MJS / Colarb Capital in the Evening Standard: CEO Shaun Prince claims “all our investors are fine”, calls them liars and blames them for investing

MJS Capital and Colarb Capital logos

Troubled unregulated bond issuer MJS Capital was the subject of an article in the Evening Standard on Wednesday.

The article focuses on the worries of a handful of investors who loaned money to MJS Capital via its bonds, have not received interest on time, and have attempted to redeem their bonds. Some have succeeded in redeeming their bonds after a long delay, others are still waiting to receive their money.

Such complaints will be familiar to anyone who has read the comments section of our original review or related articles.

CEO Shaun Prince claims that some of these investors are lying about being MJS Capital investors. The investors in question provided documentation to the Evening Standard proving they are in fact investors.

When confronted by his customers’ complaints, Prince said some investors would “lie through their teeth” when it came to getting their money back and asked: “How do you know they’re real investors?” The investors deny they’re lying, and some sent the Evening Standard supporting documentation to their case.

Prince also claims that investors are being unreasonable for wanting to redeem their bonds early. The Evening Standard notes that MJS’ own literature says that early withdrawals are allowed subject to 30 days’ notice and a penalty. In at least some cases, even this shouldn’t be necessary, because MJS Capital’s original investment terms & conditions makes it clear that if a “Default Event” occurs, which includes the late payment of interest, the bonds become “immediately repayable at par”. No penalty, no notice period.

This distinction is largely moot because Prince has admitted to the Evening Standard that MJS Capital is not currently able to repay the bonds anyway.

Prince said that was subject to the company being able to repay it.

Nonetheless, I fail to see how investors are being unreasonable by wanting to stick to the terms under which they handed their money over.

Banking issues continue

MJS Capital is sticking to the story that the failure to pay interest and redemptions on time is a result of MJS falling foul of their banks’ anti-money-laundering rules, which in turn is due to the former presence of Liberal Democrat peer Lord Razzall on their board, plus “a payment from a wealthy client with a Middle East bank account”.

It is now eight months after Lord Razzall resigned from the board in an attempt to resolve these issues.

Prince has blamed the investors for their situation, saying that if they weren’t sophisticated investors they shouldn’t have invested in the bonds in the first place.

He blamed brokers for introducing naive investors into the scheme, saying it was made clear in the documentation that the bonds were only for sophisticated investors. “Why are investors self-certificating as sophisticated investors?” he asked. “That’s the real question here.”

Prince’s attempt to blame the victims of MJS’ banking issues ignores the fact that under UK regulations, unregulated companies which rely on the “sophisticated investor” exemptions to offer investment securities without being regulated, are responsible for making sure their investors do actually qualify as sophisticated.

FCA Handbook COBS 4.12.11

A firm which wishes to rely on any of the self-certified sophisticated investor exemptions (see Part II of the Schedule to the Promotion of Collective Investment Schemes Order, Part II of Schedule 5 to the Financial Promotions Order and COBS 4.12.8 R) should have regard to its duties under the Principles and the client’s best interests rule. In particular, the firm should consider whether the promotion of the non-mainstream pooled investment is in the interests of the client and whether it is fair to make the promotion to that client on the basis of self-certification.

For example, it is unlikely to be appropriate for a firm to make a promotion under any of the self-certified sophisticated investor exemption without first taking reasonable steps to satisfy itself that the investor does in fact have the requisite experience, knowledge or expertise to understand the risks of the non-mainstream pooled investment in question.

Whether this particular buck can be passed to MJS Capital’s brokers depends on whether leaving it to unregulated introducers (such as Direct Property Investments, who previously promoted MJS Capital’s bonds, and are quoted in the article) can be considered “reasonable steps” in the regulatory sense.

Prince’s last quote in the article is “As far as I am aware all of our investors are fine”. Which given what has gone before is dangerously close to Comical Ali territory.

Another MJS Capital shell company to be dissolved

In other MJS Capital news, another shell company previously used by MJS Capital in an attempt to resolve its banking issues (as disclosed in note 10 of its September 2017 accounts) is to be struck off the register.

This follows at least one (possibly two) other MJS Capital shell company/ies being put into administration / liquidation earlier this year, as covered here a couple of weeks ago.

