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The UK’s top financial crime unit has unveiled a major probe into the past management of Home REIT after identifying as much as £300m in suspected fraud and bribery.
The Serious Fraud Office (SFO) said it has carried out raids and arrests into the former London-listed social housing company, including searches at homes in Altrincham, Maidenhead and London. The investigative unit also searched a commercial site in Manchester as well as a home in Venice, with the support of Italy’s Guardia di Finanza.
The SFO probe, which confirms previous reporting by City AM, will seek to determine whether fund managers connected with the company misled the market and investors over the financial stability of the firm and its tenants.
Home REIT’s ‘meteoric rise’ – and downfall
Emma Luxton, director of operations at the SFO, said: “This company had a meteoric rise, spending millions on properties that were supposed to house the most vulnerable in society and provide returns for investors.
“Its chaotic downfall has left many with unanswered questions. Today we conducted a major operation to advance our inquiries into suspected bribery and fraud.”
The social housing firm, which floated in 2020 on the promise of helping to alleviate homelessness in the UK, has been mired in scandal since a short report sounded the alarm on the structure of its tenant base in October 2022.
City AM has covered the twists and turns through a series of investigations and reports.
Since 2022 a string of its biggest tenants have gone bust. Shares in the business have been suspended since January 2023 after the company failed to publish its annual accounts before a regulatory deadline. City AM then revealed that the National Crime Agency was scrutinising the structure of some of the firm’s deals and that Home REIT and a property dealmaker had urged the firm’s tenants to “corroborate” dubious sustainability claims as part of an environmental, social and governance (ESG) “box ticking exercise.”
After becoming aware of allegations of wrongdoing in some of its deals, Home REIT itself called in external forensic accountants from Alvarez & Marsal in February 2023.
While Home REIT has not published the full findings of the report, it said it had uncovered the existence of “certain undisclosed potential outside business interests and undeclared potential conflicts of interest”.
