The FSA announces depositors to be repaid in case against unauthorised firm
09/12/1999
The FSA announced today it has successfully concluded High Court proceedings against an unauthorised firm, Goldstar Finance plc (Goldstar) and its managing director, Mr Tarsem Lal Arora. Goldstar and Mr Arora have undertaken to the Court to repay deposits with interest due to at least 18 Goldstar depositors.
The FSA alleged that since 1991:
Goldstar had carried on a deposit taking business and accepted deposits in the course of that business without authorisation in contravention of s3 Banking Act; and
Mr Arora was knowingly concerned in the carrying on of the deposit taking business and accepting deposits in the course of that business.
The FSA commenced proceedings against Goldstar and Mr Arora on 3 August 1999 when it obtained an interim asset freezing injunction, which restrained them both from dealing with their assets. The FSA also obtained an interim injunction which restrained Goldstar and Mr Arora from accepting deposits in contravention of s3 of the Banking Act 1987.
The FSA has now agreed terms with Goldstar and Mr Arora for the settlement of the FSAs proceedings. These terms are set out in the Courts Order of 6 December 1999 in which the firm and individual have undertaken to the Court:
not to accept deposits in the course of carrying on a deposit taking business in the UK in contravention of s3 of Banking Act 1987; and
to repay deposits with interest to Goldstar depositors.
The Order identifies that there are at least 18 depositors who have placed deposits. Goldstar has agreed to transfer some 475,000 to a designated account for this purpose. Accountants are to be appointed by Goldstar and Mr Arora to prepare a schedule identifying outstanding depositors and the sums due to them.
The firm and individual have agreed to pay 20,000 to the FSA towards the FSAs costs of bringing the proceedings. Once this payment has been made, the FSAs proceedings will be stayed and the injunction freezing Goldstar and Mr Aroras assets will come to an end.
Notes for editors
Goldstar Finance plc is based at 4 High Street, Slough.
Section 3 of the Banking Act 1987 provides that no person shall in the UK accept a deposit in the course of carrying on a deposit taking business unless that person is an authorised or exempted person.