Castle Trust & Management Services – in Liquidation 

The Confetti that was Security for Loan Notes

Investigations have uncovered that Castle Trust and Management Services – in Liquidation (CTMS) – engaged in shady business practices. The Administration order made in May 2023 and subsequent Liquidation of the company later in 2023 have exposed some alarming business and administration practices of Steven Knight.  

Back in the UK, Steven Knight is wrangling with Preston Turnbull in the bankruptcy courts. After the 3^rd hearing, surely the inevitable is looming for Steven Knight.  An event that will surely go some way to satisfy those who lost funds. Through both pension schemes and loan note schemes.  Appointing a trustee will mean a thorough examination of Steven’s finances.

In this blog, we try to get a handle of the figures and sums involved in their Security Trustee services. We will also draw attention to extracts from the Court of Gibraltar Judgments.  

Positions of Authority

First let’s remind ourselves the position of authority, responsibility and trust held by Steven Knight.  In his Linkedin bio, Steven Knight states he “is a UK Qualified Chartered Accountant and is a Fellow of the Institute of Chartered Accountants in England and Wales, a member of the Society of Trust and Estate Practitioners and the Institute of Directors. He is widely regarded as one of Gibraltar’s leading specialists in international fiscal planning for both wealthy individuals and companies”.  

These are big statements, which no doubt gave many a client, reassurance that they were in safe hands.

Steven Knight

Steven goes on to state that he “….was appointed to start up and manage the Gibraltar Office of Price Waterhouse in 1989. In that role he acted as the PW Gibraltar Office consultant to the Gibraltar Government to improve and update the local tax law. This included the drafting and assisting with implementation of tax law to comply with EU Directives and to enhance the marketability of Gibraltar in international financial matters. He was regularly consulted by the Government, Attorney General’s Office and Financial and Development Secretary on the Gibraltar tax reforms”. 

“Steven established The Castle Trust Group in 1992, an International Trust and Company Management organisation which includes fully regulated and licensed companies. …..In 2010 Steven was elected Chairman of the Association of Pension Fund Administrators in Gibraltar. In this role has played a significant part in the development of Gibraltar as a fully recognised jurisdiction to which pensions may be transferred from the UK using the HMRC approved QROPS procedure”.  

Steven has clearly had some positions of authority and responsibility during his time with Castle Trust & Management Services. During this time, the Gibraltar Financial Services Commission regulated them. You could almost say he acted as an ambassador for the financial island that “the Rock” is well known for.

Comingling of Personal Interests

In court documents, the Liquidators state “commingling of his personal interest and shares with that of CTMS to which he owes, but has clearly breached, his fiduciary duties”, giving examples of “we discovered that SK had a blatant disregard towards the interest of CTMS and was only concerned with furthering his own profit. This is especially evident in his disregard for the legal system and processes”.  The Court of Appeal also noted that that SK had been “less than frank as to CTMS’s true financial position” when he was defending the administration process during 2023.

CTMS was moved from Administration to Liquidation on 27^th October 2023, with an overall debt estimated at £50m +.  The Judge wrote in his Judgment that “….despite the year-on-year decline in the company’s profits, Mr Knight was being paid around £30,000 p.m”….and…. “Entries taken from CTMSL’s nominal ledger also show that Mr Knight was using CTMSL’s bank account for his own personal expenses, which were then being designated as marketing expenses for CTMSL”.  Furthermore “…that Mr Knight would pay for his personal expenses through CTMSL and that he would then instruct his employees to create an invoice to cover these expenses that would be posted as marketing expenses for CTMSL”.

Strange behaviour for an Accountant.

Gibralter Financial Services Commission Regulation

Let’s just pause and remind ourselves that Castle Trust & Management Services was a regulated company (by the GFSC).  However, as we have blogged previously, the GFSC remains steadfastly silent, responding only with cut and pasted responses.  We blogged previously on Steven Knight and his shady connections also. Additionally, we know there were numerous complaints to the GFSC regarding CTMS and Steven Knight.  Yet, no action has been taken against Steven Knight, to the best of our knowledge.

Security Trustee Services

There are many victims of CTMS – pensions and investors.  All who placed their trust in a regulated off shore company where Steven Knight boasted his career and credentials.  We looked specifically at the role CTMS played as a Security Trustee for Loan Notes. We also researched Companies House for details of the value of the loan notes.  From 2013 -2023 (until Liquidation), Castle provided Security Trustee services for Loan Notes, and these all remain unsatisfied:

Company Status Loan Notes Value

Ridgemere Developments Ltd (in Liquidation) £5,500,000 

Platinum Assets & Developments Ltd (in distress – CCJ’s / Winding Up Order) £75,000,000 

Genesis One Ltd (trading) £2,800,000 

Arimco Limited (in Creditors Voluntary Liquidation) £3,250,000

High Street Commercial Finance Ltd (in Liquidation) Undisclosed

High Street Grp Ltd (in Liquidation) Undisclosed

All Saints Asset Management PLC (Accounts overdue) £10,000,000

High Street PRS (HSF3) Funding Ltd (Dissolved) Undisclosed

High Street PRS (HSF3) Funding Ltd (Dissolved) Undisclosed

The High Street Loan Note holders are owed £126,000,000, as we know. Added to the Loan Notes above, the total value of all these loan notes is a staggering £222,550,000. CTMS was responsible for these in the event of a default. Sadly, they seemingly issued them like confetti to unregulated investments in the UK

More questions

It does not take an accountant to work out that CTMS was over stretched and over committed on its Security Trustee services, making the Security Deed fundamentally worthless.  More questions remain unanswered – where were the GFCS in all this?  Who did the auditing?  How did CTMS gain permission to commit to providing Security Trustee services for such a large volume of loan notes? Why did CTMS not act in ANY of these defaulted Loan Note products?

Next – Pensions

Collating figures and sums on pension losses is a much harder task. Simply because there are no public records to refer to.  We have spoken to numerous pension clients of CTMS over the last few years. We conclude for now the figures are millions of losses through highly illiquid schemes.  The Dooley & 61 others claims “have been brought by pensioners against CTMS in its capacity as trustee of two Qualifying Recognised Overseas Pension Schemes, popularly known as QROPS. The claims are in respect of pensioner funds said to have been lost in such Schemes” and these alone are recorded as £35,000,000 in the Court Judgment.  

The pensioners claimed to have “been the victims of a classic “pension scam” orchestrated by unregulated intermediaries operating in England and Wales. The principal unregulated intermediary, a Cypriot firm known as Montegue Smyth (“MS”), is said to have been in a commercial relationship with Castle and to have been paid substantial fees or commissions by reference to each pension transfer referred by MS”.  Insolvency & Law wound up Montegue Smthe in early 2023 on a separate matter and later made the UK based sole Director and Shareholder, Graeme Boairdini bankrupt due to an unpaid debt of £225,000.  

We will explore the impact Castle Trust & Management Services mismanagement has had on pensions further in a later blog. For now, the liquidation process for CTMS remains painfully slow. I&L aims to give a public voice to those who have suffered losses due to Steven Knight and CTMS.

Sadly, they issued them like confetti to unregulated investments in the UK. We intend to keep asking questions until we get a satisfactory conclusion.  

Lastly:

• If you have a company or person of interest that you would like to have investigated for a fact-based report, please get in touch investigations@insolvencyandlaw.co.uk.
• If a company owes you money and refuses to pay, and you believe the debt is rightfully yours, please contact Insolvency & Law at investigations@insolvencyandlaw.co.uk to discuss your options.