case are deeply serious. Vulnerable people, including rough sleepers and veterans, were promised homes, while investors who funded millions of pounds were promised returns. Both groups deserve answers. Fraud is a devastating crime harming people and damaging business confidence. I fully support the Serious Fraud Office’s fraud and bribery investigation, working with enforcement partners – at home and abroad.”
Andy Parratt, deputy head of the fraud and bribery division at the SFO, told the BBC over 150 staff had been deployed in the searches and arrests. He said “it’s still early days in the investigation, but we are trying to establish exactly what’s happened in terms of the management of Home REIT and the reason that it collapsed.”
Home was launched by Alvarium Fund Managers in 2020. They were replaced by AEW Investment Management after a new board ordered the sale and wind-down of the portfolio in response to the valuation scandal.
The company is already the subject of an investigation by the Financial Conduct Authority, while BDO, its first auditor, is being investigated over its 2021 results. Law firm Harcus Parker has begun legal proceedings against Home on behalf of shareholders and the company has in turn made a legal claim against Alvarium and AlTi Re, its former appointed representative.
Our view
James Carthew, QuotedData’s head of investment company research, said: “As a shareholder and investor at IPO, I was upset about the value destruction within HOME but the betrayal of the vulnerable people who were supposed to benefit from its creation is the worst aspect of this. This has been a long time coming, I very much hope that those responsible will be punished.“
Who is actually doing anything to address the impact of the horrendous and criminal actions of suspected parties , on these vulnerable tenants?!
Whatever their vulnerabilities, these are people who have been failed by the very services that purportedly were set up to help and support them.
In the case of The Big Help Project, those service failures literally cost lives. At least 5 of these vulnerable tenants committed suicide within the first 18 months of The Big Help’s housing project starting.
WE demand accountability. Their lives mattered…
I am hoping that people will end up in prison for this. It is by far the worst case of fraud in the sector that I can remember.