The 79th Group completed £1m investment months after police raid and weeks before collapse
Administrators are now left to try to sell a 41% share in a mining company
Hello and welcome to the midweek edition of The Southport Lead.
Today’s edition returns to the subject of The 79th Group, the Southport-based investment firm which is now being described as a £200m Ponzi scheme.
As administrators warn it could take years to fully understand the accounts and dealings of a business which had dozens of entities but did not separate them financially and which operated in the Middle East, Africa and North America, today’s edition focuses on a £1m investment which was made months after a police raid and weeks before administrators were called in.
Southport briefing
👛 Southport MP Patrick Hurley has called for the formula used to allocate local council funding to be updated to fight against growing inequality. The Labour MP said the current system means councils in less deprived areas have benefited disproportionately, building up reserves while others struggled to cope and has contacted Local Government minister Alison McGovern to express his concerns. Hurley said: “For too long under the Tories, areas like Southport were left behind and less likely to get essential funding for our local services. By putting local need at the heart of new council funding, the Labour Government is righting that wrong and fixing the outdated system. I’ll be campaigning to ensure Southport is heard and gets the funding it deserves – so we can deliver real-life improvements across our area.”
💷 Southport could benefit from additional investment in the likes transport, infrastructure, and the visitor economy thanks to a new levy on overnight stays. The Liverpool City Region is among the mayoral areas which will be allowed to introduce a ‘tourism tax’ to create a ringfenced fund for local improvements. Common in major European cities, the levy sees a small charge - typically around £1 - added to hotel fares to build up the dedicated fund.
Firm completed £1m share investment in mining business weeks before collapse
By Jamie Lopez
The operators of an alleged Ponzi scheme completed a £1m investment in a mining company months after being raided by anti-fraud police and weeks before calling in administrators.
The 79th Group, which sold unregulated loan notes to investors in exchange for promises of high returns, ran an international operation from a base at Southport Business Park and attracted hundreds of millions of pounds from investors. Its operation spread as far as the Middle East, Canada and USA and its developments including controversial sites in the UK and African gold mines.
However, the City of London Police raided the business in January, making multiple arrests and seizing assets including cash and jewellery. The business - which was spread across dozens of interconnected entities but appeared to pool funds across them - entered administration in May having become unable to continue its operations amid the investigation.
As previously reported by The Southport Lead, the company owes people more than £200 million and it is suspected of being one of the largest Ponzi schemes ever seen in the UK. Meanwhile, it is understood that two development sites which were used to attract investors were never actually bought by the company.
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