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Post by topgun on Mar 1, 2014 15:11:01 GMT
Did you see the response in Q&A for this loan? For sure they had 2 loans with TC supposed to have been paid back in 2012. But due to planning problems the first loan was in debt, & believe the second capital is still owed by same organisation. Maybe it will not impact this new loan with FK.
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wysiati
Member of DD Central
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Post by wysiati on Mar 1, 2014 15:42:52 GMT
Did you see the response in Q&A for this loan? For sure they had 2 loans with TC supposed to have been paid back in 2012. But due to planning problems the first loan was in debt, & believe the second capital is still owed by same organisation. Maybe it will not impact this new loan with FK. The loan is already fully funded with the reserve met so the anwswer to your question appears to be that there will be no meaningful impact. Actually, strictly speaking the FK borrower did not have any ThinCats loans and there are no charges outstanding in favour of ThinCats Loan Syndicates Ltd but rather other vehicles were used. Potential lenders are free to make inferences from the fact that two 12 month loans drawn down in March and August 2011 respectively remain unpaid in March 2014 although some more detail regarding the reasons might be helpful. The new FK auction certainly does invite scrutiny/review of the outstanding TC loans position - the Sponsor has been alerted by TC members.
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Post by topgun on Mar 1, 2014 18:47:37 GMT
Apparently the TC docs show the FK borrower was directly or at least partially involved with both loans back in 2011. This seems to be an example of a co. hiding behind some clever distribution of responsibility.
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wysiati
Member of DD Central
Posts: 397
Likes: 86
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Post by wysiati on Mar 1, 2014 19:13:52 GMT
Apparently the TC docs show the FK borrower was directly or at least partially involved with both loans back in 2011. That has aleady been established, but a number of vehicles have been involved. For example, the second TC loan was to be made to O**l C********l I*********s Limited, which was 75% owned by the FK borrower, O**l E*****s (B**h) Ltd. Not for the first time questions could be raised about disclosure/due diligence failures on Funding Knight (FK) loan listings. In a similar episode another borrower (F***T R******e T******g & C*********y S******s Ltd) denied having any loans with Funding Circle though the entity seeking the FK loan. When challenged by a lender in Q&A it turned out that they were clueless and that they had existing FC loans. The necessary permissions had not been sought and a supplementary auction had to be launched to repay the FC debt and avoid a breach of FC's T&Cs.
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Post by jackpease on Mar 2, 2014 8:43:34 GMT
It'd be really good if this and other platforms contained a very specific disclosure of borrower loans on other platforms - or declaration that there are none. Presumably it would become a criminal fraud issue if the declaration wasn't true.
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Post by mrclondon on Mar 2, 2014 11:33:28 GMT
Cases like this really highlight the weakness of the P2B model when operated by platforms that do "paper" based due diligence (FK / FC / FE / RebSoc etc) as opposed to "meet and interrogate" due diligence (TC / AC).
In this case there is a clear link between the FK borrower and the distressed TC loans, and for FK to not provide a detailed commentary simply brings their platform into disrepute.
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Post by graeme on Mar 4, 2014 18:08:54 GMT
It'd be really good if this and other platforms contained a very specific disclosure of borrower loans on other platforms - or declaration that there are none. Presumably it would become a criminal fraud issue if the declaration wasn't true. Sorry for slow reply - half the team seems to have 'flu! You make a good point - and one we try very hard to adhere to. Firstly, we always ask each borrower to disclose all current loans (whether or not on other platforms), including loans they are currently applying for. We show the list of all current loans on the loan display at auction, from which should be clear where a borrower has taken out a loan on other platforms. Also, if a borrower is contemplating taking out a loan elsewhere, this has to be agreed and disclosed prior to auction listing, at which point he has committed to taking a loan through us. Simultaneous applications by a borrower through multiple platforms are in nobody's interest in crowdlending. Fortunately, the Crowd inevitably finds this out quickly and votes with its feet. The situation with companies which are members of groups is more complex. Our objective at FundingKnight is to present fairly the position of the corporate borrower. We look at inter company relationships and assess their likely impact on the borrower. If we think other group arrangements potentially have a material impact on the borrower's position, we will always disclose this. This means that we may be aware of a raft of information about other group companies (including loan arrangements), but we will only disclose these if we feel they are relevant and material in a potential investor's assessment of the loan. We were aware of the other loans in the case of O**l Esta**s. We have commented on this in more detail in the Q&A section of the loan. Hope this helps, regarding our approach. Improving our loan information on our platform (both content and presentation) is one of my priorities and I hope you (& others) will contribute your thoughts on our suggested new version when the time comes.
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