THE appointment of a liquidator to Taylor Asset Managers ends a week of speculation about the company's future.

Although the exact situation regarding clients' funds will not become clear for some days, at least £1.5 million has disappeared, the Departmental investigator found with several investors having loss substantial amounts of money. Sources believe the final total will exceed £3.5 million.

Last Tuesday, The Irish Times first reported that complaints had been lodged with the Irish Brokers' Association regarding Taylor Asset Managers and Mr Taylor. The company manages around £50 million of client funds.

The same day it was learned that Fidelity Investments, the giant US financial group, had severed its links with the company. However, Mr Taylor had not informed staff of this.

The group's investment manager, Mr Graham O'Neill, said although Mr Taylor had informed the staff of some changes in the relationship with Fidelity, the first he heard of all links being severed was when he was contacted by The Irish Times.

Mr Taylor's company is thought to have had about £30 million in funds under management with Fidelity.

Some sources now say that Mr Taylor sought to move some of this money into a nominee account which he would have access following the change of relationship with Fidelity. However, this did not happen.

Learning of investor complaints, the Department of Enterprise and Employment, which regulates the investment intermediary sector, appointed an "authorised officer" to the company.

The authorised officer was appointed at the end of July on foot of complaints from investors about getting information about their investments. Worried investors began to besiege the company's Clyde Road offices in Dublin.

Their fears turned out to be correct. Yesterday, the High Court was told that the Department's authorised officer had found that Taylor Asset Managers was insolvent, funds - in excess of £1.5 million were missing and client files had been deleted at the behest of Mr Taylor.

The clients who lost money are those who dealt personally with Mr Taylor. Many clients signed documents effectively allowing Mr Taylor to do what he liked with their funds. Funds on deposit on behalf of investors were also at risk.

However, money invested through the normal operations of the company in international funds is safe.

Several court cases are currently pending against Mr Taylor and one source says that, earlier this year, he paid a substantial six figure sum to one investor. This related to money which the investor contended was not managed properly during the turbulent stock market period of the late 1980s. It is unlikely that the outstanding cases will now proceed, given Mr Taylor's disappearance.

There is no statutory compensation fund for such investors under current legislation, although investment intermediaries must provide a bond of £50,000.

This provides some form of vetting hut, as one industry figure said, even if there was a compensation fund, how could you compensate someone who had lost £1 million?