The Serious Fraud Office is considering investigating the business affairs of Gavin Woodhouse following a referral from an influential MP.
John Mann, the Labour MP for Bassetlaw who has been a member of parliament???s Treasury select committee for more than a decade, alleged Woodhouse???s business model ???smells a bit like a Ponzi scheme??? as further details of the embattled entrepreneur???s finances have emerged.
The moves follow the publication last month of a Guardian/ITV News undercover investigation, which posed questions about the business interests of the entrepreneur, who has raised more than ??80m from private investors for care homes and leisure projects but whose firms have a multimillion-pound ???black hole???.
A high court judge ruled last week that the financier???s business model appeared to be ???thoroughly dishonest??? as temporary administrators were appointed to run four of Woodhouse???s businesses.
Mann, who has also contacted the Financial Conduct Authority, said: ???This smells a bit like a Ponzi scheme, and it???s so complex it???s hard to be certain, but something is not right here. And so there needs to be either regulation intervening or to check whether or not this is in fact legal. So I???ve written to the Serious Fraud Office and Andrew Bailey, the head of the Financial Conduct Authority, the regulator, asking them to intervene and investigate.???
Mann is the second senior politician to call on the SFO to investigate after Adam Price, the leader of Plaid Cymru and a Welsh assembly member, said this week he would write to the agency asking for an ???an immediate inquiry??? into Woodhouse???s interests.
An SFO spokeswoman said: ???We are aware of the allegations ??? All matters referred to the SFO are assessed against criteria to establish whether they may fall within its remit to investigate. The SFO does not comment on the progress of such assessments.???
The FCA did not comment.
On Sunday, Woodhouse lost control of his main firm, Northern Powerhouse Developments (NPD), after Philip Duffy and Sarah Bell of the insolvency firm Duff & Phelps were appointed interim managers of the business.
The decision followed a similar court ruling last week, which appointed the pair to identical roles at two Woodhouse care home businesses ??? MBI Clifton Moor and MBI Hawthorn Care ??? along with the entrepreneur???s planned ??200m adventure resort in south Wales, Afan Valley.
The Guardian and ITV News also understand that, as of December 2018:
??? NPD executives were expressing concern about the solvency of the group directly to Woodhouse.
??? Woodhouse???s personal company, Woodhouse Family Ltd, had taken loans of more than ??2m out of NPD.
??? Woodhouse???s wife, Charlotte, was being paid a salary by NPD of ??75,000 a year.
??? NPD already owed around ??2m in unpaid returns to investors and was behind in payments to suppliers and agents.
Investors have grown increasingly concerned about what has happened to monies they have given to Woodhouse companies. In court last week, Judge Sally Barber stated: ???Ordinary members of the public have collectively invested millions of pounds into three companies. They have been led to believe that their investment monies were ringfenced and used only for particular projects. This was untrue.???
Despite Woodhouse raising about ??16m five years ago to build four new care homes, none are operational and three have not been built. The businessman was also in the process of raising ??40m from private investors to start work on his Afan Valley adventure resort in south Wales, which he launched with the support of the celebrity adventurer Bear Grylls, who had signed a deal to offer survival courses at the site.
Duffy said: ???We are continuing our detailed investigations into NPD and these remain ongoing. At this stage we are not in a position to comment on the specific allegations put to us.???
Woodhouse said: ???I am unable to comment in detail on matters that are the subject of ongoing court proceedings. I hope to address the issues raised publicly when I am able to do so.???
He has previously denied any wrongdoing, said that investor monies are held in bank accounts and that he plans to build the care homes.