Three people have been banned as company directors after they misled investors who paid more than £4m into a Derby city centre student accommodation development.
Fraser MacDonald was a director of Prosperity Cathedral View Development Ltd which was behind The Croft development on Cathedral Road before the company went into administration in 2020.
The 53-year-old was also a director of Prosperity Cathedral View NMPI Ltd, a company used as a fundraising vehicle to attract investors for the development.
In his role as Investor Relations Director, MacDonald allowed 42 investors to be misled when they entered into loan agreements with Prosperity Cathedral View NMPI worth a combined £4.13 million.
They thought their money would go into the Derby development, but instead more than £2 million was transferred to a connected company.
MacDonald, of Walkdale Brow, Glossop, Derbyshire, has been disqualified as a company director for seven years, until February 2032. The companies’ Chief Exec Gavin Barry, 49, and COO Edward Fowkes, 52, were both also disqualified as directors in 2021 for their roles in causing or allowing the investors to be misled in 2019.
Ann Oliver, Chief Investigator at the Insolvency Service, said: “Fraser MacDonald, Gavin Barry and Edward Fowkes allowed the continued promotion of an investment offer which was misleading to investors.
“Significant sums of money were invested by people who thought they had more security over their investments than they actually did.
“We also uncovered evidence that the three directors did not use all the funds borrowed for financing the development at The Croft development as they had promised.”
MacDonald has now been removed from the corporate arena until January 2032 and joins Barry and Fowkes in being barred from running, managing or promoting a company without permission of the court.
A total of 44 investments were made by 42 high net worth investors in the Derby scheme between January and July 2019. The highest individual investment during that period was £504,000.
