Tory urged to quit second job linked to savings scandal: MP Johnny Mercer under fire over ties to bust LCF

25 April 2019 - 08:21 - Update: 25 April 2019 - 08:29

Furious investors have hit out at a high-flying Tory MP over his links to a £237million savings scandal.

Johnny Mercer earns £85,000 a year for 20 hours a month at The Crucial Group, which trains army veterans in cyber security.

The Mail revealed this month that the firm is linked to London Capital & Finance, which went bust in January owing £237million to 11,500 savers. The collapse of LCF is being investigated by the Serious Fraud Office (SFO).

Backlash: Tory MP Johnny Mercer earns £85,000 a year for 20 hours a month at The Crucial Group, which trains army veterans in cyber security

At a meeting of LCF creditors in London yesterday, savers called on Mercer to step down from his job at Crucial over its links with the scandal.

Amanda Cunningham, who had invested £22,000 in LCF to save for her autistic son, said: 'Politicians are there for the people, and Johnny Mercer is not thinking about the people. The best thing for him to do would be resign, or give that money back.'

Crucial was founded by Paul Careless, a marketing guru who separately ran campaigns on behalf of LCF, encouraging investors to hand over their savings in exchange for stellar returns.

Careless's companies earned fees of £54million for this service and were paid using investors' funds.

Partners: Johnny Mercer, left, with Paul Careless, right

Partners: Johnny Mercer, left, with Paul Careless, right

Careless sold Crucial after the Mail exposed their links.

'Crucial no longer has any ties to the companies that were linked to London Capital & Finance,' it said last night. Mercer, 37, says the row has been cooked up by political opponents to undermine him. 

He said: 'Clearly there is some co-ordinated effort to go after me, the reasons for which are unclear.'

He said he would not give up his lucrative job, adding: 'Crucial is a good organisation, doing good things, run by good people, with no financial link to LCF. I have no intention of resigning or cutting them adrift in this storm.'

Almost 700 victims of the scandal attended a meeting in London yesterday to be updated by the administrators, Smith & Williamson, and representatives from law firm Mishcon de Reya.

Smith & Williamson told bondholders they could expect to receive 20 per cent to 25 per cent of their lost money back, up from advice of 20 per cent previously.

Exposed: How the Mail led the way

Exposed: How the Mail led the way

Administrators hope they can show that salesmen advised LCF investors to buy the bonds over the phone. 

If they can show the savers received financial advice, they may be entitled to up to £50,000 under the Financial Services Compensation Scheme. Four arrests have been made since the SFO launched its investigation.

Careless is not under investigation and has not been arrested.

Smith & Williamson has said that LCF used investors' cash in a string of 'highly suspicious' transactions, with money spent on a riding stables, a helicopter and holiday developments.

There is no suggestion Mercer knew what was going on or is guilty of any wrongdoing. He met several LCF investors last night and told them he would support their efforts for compensation.

Afterwards, one of those who spoke to him wrote on Twitter that Mercer 'showed interest in our cause, so please cut him some slack', adding: 'He said he will do what he can to help us.'

 

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