DECISION NOTICE

_________________________________________________________


To:

Church Hill Finance (Anthony Badaloo trading as)

ACTION

1.
For the reasons listed below and pursuant to section 55J of the Act, the Authority
has decided to cancel Mr Badaloo’s Part 4A permission.

REASONS FOR THE ACTION

2.
It appears to the Authority that Mr Badaloo is failing to satisfy the suitability
Threshold Condition in that:

(a) Mr Badaloo, a sole trader, has since 13 April 2015 repeatedly failed to comply

fully, or at all, with reasonable Authority requests to provide information and
documents to the Authority in relation to his business records and his creditor
position;

This Decision Notice was superseded by a Final Notice dated 9 November

2017.

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(b) Mr Badaloo has not been open and co-operative in all of his dealings with the

Authority, in breach of Principle 11 (Relations with regulators) of the
Principles; and

(c) On 2 October 2015, Mr Badaloo was convicted of one count of trespassing

and one count of theft, and on 30 October 2015, he was sentenced for those
offences to a Community Order of unpaid work of 100 hours, and ordered to
pay £3,500 in costs, plus a £60 victim surcharge. On the basis of this, the
Authority considers that Mr Badaloo cannot be expected to act with probity.

3.
In the light of these matters, the Authority considers that Mr Badaloo is not fit
and proper to be permitted to conduct regulated activities.


DEFINITIONS

4.
The definitions below are used in this Notice:

“the Act” means the Financial Services and Markets Act 2000;

“the appropriate resources Threshold Condition” means the threshold condition
set out in Paragraph 2D of Schedule 6 to the Act;

“the Authority” means the body corporate previously known as the Financial
Services Authority and renamed on 1 April 2013 as the Financial Conduct
Authority;

“COND” means the Threshold Conditions part of the Handbook;

“EG” means the Authority’s Enforcement Guide;

“the Handbook” means the Authority’s Handbook of rules and guidance;

“the Principles” means the Authority’s Principles for Businesses;

“Mr Badaloo” means Anthony Badaloo, a sole trader, whose trading name is
Church Hill Finance;

“Mr Badaloo’s Part 4A permission” means the permission granted to Mr Badaloo
under Part 4A of the Act;

“the suitability Threshold Condition” means the threshold condition set out in
paragraph 2E of Schedule 6 to the Act;

“SYSC” means the Senior Management Arrangements, Systems and Controls
sourcebook in the Handbook;

“the Threshold Conditions” means the threshold conditions set out in Schedule 6
to the Act; and

“the Tribunal” means the Upper Tribunal (Tax and Chancery Chamber).

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FACTS AND MATTERS

5.
Mr Badaloo was authorised by the Authority on 29 October 2004 to conduct
designated investment business, and on 31 October 2004 he was also permitted
to conduct regulated home finance business.

6.
Mr Badaloo has since 13 April 2015 repeatedly failed to comply fully, or at all,
with reasonable requests by the Authority that he provide information and
documents to the Authority in relation to his business records and his creditor
position.


7.
In failing to provide information and documents to the Authority in relation to his
business records, Mr Badaloo has failed to explain to the Authority what
alternative arrangements he has made to demonstrate that he satisfies his
record-keeping obligations under SYSC 9.1.1R, following the repossession of his
principal place of business on 7 November 2014 and the destruction of his
business records on 24 June 2015.


8.
Further, Mr Badaloo’s failure to provide the information and documents to the
Authority in relation to his business records and his creditor position means that
the Authority is unable to assess whether Mr Badaloo’s financial and non-financial
resources are appropriate in relation to the regulated activities that he carries on
and therefore whether Mr Badaloo is satisfying the appropriate resources
Threshold Condition.


9.
On 2 October 2015, Mr Badaloo was convicted on indictment at Harrow Crown
Court of one count of trespassing, contrary to sections 144(1) and (5) of the
Legal Aid, Sentencing and Punishment Act 2012, and one count of theft, contrary
to sections 1(1) and 7 of the Theft Act 1968.


