Four Scots under police investigation after collapse of global loans company.
FOUR Scots are under investigation on suspicion of fraud after the disastrous collapse of a £400 million hedge fund.
The individuals, including Gregory King, a Glasgow-born financier, have been reported to the procurator fiscal following the failure of Heather Capital.
The investigation centres on loans made by a Scottish firm related to Heather Capital against a series of development sites across central Scotland.
The fund, essentially an asset-backed lending vehicle, was one of many to fold during the financial crash
Heather Capital was liquidated in 2010, with friends of Mr King, who had run the business from Gibraltar, blaming the collapse on market conditions following the financial crash of 2008.
Mr King, 46, is a member of a wellknown Glasgow business family and lives on Spain's Costa del Sol. Crown Office sources said he and three associates, in their 40s, 50s and 60s, have been the subject of reports to the fiscal.
A Police Scotland spokeswoman said: "As a result of an investigation into alleged embezzlement concerning Mathon Finance Limited a 46-year-old is subject of a report to the procurator fiscal."
Prosecutors are considering the report, which was made in May 2013 in respect of incidents in 2008 and 2009.
Mr King went into finance after running a business in Glasgow providing cars to the taxi trade. In 2002 his business partner, Alexander Blue, was beaten and stabbed to death on his doorstep in Dowanhill, Glasgow, in one of Scotland's highest-profile unsolved murders.
Mr King, who moved into fund management, explained Heather Capital's business model in a 2007 interview on YouTube. Speaking before the worst of the financial crash, he described the business as a "$500m hedge fund". A year later it was said to be worth $600m.
Mr King in his video, made as the property market began to weaken, boasted that Heather's success was "slightly counter-cyclical". He added: "My family has been doing this business for more than 90 years and I have a substantial amount of my capital in this fund. We view ourselves as a very low risk lender in these markets."
Mr King explained that Heather Capital had a feeder fund on the Isle of Man and other vehicles in the UK and Ireland. These are believed to include Mathon Finance Limited, which was registered in Scotland in 2003 but never filed full accounts and was dissolved in 2011.
The fraud investigation is believed to be looking into loans made by Mathon Finance. It was a subsidiary of Mathon Limited of London, latterly known as Harvest Finance Ltd and now in liquidation. It was owned by a firm in Gibraltar.
The director of Mathon Finance before its dissolution was Andrew Sobolewski, a lawyer from Bridge of Weir in Renfrewshire. Mr Sobolewski was also a director of Harvest Finance.
Mr King served as a director of Mathon Limited, before it became Harvest Finance, for just a few months in 2007, according to documents at Companies House. Mr King was also a director of Mathon Finance, from 2003 to 2005.
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