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Last Updated: Saturday, 22 December 2007, 14:59 GMT
No say on First Solution payout
By Bob Howard
BBC Radio 4's Money Box

Ghulam Rumi
Former director, Ghulam Robbani Rumi, will have a say in distribution
The official receiver will not have any influence over the distribution of a £300,000 payout to members of Britain's Bangladeshi community.

Two thousand people lost a total of £1.7m when the money transfer business, First Solution, stopped trading in June.

This week customers had their first meeting with the official receiver.

He told them the company's three former directors had agreed to voluntarily pay back £300,000, but they would chose who the money would be paid to.

Best possible outcome

The official receiver, Paul Titherington, told BBC Radio 4's Money Box, the deal - which is legally binding - was the best he could do in the circumstances:

"It is in the control of those people who voluntarily contributed to it.

"I have obtained voluntary contributions that otherwise would not have come to the creditors."

I've never seen an agreement reached, such as that which the official receiver has reached in this instance
Mark Hendrik, insolvency expert, Tenon Recovery

Mr Titherington added that this was the first time he had ever managed to persuade directors to agree to make a voluntary contribution, and the alternative was not to have anything at all at this stage.

But creditors continued to question him over why it was the very directors whose company had lost their cash in the first place, who would now choose who got some, or all, of their money back.

Ghulam Robbani Rumi is one of the former directors who will be deciding how the funds will be distributed:

"We are planning to pay initially the most affected customers.

"They will get something, definitely."

More to come?

At the end of the meeting, customers who lost money voted to appoint insolvency experts from Tenon Recovery, to find ways of getting more of their missing cash returned.

Mark Hendrik from Tenon Recovery said he would closely scrutinize the deal that the official receiver had made with the former directors:

"I have never seen an agreement reached, such as that which the official receiver has reached in this instance.

"We need to see the agreement before we can decide what action can be taken against it, or whether it should be allowed to stand."

First Solution agents who have bought parts of the firm have also agreed a voluntary contribution of £115,000, which they will distribute.

And the official receiver has recovered £30,000 from the company's assets.

It is still not clear when the first payments from First Solution's former directors will be paid, but the deadline is for it all to have been distributed by September 2009.

First Solution's former directors have also told the official receiver that they intend to pay a further £200,000 more back in the future, although that is not legally binding.

Meanwhile, Companies Investigation Branch enquiries into what happened to the missing £1.7m continue.

BBC Radio 4's Money Box was broadcast on Saturday, 22 December 2007 at 1204 GMT.

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SEE ALSO
External internet links
21 Dec 07 |  Moneybox
Anger at First Solution payments
17 Nov 07 |  Moneybox
First Solution clients still wait
10 Nov 07 |  Moneybox
Money transfer collapse
10 Sep 07 |  Moneybox
Agents bid to buy First Solution
08 Sep 07 |  Moneybox
Millions lost as firm goes bust
04 Jul 07 |  London


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