10.
On 30 October 2015, Mr Badaloo was sentenced for those convictions at Harrow
Crown Court to a Community Order of unpaid work of 100 hours, and was
ordered to pay £3,500 in costs, plus a £60 victim surcharge.

11.
The Authority has invited Mr Badaloo to apply to cancel his Part 4A permission,
but Mr Badaloo has declined to do so.

FAILINGS

12.
The statutory and regulatory provisions relevant to this Notice are set out in
Annex A.

13.
Based on the facts and matters set out above, it appears to the Authority that Mr
Badaloo is failing to satisfy the suitability Threshold Condition. In particular:

(a)
Mr Badaloo’s unreasonable failure to provide the information requested by
the Authority leads the Authority to consider that he is failing to be open
and co-operative with the Authority, in breach of Principle 11 (Relations
with regulators) of the Principles;

(b)
Mr Badaloo has failed to satisfy the Authority that he is ready, willing and
organised to comply with the requirements and standards under the
regulatory system (COND 2.5.6G(1)); and

(c)
On the basis of Mr Badaloo’s criminal convictions, the Authority considers
that Mr Badaloo cannot be expected to act with probity (COND
2.5.1AUK(1)(e) and COND 2.5.6G(2)).

14.
In the light of these matters, the Authority considers that Mr Badaloo is not a fit
and proper person having regard to all the circumstances. Accordingly, the
Authority has decided that Mr Badaloo’s Part 4A permission should be cancelled.


REPRESENTATIONS

15.
Annex B contains a brief summary of the key representations made by Mr
Badaloo, and how they have been dealt with. In making the decision which gave
rise to the obligation to give this Notice, the Authority has taken into account all
of the representations made by Mr Badaloo, whether or not set out in Annex B.


PROCEDURAL MATTERS

16.
This Notice is given to Mr Badaloo under section 55Z and in accordance with
section 388 of the Act.


17.
The following paragraphs are important.

Decision Maker

18.
The decision which gave rise to the obligation to give this Notice was made by the
Regulatory Decisions Committee.

The Tribunal

19.
Mr Badaloo has the right to refer the matter to which this Notice relates to the
Tribunal. Under paragraph 2(2) of Schedule 3 of the Tribunal Procedure (Upper
Tribunal) Rules 2008, Mr Badaloo has 28 days from the date on which this Notice
is given to him to refer the matter to the Tribunal. A reference to the Tribunal is
made by way of a signed reference notice (Form FTC3) filed with a copy of this
Notice. The Tribunal’s contact details are: The Upper Tribunal, Tax and Chancery
Chamber, Fifth Floor, Rolls Building, Fetter Lane, London EC4A 1NL (tel: 020 7612
9730; email fs@hmcts.gsi.gov.uk). Further information on the Tribunal, including
guidance and the relevant forms to complete, can be found on the HM Courts and
Tribunal
Service
website:
http://www.justice.gov.uk/forms/hmcts/tax-and-

chancery-upper-tribunal


20.
A copy of the reference notice (Form FTC3) must also be sent to the Authority at
the same time as filing a reference with the Tribunal. A copy of the reference
notice should be sent to Roger Hylton at the Financial Conduct Authority, 25 The
North Colonnade, Canary Wharf, London E14 5HS.


21.
Once any referral is determined by the Tribunal and subject to that
determination, or if the matter has not been referred to the Tribunal, the
Authority will issue a final notice about the implementation of that decision.

Access to evidence

22.
Section 394 of the Act applies to this Notice. In accordance with section 394(1),
Mr Badaloo is entitled to have access to:

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(a)
the material upon which the Authority has relied in deciding to give Mr
Badaloo this Notice. Mr Badaloo has been provided with a copy of all such
material. This consists of the material which was given with the Warning
Notice issued to Mr Badaloo on 1 June 2016, and further material which
the Authority has obtained since that date and made available to him; and

(b)
any secondary material which, in the opinion of the Authority, might
undermine that decision. There is no such secondary material.

Confidentiality and publicity

23.
This Notice may contain confidential information and should not be disclosed to a
third party (except for the purpose of obtaining advice on its contents). In
accordance with section 391 of the Act, a person to whom this Notice is given or
copied may not publish the Notice or any details concerning it unless the
Authority has published the Notice or those details.


