Creditors of John Dance's WealthTek expected to receive 21p for every pound following FCA investigation

Clients of WealthTek LLP, the company owned by John Dance that was put into special administration in April, are forecast to receive 21p for every pound they had invested into the firm, according to administrators.

WealthTek, which also traded as Vertem Asset Management and Malloch Melville, was closed by the Financial Conduct Authority (FCA) on April 4 due to the discovery of “serious regulatory and operational issues” at the firm.

Dance was arrested by police and questioned by the FCA in April before being released, although the City regulator last month said he was being investigated for the criminal offences of fraud and money laundering.

It was also revealed last month that WealthTek had a shortfall of funds totalling £81.4 million, with the administrator adding it had received “very little engagement from [Dance], limited to letters received from Mr Dance’s lawyers containing no substantive information”.

A creditors’ meeting was held at a hotel in Leeds last week, with an update on the administration published this week alongside answers to questions raised by creditors.

In response to a question about "vague reasons" for the special administration and who is seeking to protect or recover "misappropriated" funds, the administrators said: “The [administrators] have access to WealthTek’s books and records and are conducting an investigation with a view to understanding why WealthTek is in this position. These investigations are of a sensitive nature [and] further details will be shared with the members of the clients’ and creditors’ committee in due course.

Bravemansgame: Gold Cup second now racing in Bryan Drew's nameCredit: Mark Cranham

“We cannot comment on any action taken, or to be taken, by the FCA. However, during our investigations, we will liaise with the FCA in order to obtain the best outcome for clients and creditors.”

The administrators added that the decision to place a value cap of £40m on the freezing order for Dance’s assets would have been reached by a judge following discussions between the FCA and Dance’s legal team. The freezing order prevents Dance from disposing of any assets that may be claimed as part of civil or criminal action against the owner.

Dance has made no public comment since WealthTek LLP was shut down in April. Prior to the FCA action against his firms, he had been one of racing’s best-known owners through the likes of Laurens and Gold Cup runner-up Bravemansgame as well as spending big at the sales and sponsoring races such as the Group 1 Vertem Futurity Stakes at Doncaster and the Vertem Eider Handicap Chase at Newcastle.

Bravemansgame, who Dance raced in partnership, has since been sold to Bryan Drew. Horses who had previously run in the name of John and Jess Dance have been permitted to do so under the banner of Coverdale Stud.

The gold and black Coverdale Stud colours have been carried to success twice this month – both on horses trained by Dance's private trainer James Horton – while they were also present at Royal Ascot on Thursday when Rhythm Master finished last in the Buckingham Palace Stakes.

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