Investors in the failed finance firm London Capital & Finance (LCF) may receive at least some of their money back.

Thousands of investors put their savings into the firm, which was based in Eridge Park, Tunbridge Wells, lured by the promise of an 8% fixed-rate return on a three-year bond.

But the firm collapsed in January 2019, owing around £237 million.

Only a small minority of the estimated 11,500 investors had previously received any compensation from the Financial Services Compensation Scheme as most of the investments were of a type that didn't qualify.

But an independent report published in December by the judge Dame Elizabeth Gloster criticised the Financial Conduct Authority for failing to "effectively supervise and regulate" London Capital and Finance.

Now the government has promised to bring forward legislation that will enable it to compensate the other investors.

It expects to pay a total of around £120m to 8,800 people, but the compensation will be limited to 80% of the investment and to a maximum of £68,000 each.

The governor of the Bank of England, Andrew Bailey, was head of the Financial Conduct Authority at the time and has since apologised to those who lost their savings.

A separate report by the company's administrators, Smith and Williamson, said it had found a number of "highly suspicious transactions" involving a "small group of connected people" which led to large sums of investors' money ending up in their "personal possession or control."

The collapse is being investigated by the Serious Fraud Office, but although five people have been arrested and interviewed, no charges have yet been brought.

London Capital Finance was established in 2012 originally under the name of Sales Aid Finance by Simon Hume-Kendall, a former chairman of the Tunbridge Wells Conservative Party. He had resigned from LCF before its collapse.

He and his wife are being sued for £24m by LCF's liquidators who claim the money was misappropriated.

Mr and Mrs Hume-Kendall have both denied any wrong-doing.

Another company of which Mr Hume-Kendall was a director, London Oil & Gas, based in Church Road, Tunbridge Wells, collapsed shortly after LCF. It went into administration having borrowed £122m from London Capital and Finance.

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