24.
However, the Authority must publish such information about the matter to which
a decision notice or final notice relates as it considers appropriate. Mr Badaloo
should be aware, therefore, that the facts and matters contained in this Notice
may be made public.


25.
For more information concerning this matter generally, Mr Badaloo should contact
Roger Hylton at the Authority (direct line: 020 7066 8168).

Tim Parkes
Chair, Regulatory Decisions Committee



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ANNEX A

RELEVANT STATUTORY AND REGULATORY PROVISIONS

1.
The Authority’s operational objectives established in section 1B of the Act include
securing an appropriate degree of protection for consumers.

2.
The Authority is authorised by section 55J of the Act to, amongst other things,
cancel a firm’s Part 4A permission where it appears to the Authority that it is
failing to satisfy the Threshold Conditions.


3.
The appropriate resources Threshold Condition provides, in relation to a person
(“A”) carrying on or seeking to carry on regulated activities which do not consist
of or include a PRA-regulated activity, that:


“The resources of A must be appropriate in relation to the regulated
activities that A carries on or seeks to carry on.”

4.
The suitability Threshold Condition provides, in relation to a person (“A”) carrying
on or seeking to carry on regulated activities which do not consist of or include a
PRA-regulated activity, that:

“A must be a fit and proper person having regard to all the circumstances,
including-

(c)
the need to ensure that A’s affairs are conducted in an
appropriate manner, having regard in particular to the
interests of consumers and the integrity of the UK financial
system;

(d)
whether A has complied and is complying with … requests
made by the [Authority], relating to the provision of
information to the [Authority] …;

(e)
whether those who manage A’s affairs have adequate skills
and experience and have acted and may be expected to act
with probity;

5.
In exercising its power to cancel a Part 4A permission, the Authority must have
regard to the regulatory requirements and guidance published in the Handbook.
The main considerations relevant to the action stated in this Notice are set out
below.


Relevant Principle

6.
Principle 11 (Relations with regulators) of the Principles, states that a firm must
deal with its regulators in an open and cooperative way, and must disclose to the
appropriate regulator anything relating to the firm of which the regulator would
reasonably expect notice.

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Relevant rule

7.
SYSC 9.1.1R states:

“A firm must arrange for orderly records to be kept of its business and internal
organisation, including all services and transactions undertaken by it, which must
be sufficient to enable the appropriate regulator … to monitor the firm's
compliance with the requirements under the regulatory system, and in particular
to ascertain that the firm has complied with all obligations with respect to
clients.”

Guidance concerning the suitability Threshold Condition

COND 2.5 – Suitability: Paragraph 2E of Schedule 6 to the Act

8.
COND 2.5.1AUK(1) reproduces the relevant statutory provision that the person
concerned must satisfy the Authority that he is a fit and proper person having
regard to all the circumstances, including amongst other things: the need to
ensure his affairs are conducted in an appropriate manner, having regard in
particular to the interests of consumers; whether he has complied and is
complying with requests made by the Authority, relating to the provision of
information to the Authority; and whether those who manage his affairs have
adequate skills and experience and act with probity (COND 2.5.1AUK(1)(c),(d)
and (e)).


9.
COND 2.5.4G(2) states that examples of the considerations to which the
Authority may have regard when assessing whether a firm will satisfy and
continue to satisfy the Threshold Conditions include whether the firm conducts its
business with integrity and in compliance with proper standards (COND
2.5.4G(2)(a)).

10.
COND 2.5.6G gives examples of the kind of particular considerations to which the
Authority may have regard when assessing whether a firm will satisfy, and
continue to satisfy, the suitability Threshold Condition, including but not limited
to: (i) whether the firm has been open and co-operative in all its dealings with
the Authority and is ready, willing and organised to comply with the requirements
and standards under the regulatory system (COND 2.5.6G(1)); and (ii) whether
the firm has been convicted, or is connected with a person who has been
convicted, of any criminal offence, with particular consideration to be given to
offences of dishonesty, fraud or financial crime (COND 2.5.6G(2)).

