‘Profiteering’ Home REIT to be sued over misleading investor information
Beleaguered property investor Home REIT has been hit by a lawsuit from investors today amid claims it is “profiteering from the housing crisis” and used misleading information to raise cash.
The social housing-focused firm has been hammered by a slew of claims from short sellers in the past two weeks over the quality of charity tenants in its portfolio and the accuracy of accounting information it has provided to its backers.
Specialist commercial litigation firm Harcus Parker has now launched a claim against the firm to seek redress and recoup investors’ cash on the grounds they were misled over the firm’s real operations.
Jenny Morrissey, partner at Harcus Parker who is leading the team, said: “Companies that are profiteering from the social housing crisis at the expense of the vulnerable and homeless should be held to account.
“We have spent months investigating and analysing information available in the public domain about Home REIT,” she added.
“What we have seen is troubling for its investors, particularly as many of them chose to buy shares in Home REIT because its stated purpose and vision are that it wishes to contribute to the alleviation of homelessness in the UK.”
The law firm, which has previously acted on behalf of burnt investors in Neil Woodford’s collapsed fund, said it is arguing investors paid more for their shares than they were actually worth and Home REIT had not used the cash raised in its funding rounds how it promised it would.
It alleges that the firm’s business model and the security of its income stream are also “materially different from what investors were told about them.”
The lawsuit comes as the latest blow to the firm after a barrage of attacks from short seller Viceroy Research and shadowy investment firm The Boatman Capital Research.
Viceroy launched the initial claim against Home REIT and slammed the quality of tenants in its property portfolio and raised questions over “round tripping” revenues by providing cash and funding to its tenants.
The attacks have caused Home REIT’s share price to plummet more than 35 per cent since the first attacks on the 23rd November.
Home REIT has been contacted for comment.