THE COMPANY run by two of the British businessmen whose small aircraft disappeared last week off Brazil is teetering on the brink of administration.

Diamond Lifestyle Holdings, a sub-prime mortgage broker, has been trying to find new sources of funding for months.

The firm’s existing arrangements with Clydesdale Bank have been strained by the collapse of the mortgage market, which has hammered Diamond’s commission income.

Talks with one prospective backer broke down last month. Attempts to find other sources of funding have proved fruitless, according to sources close to the company.

The disappearance of Alan Kempson, the company’s managing director, and Nigel Hodges, the finance director, is thought to have eliminated any remaining hope of a deal.

The two men were on board a Cessna 310 aircraft that disappeared nine minutes before it was due to land at the Brazilian city of Ilheus last weekend. Two other British businessmen, Sean Woodhall and Ricky Every, were also on the plane.

Brazilian authorities called off their search for the four businessmen and the pilot and co-pilot of their plane on Friday.

The four passengers had invested in a luxury property development close to the city.

Kempson owns 42% of Diamond Lifestyle, which joined the Alternative Investment Market in 2006 after a reverse takeover of Enterprise North, a cash shell that had previously owned engineering assets.

Diamond borrowed £2.5m from Clydesdale on a five-year deal at the time.

The admission documents disclose that the company’s trading

activities were “dependent on the retention of key personnel with the relevant experience, expertise and reputation, in particular that of Alan Kempson”. The company took out “key man” insurance for Kempson.

Sources close to the group confirmed that “administration is clearly an option”. A statement on the financial position is expected later this week.

Diamond’s shares were suspended on April 29 in light of its financial difficulties.

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