FCA drops probe into scandal-hit Home REIT
The City watchdog has dropped its investigation into Home REIT, two years after opening a probe into the stricken property firm. The Financial Conduct Authority (FCA) has said it intends to take no further action against the firm, according to a statement released by Home REIT on Wednesday. An investigation into the former London-listed social [...]
The Financial Conduct Authority (FCA) has dropped its investigation into Home REIT, a scandal-hit property firm, after two years of probing the company. Home REIT's chairman, Michael O'Donnell, announced the closure of the investigation and the regulator's decision not to take further action against the firm. The FCA's probe into Home REIT, which lasted from September 2020 to January 2023, came after the firm was embroiled in several major scandals, including the bankruptcy of some of its biggest tenants and repeated offloading of its portfolio to raise cash and pay off debts.
Home REIT, a London-listed social housing company, had raised over £850 million from investors, promising to use their capital to provide accommodation for vulnerable and homeless people while generating rental income. However, the firm was found to be marketing some properties to students and holidaymakers, and shareholders have since filed claims alleging that the company misled them about the security of its rental income, tenant experience, and valuation of its property portfolio.
Despite Home REIT's statement about the FCA's closure of the investigation, over 800 shareholders have initiated legal action against the company for alleged losses caused by misleading statements and omissions. The Serious Fraud Office (SFO) is also conducting a separate investigation into the firm, having identified potential fraud and bribery totaling up to £300 million.
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