The Enforcement Guide

11.
The Authority's policy in relation to its enforcement powers is set out in EG,
certain provisions of which are summarised below.

12.
EG 8.1.1 reflects the provisions of section 55J of the Act that the Authority may
use its own-initiative power to cancel a firm’s Part 4A permission where the firm
is failing or is likely to fail to satisfy the Threshold Conditions (EG 8.1.1(1)); or
where it is desirable to exercise the power in order to advance one or more of the
Authority’s operational objectives (EG 8.1.1(3)).

13.
EG 8.5.1(1) states that the Authority will consider cancelling a firm’s Part 4A
permission using its own-initiative power contained in section 55J of the Act in
circumstances where the Authority has very serious concerns about the firm.

ANNEX B

REPRESENTATIONS

1. Mr Badaloo’s representations (in italics), and the Authority’s conclusions in

respect of them, are set out below.


2. The Authority relied, in support of the matters set out in this Notice, on materials

which had not been appropriately verified; for example by being sealed by a court
or other official body. As such, those materials did not constitute evidence of
those matters and the matters in the Notice had not been proven by the
Authority.


3. Individuals at regulated firms had stolen his business items and properties, with

assistance from the Authority, the police and the courts.


4. Staff of the Authority’s Enforcement and Market Oversight Division had concealed

evidence which demonstrated certain matters of assistance to Mr Badaloo; for
example, that he had never been properly evicted from the property to which his
convictions for trespass and theft related, demonstrating that he could not be
guilty of those offences; and that he was the beneficial owner of the property at
the material time.

5. Information held by certain credit reference agencies relating to county court

judgments against Mr Badaloo was inaccurate and misleading. His credit files
show that there have been no missed payments, no arrears, no defaults, no court
judgments and no repossessions.

6. He had explained to the Authority in January 2015 that he had computer back-

ups of the files which had been stolen and that he would take steps to minimise
the business interruption, which he has since taken.

7. The decision to cancel Mr Badaloo’s Part 4A permission was made on behalf of the

Authority by the Regulatory Decisions Committee, a committee of the Authority
which is independent from the Authority’s Enforcement and Market Oversight
Division (“Enforcement”). The decision was made on the basis of documentary
evidence provided by Enforcement in support of the case against Mr Badaloo.
The Authority is not required to provide “verified” documents, and is satisfied that
the documents it has relied upon are evidence of the matters to which they relate
and prove those matters. Mr Badaloo has not produced any evidence of his own
to disprove any of those matters, beyond bare assertion.

8. The Authority’s Regulatory Decisions Committee has not seen any evidence in

support of Mr Badaloo’s assertion that his business items and properties were
stolen, or which would suggest that there has been any improper conduct by the
Authority, the police or the courts.

9. The Authority’s Regulatory Decisions Committee has also not seen any evidence

in support of Mr Badaloo’s allegation that Enforcement staff concealed evidence.
In fact, Enforcement obtained further evidence to demonstrate certain of the
matters disputed by Mr Badaloo, including that the relevant property was duly
repossessed by creditors, and that the property is now owned by someone else.

10. The Authority does not accept that the information held by credit reference

agencies is misleading, nor that the ‘credit files’ that Mr Badaloo produced at the
oral representations meeting constitute satisfactory evidence of his creditor
position. The provision of these documents at the oral representations meeting
does not alter the Authority’s conclusion that Mr Badaloo has not been open and
cooperative with the Authority by repeatedly failing to comply with reasonable
requests to provide the Authority with information and documents regarding his
creditor position.

11. The Authority’s Regulatory Decisions Committee has not seen any evidence that

Mr Badaloo provided an explanation to the Authority in January 2015, or at any
other time, regarding his business files. In any event, whether or not he
provided such an explanation at that time, he has still repeatedly failed to comply
with the Authority’s reasonable requests, since 13 April 2015, for information
regarding his business records.

12. Mr Badaloo has the right to pursue his allegations regarding the Authority’s

conduct using the Complaints Scheme established under the Financial Services
Act 2012.