Fraud probe after car leasing firm goes bust owing £26m to savers
A car leasing firm is being investigated by fraud officers after it went bust owing £26m to hundreds of savers lured in with the offer of returns as high as 11pc.
Raedex Consortium - whose boss Reginald Larry-Cole has written a book on ethical capitalism - is facing inquiries from the Serious Fraud Office (SFO) following its collapse last month.
The firm's main brand Buy 2 Let Cars was advertised on TV and Twitter as an alternative for savers tired of “stagnating savings and low interest”.
But it went into administration in March after being barred from entering into new leases by the Financial Conduct Authority.
SFO officers raided two homes on Thursday in connection with the case, while one person has been arrested and released following interview pending further investigation. A second person has been interviewed by the SFO. Neither has been named.
Raedex secured cash from retail investors and used the money to buy cars. It then leased these vehicles out, often to drivers with a poor credit history, and used income from leases and car sales to pay the investors back.
Raedex claimed to have about 1,200 leasing customers, according to the FCA, although Companies House records analysed by the watchdog show it had charges over only 69 vehicles.
Raedex's joint directors are Scott Andrew Martin and Mr Larry-Cole. According to Companies House, Mr Larry-Cole owns 75pc or more of Raedex Consortium.
Mr Larry-Cole, 50, told The Sun in 2019 that his previous business Creditlab went bust during the financial crisis.
He said the failure left him on benefits and feeling suicidal, but he turned his life around after meeting Mr Martin in Battersea in 2010 and getting into the car leasing business.
He has written a book called Compassionate Capitalism, featuring the tagline on its cover "How I Turned 150 Nos int 1 YES and built a multi-million empire", according to a Facebook post.
The SFO said it was "investigating suspected fraud in relation to the activities of the Raedex Consortium, including the companies Buy2Let Cars, PayGo Cars, Raedex trading as Wheels4Sure and Rent2Own Cars".
RSM, administrators to Raedex Consortium, declined to comment. Mr Larry-Cole could not be reached for comment.
Raedex told the FCA it owes investors £26m, received over three years, and would need an extra £6m to pay its liabilities in 2021, according to documents released in February.
