Cauta Capital files accounts; £7 million of creditors, £70 million of investments parachuted in?

Cauta Capital issues unregulated bonds paying 7-11% interest with a 10 year term.

The company has recently filed its accounts for the year ending April 2018. Due to Cauta’s small size, they were unaudited and did not include a profit and loss account.

The accounts show net assets of £70 million, consisting predominantly of £70 million of investments under “Fixed assets” (described later as “a portfolio of listed shares”), a further £7 million of current assets, minus £7 million of creditors (i.e. bondholders). Which seems like a pretty healthy financial position.

The accounts however immediately raise the question; where did this £70 million in investments come from?

This item in the accounts can be traced back to Cauta’s first accounts for April 2016. In this period, the company raised £1.7 million from investors, and according to the director’s report, “The company has invested £1,472,388 and acquired a further £40,032,988 in listed investments”. How exactly it acquired this £40-million-odd in listed shares is not elaborated on; clearly it had little to do with the £1.4 million net invested by bondholders.

In April 2017 this £40 million share portfolio increased to £65 million in value, and then in the latest accounts it increased again to £70 million.

After the April 2016 accounts, the company significantly cut down the level of information provided in its annual accounts; the 2017 and 2018 accounts did not include a director’s report or profit and loss account.

The 2016 accounts disclosed that of £1.7 million raised from investors, £435,000 was paid out as commission (i.e. around a quarter). Subsequent accounts have not disclosed how commission was paid for further fundraising.

The £70 million listed share portfolio is clearly of paramount importance to Cauta Capital’s financial health. In fact it rather raises the question: if Cauta Capital was able to get c. £40 million of capital injected into it from outside in its first year of trading, why bother raising £1.7 million from the investing public at all?

Cauta Capital is currently being promoted in the French market. According to analytics from similarweb.com, Cauta receives 85% of its search traffic from a total of 24 paid keyword searches, of which the top 5 are French terms which translate as “property investment”, “invest without money”, “stockmarket trading opportunity”, “investment in graphene” and “investment in forestry”.

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