Directors of Centaur Global Limited banned from running a company for eight years

Betting firm bosses Keith Sobey, Hazel Sobey and Andrew Cork lied to investors before Northumberland firms collapse

Former Audit Commission senior manager Keith Sobey
Former Audit Commission senior manager Keith Sobey

Betting investment firm bosses have been banned from running another company for eight years after losing millions while gamblers were kept in the dark.

Northumberland-based Centaur Global collapsed in 2012, owing £2m. At the time it went under the firm had been trading while insolvent for two years.

Now an insolvency judgement reveals the full extent of the failure – and how it may never be known where all the money went.

Founded by a former Audit Commission senior manager Keith Sobey in 2000, Centaur provided members of the public and institutions with the opportunity to invest in gaming related funds and in gambling.

It went on to open an “academy” in the heart of London’s financial district and as recently as January 2011 claimed it was on track to handle £20m worth of investment funds, creating £2m a year in revenue.

But Centaur was placed into liquidation in January 2012 owing creditors more than £2m, including a significant shortfall of client account monies.

Now the Insolvency Service judgement show the company was in trouble long before that, losing money nearly every month from the end of 2008 onwards, and using its clients’ supposedly ring-fenced cash to try to cover mounting problems at the business.

Centaur started life as a tipping service with Sobey, 65, his wife Hazel, 60 – a former head of payroll for C&A – and fellow auditor Andrew Cork, 54, at the helm.

It opened its City trading academy in January 2010 on the back of changes to legislation which opened up the European betting and sports investment markets.

The 4,000sq ft academy in London’s City Tower offices delivered training, mentoring and analysis services to “sports traders”, with a daily course costing up to £500.

The company’s investment products were privately-managed accounts rather than pooled funds and used investors’ money to follow betting programmes on horse-racing, football and tennis.

Sobey – who had homes in Seahouses, the Lake District, London and Tenerife, and owned the Northumberland village’s newsagents, which his family ran – claimed his horse-racing fund delivered a 200% annual return and said he hoped to expand the business into the US and eventually bring in revenues of £100m.

But in 2009 Centaur Global made net losses of £414,598, and the picture did not improve in 2010, as the firm found itself down a further £465,817.

Analysis of Centaur Global’s records and accounts showed that money from clients’ accounts was being used to shore up the company.

By December 2011 the total shortfall in its clients’ accounts had passed £1.5m, but directors continued to advertise as if clients’ money was protected.

When Centaur Global finally called in the liquidators on January 26, 2012, it owed investors more than £1.63m – but a complex series of loans between the firm and its sister entity Centaur Holdings, and their directors, coupled to a lack of records mean there are still questions as to exactly where that money went.

In the year to 2010 Centaur Global received loans from Centaur Holdings of £564,000, but paid £731,623 to subsidise its sister company. By the time it went under, Centaur Global was still owed £87,940 by the other business.

But the Insolvency Service also found that from January 2011 records were less than “substantive” – a period that saw all monies from the designated client reserves drained and transferred into a new company current account.

From 2010 onwards loans of more than £1.5m were made to company directors to gamble with in an effort to receive “better returns than those offered to Global.”

According to the directors this betting saw a total of £4,147,497 staked or lost, against winnings of £4,148,487 – a net profit of just £990 in two years, but these accounts were labelled “inconsistent” by the Insolvency Service, which said it had “not been possible to ascertain the true figure of returns due to Global” or account for £1,582,602 of the firm’s cash.

The firm’s clients told investigators that had they known that the company was breaching its own terms and conditions by not keeping their cash in separate accounts and using their cash to bet without asking them first then they would have not gone anywhere near Centaur.

The Insolvency Service judgement stated that Mr Sobey’s explanations of the firm’s activities were “inconsistent.”

It is not yet known if any prosecutions have been brought over the case.

A spokesman for the Serious Fraud Office said:

Last year joint liquidators Jamie Taylor and Kirstie Provan of Begbies Traynor concluded a settlement in respect of a seven figure claim brought against the directors of Centaur Global.

Details of the settlement remain confidential, but the liquidators and a legal team said they had “achieved significant recoveries for the benefit of creditors.”

Mr Taylor said: “The operation of the company was the subject of a full investigation by the Contentious Insolvency Division at Begbies Traynor, and by progressing proactive aggressive litigation against the directors, we have within a very short period of time maximized the potential recovery of funds on behalf of the creditors.”

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