An estimated €751,455 has yet to be paid to investors who lost money following the collapse of Custom House Capital (CHC) in 2011, with the State’s investor compensation fund having certified claims valued at a total of €3.6 million in the past year.
In its 2022 annual report, the Investor Compensation Company (ICCL) said 173 claims were pending at the end of July last, with CHC’s liquidator, KPMG partner Kieran Wallace, having certified a total of 2,164 claims since the firm’s demise.
The ICCL is a statutory body that offers compensation to eligible clients of failed investment firms.
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CHC was liquidated in 2011 after a High Court-appointed investigation by two Central Bank inspectors found the “systemic and deliberate misuse” of clients’ money, totalling €61 million, the majority of which represented transfers to syndicated property investments.
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In the year to the end of July 2021, just 574 claims had been certified, resulting in compensation of more than €7.4 million but meaning that the vast majority of the more than 2,000 claims the fund had received from affected investors had yet to be certified.
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However, the fund and Mr Wallace made “substantial progress” in its most recent financial year, according to the report. Some 1,590 claims were processed in the 12 months to the end of July 2022 with compensation of almost €3.6 million due to the investors in questions.
This means that a total of €10.9 million has so far been paid to victims of CHC’s collapse with just 173 claims still pending. ICCL’s board said it expects these claims to cost just over €751,445, which it has classified as falling due over the next year.
The ICCL said the claims were outstanding, largely because of “issues regarding the contacting of claimants and the receipt of required declarations”.
Progress had stalled last year due to a High Court case taken by Mr Wallace to clarify a technical issue. Judgment was granted in October 2021, paving the way for the certification, which had been postponed, to continue.
In its annual report, the ICCL said it welcomes the outcome of the High Court case, which will contribute to a “speedier claims settlement process in future compensation schemes”.
Based on Mr Wallace’s estimates, the fund had initially set aside €19.7 million for CHC-related compensation. The final figure is now likely to fall substantially below that estimate.
“I am glad to report that the large bulk of claims from clients of CHC have been processed and paid,” ICCL chairwoman Jane Marshall said in a statement. “We are working to finalise the remaining claims as quickly as possible.”
Separately, the ICCL reported a surplus of €5.6 million for the year to the end of July, down from €20.6 million in 2021. This was largely due to receipts of risk equalisation levies in 2021, which the company said did not recur in 2022.
ICCL had accumulated reserves of €88.1 million at the end of July, the bulk of which (62.1 million) comprised the company’s primary fund, which is dedicated to larger investment firms such as banks and stockbrokers. The remaining €26 million is earmarked for smaller investment firms including insurance brokers and retail intermediaries.
“The steady growth in the ICCL’s financial reserves continued during the past year, thanks to the sustained support for the Compensation Scheme from contributing investment firms,” said Ms Marshall.
