The head of an island group of companies that lost million of pounds of investors’ money was described in court as a ’sophisticated conman’.

But Dr Alan Louis, chief executive officer of the collapsed Louis Group IoM, said he had been falsely portrayed as a ’monster’.

Total losses of investors’ money in island-based entities in the Louis Group have been put at £50m by the liquidator.

Dr Louis, together with fellow former Louis Group directors John McCauley and Lukas Nakos are facing disqualification in proceedings brought by the regulator, the Financial Services Authority (FSA).

At the start of a civil trial, the court heard that a fourth defendant, Dirk Frederik Mudge, had given a voluntary undertaking of disqualification to the FSA. Three other former directors have previously given similar undertakings.

Mr Nakos, until recently a team leader at the Living Hope Church in Douglas, was described in court by his advocate as a whistleblower who had raised concerns about Dr Louis. The latter was portrayed in Mr Nakos’ evidence, said Deemster Rosen QC, as a ’sophisticated conman’.

Louis Group IoM was wound up by the high court in 2013. Liquidators stated there was a ’taint of illegality’ across the vast majority of its business in the Isle of Man.

They concluded there had been a substantial loss of investor capital running into tens of millions of pounds with most of the group’s island-based entities being insolvent.

Deemster Rosen described events surrounding Louis Group IoM as a ’debacle’.

Charles Davies, for the FSA, told the court that the Louis Group companies could be viewed as a solar system, with BVI-incorporated Louis Group SP Investments (LGSP) at its centre.

The role of another company in the group, Louis Group Structured Capital, was to take loans. It was supposed to lend to parties who had been vetted carefully but in fact almost all the invested money simply went to LGSP, which was potentially insolvent from the very first, the FSA claims.

Mr Davies said the funds that came into LGSP were paid out in ’all sorts of different directions’.

It wasn’t clear in many cases where all the money went - some went to the Louis Family Foundation, something like £8m went to Dr Louis and some went to Louis Group Europe.

Mr Davies said some £25m had been directly invested in LGSP, of which the deficit was about 80%.

He said a major criticism was that the offer documentation for investors wasn’t complied with.

Transactions were not documented contemporaneously, there was a lack of security and there was no advance board approval.

Mr Davies said a second very important theme was the controlling influence of Dr Louis over all these companies. ’There is a pervasive sense that everybody appears to be subject to the dominance of Dr Louis.’

Dr Louis, who is representing himself at the disqualification hearing, said the FSA had been unfair and treated him ’despicably’.

He said the family business had been going 99 years and he had been involved in the group for 31 years.

The fund had a 100% success rate for 20 years before operations began in the island in 2002.

’It’s only in the Isle of Man where I am seen as a monster,’ he said.

’I’m grateful for the opportunity to stand up in court and testify that we are not monsters.

’The allegation against myself and my family is that somehow we fell out of the tree, we didn’t know what we were doing. It wasn’t the case that I came to the Isle of Man without any experience.’

He described the FSA’s allegations of funds flowing from one company to the next as ’deeply flawed’.

’I didn’t see any illegal or untoward actions by my staff,’ he said. ’This is a maths calculation. It’s my duty to bring us back to the maths to see if we have a family who knew what we were doing.’

Dr Louis insisted the companies had been solvent but problems came with the financial crisis of 2008. The Louis Group effectively stopped its operations in the Isle of Man the following year, he said, 32 months before the ’attack’ on the companies by the Manx authorities.

He said he never once made a payment himself and didn’t have the authority to sign documents, which was all done through the administrative office of Louis Group IoM. ’You accept you may have given instructions?’ asked the Deemster. ’Certainly,’ he replied.

Advocate Alan Gough, representing Mr Nakos, said his client had been the whistleblower who had raised concerns about Louis Group operations in the island when he returned from secondment in Switzerland in 2007.

’He was the very person who challenged Dr Louis about what was going on,’ said Mr Gough. ’There are no major defaults caused by Mr Nakos who was in Switzerland for much of the time. He came back to find a mess. He started to drill into it and was met with a brick wall. In May 2008 he gave up and resigned.’

Mr Gough said his client had lost his job twice - first with the Louis Group and then with the new venture he set up whose board were concerned at the fall-out of the pending disqualification hearing and asked him to go.

Mr Nakos now has limited resources, the court was told, and is working in South Africa for the church for free.

Mr McCauley chose not to cross examine liquidator Gordon Wilson.

The hearing continues.