Izodia, the controversial cash shell whose antics have infuriated leading institutional shareholders, has caved in to pressure and performed a U-turn by offering to return cash to investors.

Earlier this week Financial News revealed that Gerald Smith, who is connected with Orb, a Jersey company backed by property investors which dominates Izodia's affairs, had served a prison sentence and had also been criticised by Department of Trade inspectors for his behaviour in a separate business involvement.