Vijay Devadoss is a 62-year-old retired NHS orthopaedic surgeon who invested £450,000 in nine rooms in Gavin Woodhouse’s Clifton Moor development in June 2015.
He was told that Clifton Moor would be operational and generating profits from last year but, at the site near Wigan, there is an overgrown plot where the care home should now be.
Devadoss was expecting his first interest payment of £78,000 from Woodhouse’s company, Northern Powerhouse Developments (NPD), on 6 June this year but it has yet to arrive. He is disturbed to discover the status of the site.
“I was expecting a nursing home with 70 beds, so I’m really shocked to see that nothing has happened,” he said earlier this month. “If my wife was here, she would start to cry. I’m really upset but what else can I do?
“[I’m] devastated and really disgusted; more so because my wife is so upset. She is in a position where she has to carry on working.
“We were banking on [the interest payment] for our future. It is our real lifetime savings and pension for us. Because of this both of us have to rethink our plans and carry on working.”
Devadoss is not the only investor in Woodhouse’s care home projects who is concerned about what might happen to their savings. Earlier this year Woodhouse wrote to investors admitting to cashflow problems and telling them he would be rescheduling their dividends.
Another investor, who did not want to be named but put about £40,000 into the Walsden care home project in West Yorkshire in 2014, said: “When my dad died, he said to me: ‘Put the money that you will get from the house into property.’ So we followed his advice. We thought this [project] is really good, it fits in with the amount we can afford and it’s a really worthwhile thing because we like to be altruistic and help other people through life.”
Annual scheduled dividends have been delayed in each year of the investment and only received after sustained chasing. It has left the investor worried if they will ever see their money again.
“I wish I’d never seen [this investment] … There are so many people who have put much more than we have into it and my heart bleeds for them. I really don’t know if I’ll get the money at all. There was my dad giving what he thought was sensible advice and I sort of let him down. It’s quite upsetting really. I feel I’ve been taken for a mug, as so many people have.”
In Burnley at Hawthorn, the third unbuilt care home for which Woodhouse raised funds, another investor who did not want to be identified has been trying to confirm that his money is safe for almost a year.
Communications with NPD’s sales agents had left him with the firm impression that the funds raised to build Hawthorn were being safeguarded by Woodhouse’s solicitor, Metis Law. But repeated efforts to obtain proof the money was safe were frustrated over many months.
“All I’m asking for is that they are holding £50,000 of my money somewhere safe. I don’t know what the difficulty is,” the investor told the Guardian.
Rajat Sharma, a partner at Metis Law, said: “The solicitors’ professional rules prohibit the firm from engaging in any dialogue with third parties about any client’s affairs without the express consent of that client. In the case of Northern Powerhouse Developments Ltd, we did not have that consent. Accordingly, we were unable to answer investors’ questions.”
Woodhouse now says the funds are not with Metis but “in bank accounts, which are separate and allocated to each SPV [special project vehicle]”.
A spokesman for NPD said: “We have up to 600 investors, the vast majority of which have not voiced concerns. The allegations made by the Guardian and ITV concern a handful of disgruntled investors and do not reflect the view of investors in Northern Powerhouse Developments as a whole.”
Northern Powerhouse Developments denies any wrongdoing. Here is its complete response.
