The stockbroking firm where Rangers owner Craig Whyte was company secretary is being wound up with a cash shortfall of £3.4 million.
Pritchard Stockbrokers was ordered to cease operations and placed in a special category of administration by the Financial Services Authority (FSA) on February 10, four days before Rangers was placed in administration.
The financial regulator said the stockbroker had failed to protect client funds, and may have used them for its own expenses.
Three days after Whyte put Rangers into administration in February, it emerged the businessman had resigned from the Bournemouth-based firm.
Administrators Mazars said yesterday it had been told by Pritchard directors that Mr Whyte's British Virgin Isles-registered company Liberty Capital had offered the company a £2m credit facility.
But Mazars said it had been unable to find any documents to back this up, adding: "A request was made by the FSA for the company to call the facility to meet the company's liquidity gap. However, no funds were forthcoming."
Mazars said there were client claims against Pritchard of £27.1m, and that could rise, but only £23.7m was available.
The Financial Services Compensation Scheme has said it treats stockbroking as an investment activity and would pay a maximum of £50,000 to clients if the firm were declared in default.
Mazars said about 60 of the firm's 11,100 clients had cash of more than £50,000 with the firm.
The regulator froze all cash assets at Pritchard on March 9. That day £350m of shares and other investments were transferred to another custodian by Merchant House Group (MHG). MHG shares were suspended on April 20 due to concerns over its financial position.
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