Lawbit

Summary

The request sought details on a £500,000 investment by the Department for Enterprise into Lawbit Isle of Man Ltd, including the funding scheme and safeguards. The authority disclosed the investment amount, the Enterprise Development Scheme 2015 as the funding vehicle, and the specific security measures taken, such as secured loan notes and debentures.

Key Facts

• £500,000 was invested into Lawbit Isle of Man Ltd in two equal tranches in January and December 2018.
• The funding was provided under the Enterprise Development Scheme (EDS) 2015.
• The investment was structured as secured loan notes with Debentures and Share Warrants held over the UK parent companies.
• The EDS 2015 was originally managed by Spark Impact before the Department took over administration in January 2019.
• The scheme was closed to new applications in April 2022, though the investment portfolio remains active.

Data Disclosed

• £500,000
• January 2018
• December 2018
• October 2015
• January 2019
• April 2022
• £6 million
• 2018
• 2024-12-03
• 2024-12-24
• 4291997

Exemptions Cited

• Section 30 of the Act (considered but not applied due to specific circumstances and prior publication)

Original Request

A UK company part-funded by the Department for Enterprise has gone into administration owing around £6 million. It was given money by the department in 2018. please can you confirm- 1. how much money was given to Lawbit 2. why the money was given, under what scheme did they qualify? 3. What safeguards were given for the investment? Thank you

Data Tables (1)

Full Response Text

Freedom of Information Co-ordinator 1st Floor, St Georges Court Upper Church Street, Douglas Isle of Man IM1 1EX

Telephone: (01624 686400) Website: https://www.iomdfenterprise.im/

Our ref: 4291997 24 December 2024

Dear ###,

We write further to your request, received 3 December 2024, which states:

"A UK company part-funded by the Department for Enterprise has gone into administration owing around £6 million.

It was given money by the department in 2018.

please can you confirm-

1. how much money was given to Lawbit

2. why the money was given, under what scheme did they qualify?

3. What safeguards were given for the investment?

Thank you"

Our response to your request is as follows:

“1. how much money was given to Lawbit”

“2. why the money was given, under what scheme did they qualify?”

Under normal circumstances, when requested to provide information which relates to specific amounts of financial assistance, or other forms of support, provided to specific businesses, the Department would consider the application of an exemption under section 30 of the Act.

However, given the specific circumstances of this request and the prior publication of certain information pertaining to the administration of linked companies, the Department can confirm that £500,000 was invested into an Isle of Man registered company, Lawbit Isle of Man Ltd, through two equal tranches in January and December 2018.

The investment was made through the Enterprise Development Scheme (EDS) 2015.

By way of additional background, EDS was approved by Tynwald in October 2015 following a public consultation. The purpose of the Scheme was to attract potential high-growth businesses in need of development finance who could mobilise part of their planned growth in the Isle of Man, creating new jobs and broadening the Island’s business sectors thus providing economic resilience.

Unlike the existing suite of financial support schemes available at the time, the EDS was investment finance through loan and equity-based finance with an external investment management company, Spark Impact, being appointed as Scheme Manager.

In January 2019, the Department for Enterprise took over the administration of the Scheme, after the original (2015) Scheme was revoked and replaced by the Enterprise Development Scheme 2018 (EDS). In April 2022 the Department, with Treasury and Tynwald approval, closed the Scheme for new applications.

Whilst new applicants cannot be accepted, the investment portfolio remains active and continues to be managed by the Department.

1. What safeguards were given for the investment?

An application for funding under the EDS 2015 required the submission of a full business case including investor deck, business details (background, status, current activity levels), management details, funding history, trading history, product evaluation, exit strategy, funding requirements and use of funds together with the source of the balance of any additional funding requirements at the time of the application. The external Scheme Manager would make a full assessment of the application, undertake due diligence and bring forward applications to an appointed investment monitoring committee for consideration.

The investment was made by way of secured loan notes into Lawbit Isle of Man Limited, a wholly owned subsidiary of the two UK parent companies of Lawbit Limited and Lawbriefs Limited. The Department holds Debentures and Share Warrants over the UK Companies. The Debentures can be viewed online through the UK’s Companies House website.

As part of the Investment Agreement entered into, the Company was obligated to provide regular information aligned to its financial performance and management information and notice of its Board meetings. Independent valuations have also been undertaken on a bi-annual basis.

As a secured creditor, the Department is engaged in the relevant process.

Please quote the reference number 4291997 in any future communications.

Your right to request a review

If you are unhappy with this response to your freedom of information request, you may ask us to carry out an internal review of the response, by completing a complaint form and submitting it electronically or by delivery/post.

An electronic version of our complaint form can be found by going to our website at https://services.gov.im/freedom-of-information/Review . If you would like a paper version of our complaint form to be sent to you by post, please contact me and I will be happy to arrange for this. Your review request should explain why you are dissatisfied with this response, and should be made as soon as practicable. We will respond as soon as the review has been concluded.

If you are not satisfied with the result of the review, you then have the right to appeal to the Information Commissioner for a decision on; 1. Whether we have responded to your request for information in accordance with Part 2 of the Freedom of Information Act 2015; or 2. Whether we are justified in refusing to give you the information requested.
In response to an application for review, the Information Commissioner may, at any time, attempt to resolve a matter by negotiation, conciliation, mediation or another form of alternative dispute resolution and will have regard to any outcome of this in making any subsequent decision. More detailed information on your right to a review can be found on the Information Commissioner’s website at www.inforights.im. Should you have any queries concerning this letter, please do not hesitate to contact me. Further information about freedom of information requests can be found at www.gov.im/foi.

I will now close your request as of this date.

This response took one hour to complete.