Directors banned after investors lost millions in student scheme

Forty-two investors were misled by Fraser MacDonald, Gavin Barry and Edward Fowkes, directors of companies which promoted the Derby city centre student accommodation development.

MacDonald, 52, was a director of Prosperity Cathedral View Development Ltd which was behind “The Croft” development before the company went into administration.

He was also the 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, he let 42 investors be misled when they entered into loan agreements with the firm, worth a combined £4.13 million.

A total of 44 investments were made in the Derby scheme between January and July 2019 with the highest individual investment at £504,000.

Investors were promised their money would go into the Derby development, but more money was raised for The Croft development than was needed, with just over £2 million transferred to a connected company.

Fraser MacDonald’s company went into administration in May 2020 with liabilities of more than £29 million and he has now been banned for seven years until February 2032.

Administrators sold The Croft for more than £18 million in March 2021 with the priority lender being repaid in full and the second commercial lender being partially repaid. 

However, no money was returned to the 42 investors.

The companies’ chief executive Gavin Barry, 49, and chief operating officer 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.”

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