Wednesday 24 April 2019 10:48 am

Tory MP Johnny Mercer dismisses alleged ties to London Capital & Finance as 'smear' by rivals

Tory MP Johnny Mercer has hit back at allegations he was involved in collapsed firm London Capital and Finance (LCF), claiming they are part of a "co-ordinated attempt" to go after him.

Mercer, who is thought to want to run for Tory leader, has been under scrutiny for his non-executive director role at the Crucial Academy, for which he receives an £85,000 salary.

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The academy aims to help military veterans back into employment.

It is also funded by a company called Surge Financial Limited, which earned a 25 per cent commission for marketing bonds by LCF, which has been placed into administration.

LCF is now being investigated by both the Financial Conduct Authority (FCA) and Serious Fraud Office (SFO) for its misleading promotion of mini bonds, which were being marketed as ISA eligible when they were not. Investors are thought to have lost the £230m they put into the failed scheme.

Mercer responded to the allegations on Twitter.

He said: "In response to the story today that through my work for a cyber training academy that skills up veterans and places them in jobs, I have somehow been paid money from a collapsed bond scheme run by a company I’ve never heard of, never met, or never had anything to do with at all."

In a statement, Mercer said: "Clearly there is some co-ordinated effort to go after me at present – the reasons for which are unclear.

"Let me be very clear from the outset – I totally reject the assertion that I have done anything wrong in working as a non-executive director of Crucial Academy.

"It is possible to draw a link between an individual and any number of companies. I have sought rigorous assurances that at no stage was capital used from any business with LCF, in Crucial Academy. I received those assurances."

He added that he had no role in any "historical link" between the firms, which the BBC uncovered in accounts after Surge Group appeared to loan the Crucial Group £325,095.

Mercer only became involved last autumn.

He said that when the link emerged, the leadership of Crucial Academy implemented a management buy-out before repaying the loan.

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"I 'get' that this is an attempt to tie me to another company – London Capital and Finance – that has imploded, amid allegations of fraud," he added.

"I have never met, heard of or had any interest in this company previously, yet alone the financial products they offered. I have huge sympathies with bondholders, and would support them in any future action they take to try and recover their position.

"The wider context of calling out deliberate efforts to smear me by my so-called colleagues in the House of Commons, and this story appearing so soon afterwards, I will leave for others to judge."