MJS Cap Ltd director Martin Westney filed the application earlier this month. According to its (unaudited) March 2018 accounts, MJS Cap Ltd was at that point the shelliest of shell companies with no assets other than 4 pounds in share capital. (Although MJS Capital‘s September 2017 accounts said that MJS Cap Ltd held £26,871 in cash on MJS Capital’s behalf – but this was six months earlier.) Its dissolution would therefore seem a formality.

Apparently this particular attempt to resolve MJS Capital’s problems with its banks hasn’t worked.

Shaun Prince claims Bond Review is run by a boiler room in Bournemouth

Neither Shaun Prince nor MJS Capital has attempted to contact this journal directly (nor vice versa), but apparently he is not unaware of our coverage. The Evening Standard’s Jim Armitage tells me that Shaun Prince has got it into his head that Bond Review is run by a boiler room outfit based in Bournemouth.

(For those unfamiliar with these terms, a “boiler room” cold-calls prospective investors to sell them worthless investments. Anyway, back to MJS Capital.)

I think the ludicrousness of this allegation can mostly speak for itself. But for the record, if I was going to run a boiler room outfit, it wouldn’t be in Bournemouth.

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15 thoughts on “MJS / Colarb Capital in the Evening Standard: CEO Shaun Prince claims “all our investors are fine”, calls them liars and blames them for investing

  1. Yes i was happy to speak to Jim, a big thanks for his efforts. I’m in the process of taking Shaun Prince and his band of merry men through the claims court to recoup my capital. Can you believe that he has defended the claim?! If he makes it difficult to get my money back I will never let this rest, I’ll dedicate years to exposing this guy. My next exposé will be via BBC radio and the Financial Times (they have already contacted me). The fall out from Shaun Prince’s arrogance will cost him much more than what he owes me. I’d just pay it back Shaun, Save yourself from the blowback.

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  2. Hello Icmc, What is the basis for his defence in the court? (of the undefendable!). I am considering similar action.
    Thanks

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  3. I am also a very dissatisfied investor. Lots of money that I invested as I trusted Direct Property and the selling of MJS bonds. They are liars and make promises and still no timeline. What now? Already involved my solicitor. Will we ever get our hard earned money back?

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  4. There are no guarantees with this investment.

    MJS has professional indemnity insurance policies which were heavily promoted in its literature, but none of these insurance policies cover the risk that MJS runs out of money.

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  5. I to am an investor my investment plus interest was to go back into my account in October 2018. Have been in touch with people at their office, but they cannot reach Shaun Prince

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  6. After investing my cash with MJS Capital, i only received 4 sets of interest payments, the balance unpaid and when i enquired about having my funds returned or otherwise, I have had absolutely NO answer. Can someone pls tell me what my next steps aught to be, and can anyone recommend a good brief who could help resolve this pls?. Thanks

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  7. Please
    i am greatly distressed by all that I have read & heard.
    Could I be updated specially after Wednesday’s hearing?
    What happens to those who now have no money to take a lawyer, solicitor, advocate etc?
    Do they lose their lump sum, pension & all …?
    Very distraught now.

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  8. You and many many others like you and me. I can only think con artists/scammers and a few other names unprintable on here,

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  9. I have a lawyer looking into my investment with MJS Capital (Colarb) and Direct Property Investments. I, too, am waiting for my request to redeem my bond to be honoured. My lawyer would like to contact anyone who has information about this company and their experiences with it. I have applied to join the Action Group relating to MJS and would like to correspond and share information and developments as they occur. I have also given information to Jim Armitage and to Laura Shannon (who is interested in Sheila Willshere of Direct Property Investments). They all seem to have their fingers in many different jars of treacle. It am hoping it might help those who have not the money to instruct solicitors. Please let me know your thoughts on this.

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  10. I also invested a lot of money in this company mjs/corlab and I have been facing all the issues that you guys have been discussing about this company . I have no time for this arrogant Saun Prince and his cowboys and I have got a law firm to go after them. As we were preparing to take our case to court we heard that a group of investors had already made application to court to liquidate mjs/corlab. The court has granted the investors application and a liquidator has been appointed to recover mjs/corlab assets. So we see how this go.

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  11. HHi all investors!! i asked for my money back by email and got no reply from Mr prince!! seems his allways asleep eh! No answer on his phone!! I put my money through Direct Property too!!! i am retired and it is causing me “Great Stress”!! This arrogant “prince” thinks he’s going to get away with this? that’s when he becomes a “Frog” again!! Living abroad at moment but coming back “Bigtime”!! Paul Stephens

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