Questions have been raised over the links between a Liverpool property developer and a company based in the Seychelles.
Elliot Lawless recently placed three companies behind his more prominent schemes into administration. The move affected the Infinity and Aura sites in Liverpool and The Residence in Manchester.
Now an industry expert, close to The Residence scheme, has expressed concern at a charge placed on the site by the Equity Group.
Mr Lawless is a sole director in the company which is based in the Seychelles. Companies House records reveal that the Equity Group has charges on the Aura, Infinity and The Residence.
The ECHO understands:
A property expert said: "I don't understand the Equity Group charge on The Residence. The scheme appears to have been funded by the buyers. They have paid for everything."
Contracts that were signed by investors in the Residence scheme in Manchester state that investors' deposits can be used to fund all aspects of the development including buying land and marketing fees.
A legal charge is normal in commercial transactions and gives an organisation that lends money the right to take someone's property if the loan in respect of that property is not repaid.
A spokesman for Elliot Group said to the ECHO: “The investor-led funding model came into being because banks had left the market after the 2008 crash.
"Thanks to Elliot Group’s success in delivering so many developments offering healthy yields and strong capital growth, sophisticated retail investors have stuck with us and returned again and again to support our schemes.
“It’s worked very well as a model and enabled us to deliver more than 2,500 new homes and regenerate derelict sites in Liverpool and elsewhere.
"Until December 18, Elliot Group had maintained its 100 per cent track record of completing its developments, with hundreds of men on site seeking to deliver several thousand more homes to add to our achievements.
“We’ve been clear about the need to improve regulation of the market and we maintain that sensible regulation need not stop it from functioning smoothly.”
Commenting on the first charge secured by Equity Group on Aura, a spokesman said for Mr Lawless said: “In relation to the charge, this is the industry norm and any debt lender would take security in this way.”
The spokesman also confirmed that Mr Lawless is the sole director and shareholder of Equity Group Limited and that Equity Group has a UK bank account and is also resident in the UK for tax purposes.
The ECHO recently revealed that around 300 investors had put large sums of money into The Residence scheme.
An industry expert said that 300 buyers had paid out the first deposit on the scheme of £87,246,00 and a second deposit of £92,246,00.
The reservation fee of £5,000 has also been paid, he said. He suggested that up to £50m could be at risk.
However a spokesman for the Elliot Group said the majority of buyers had paid out deposits of around £25%. On this basis the buyers stake would be much lower - at around £15m.
Mr Lawless, 32, was arrested on suspicion of conspiracy to defraud, bribery and corruption on December 18 last year. Warrants were used to search his city centre home and office.
Police seized an estimated £337,34 and €10,442 from Mr Lawless during the raids.
Mr Lawless, who has always denied any wrongdoing, recently launched a legal challenge again the police search of his home and office.
Court documents recently revealed police recovered £337,34 from Mr Lawless when they executed a warrant last December.
Adam Christensen, representing Merseyside Police, won permission for the force to keep the cash for another 90 days during a hearing at Liverpool Magistrates.
He said: "There were reasonable grounds to suspect that the cash was recoverable or intended for use in unlawful conduct."
The court also ruled that police can hold on to an estimated £3,750 which was seized from senior Liverpool Council officer Nick Kavanagh.
Mr Kavanagh was arrested on the same day as Mr Lawless on suspicion of conspiracy to defraud and misconduct in a public office.
Police recently lost an application to extend bail conditions on Mr Lawless and Mr Kavanagh.
A spokeswoman for Merseyside Police confirmed to the ECHO that they have both been released under investigation, which is “ongoing”.
Mr Lawless said: “I have maintained from the outset that the allegations put to me were baseless and this ruling is an important step along the road to proving that point conclusively."
A spokesman for the developer said he was continuing with the judicial review into his arrest last December.
Mr Lawless recently appeared to suggest his arrest led directly to the collapse of his business.
He said: "We’ve explored every option available, but in light of the investigation, existing investors were cautious about backing the projects to their conclusion."
Mr Kavanagh has not commented publicly since his arrest.