Dolphin Trust (now German Property Group) months late in paying investors, says BBC investigation

The BBC’s You and Yours consumer affairs programme reports that multiple investors in Dolphin Trust (known as Generic Property Group, sorry German Property Group, since April 2019) are months late in receiving the repayment of their capital.

According to the investors who allege late payment, the repayment problems appear to have begun in the second half of 2018.

The investors were sold the Dolphin bonds by salesmen who were being paid commission of up to 20%.

Charity worker Samantha Hields had saved up a pension of £16,000 and, after being made redundant, was given an offer she could not refuse.

A salesman called her out of the blue and told her she could boost her savings by lending the money, securely, to a company redeveloping listed German buildings into luxury flats.

“He said it would double my money, and my money would be safe, as long as I was happy to invest it for five years,” she says.

She was expecting the money to be paid back to her in September last year. So far, she says she has not seen a penny and has not been given any information about what has happened to it.

The BBC also alleges that work has not started on some of Dolphin’s buildings despite Dolphin having owned them for many years. Dolphin intends to fund returns to investors (and its high commission levels) by redeveloping German buildings.

Visits to those buildings by Anna Kluehspies, a reporter from the German public broadcaster BR, found that although one was finished, and another was near completion, no work had been started on the rest, despite them being owned by GPG for more than five years.

Separately, another property not on the list of those supposedly in Project 80, a Bavarian monastery, was purchased by Dolphin in 2017 for €1m is located in Schonthal, a rural village close to the border with the Czech Republic.

The mayor of the town, Ludwig Wallinger, told Radio 4 he was disappointed with the lack of engagement he has had from Dolphin since it took it on.

“Strangely, Dolphin never came to look at this building before they paid for it,” he says.

“The last time I heard from anyone was in spring 2018, when they asked me what I thought they could do with it.

“They suggested perhaps luxury apartments, to which I laughed, because this area just does not have the market for upmarket flats.”

Dolphin states that 20% of its investors are affected by the delays. It also states that it now pays a lower rate of commission.

GPG responded to You & Yours’ investigation saying that the investors’ money is safe. Investors’ capital is not at risk, because it is secured against property on the German Land Register, it says.

It says only 20% of its customers are affected by delays on projects, which have been caused by various issues with planning and construction work.

Addresses are not always provided to investors, it adds, because that information is not always relevant. However it says it does plan to provide customers with addresses in the future.

It adds that there is no legal obligation to inform loan customers if funds are reallocated to new properties.

Dolphin says it is currently involved in real estate investments of 60 properties. There are currently delays in 10, they say for the other 50 everyone will get their money back on time.

GPG also says introducers are now paid a lower rate of commission.

In February 2019 – in other words, months after the investors in the BBC article allege they were due to be paid back and weren’t – a number of former Dolphin Trust staff formed Grounds Investments plc.

Dolphin CEO Charles Smethurst, CFO Thomas Prax, and director Christopher Moss, have all either served as directors or have held shareholdings (direct or indirect) in Grounds.

Like Dolphin, Grounds Investments plc invests in German property.

Grounds Investments plc is itself not regulated by the FCA, but offers an ISA product via Nicola Horlick’s Money & Co, which is.

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10 thoughts on “Dolphin Trust (now German Property Group) months late in paying investors, says BBC investigation

  1. Christopher Moss seems to be a director of “Money & Co Portfolio Limited” with Horlick and registered at the Grounds address , a very busy man he must be !!!?

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  2. Might be worth checking the facts, such a deluded reporter and did not check the facts from the Mayor and his political reasoning and actually what he has done.

    The client mentioned owns a major aviation business so i would think she knew the risk as googled her…. has she been repaid???

    I went to Germany and saw the properties INCLUDING the one i am securitised against, i saw the security document, i listened to the reason for delays and as a responsible investor i totally disagree with the BBC and its leftwing views in sensationalising. I told them they were wrong before the programme went out but my statement was also ignored.

    property can be delayed.

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  3. Wow! Kudos for going to that level of effort to check out your investment… How much of your returns has that trip wiped out?

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  4. such a deluded reporter and did not check the facts from the Mayor and his political reasoning and actually what he has done.

    Whether Schönthal has a market for luxury flats or not only becomes a fact at the point Dolphin Trust has successfully built them, sold them and repaid investors. Until then it’s speculation.

    The client mentioned owns a major aviation business so i would think she knew the risk as googled her…. has she been repaid???

    Maybe she did and maybe she didn’t. Owning an aviation business does not make you an expert on business lending any more than being a banker makes you an expert on flying planes.

    property can be delayed.

    But these are reported as being five-year loan notes, not open-ended investments, in which case the redemption date can’t be delayed unilaterally.

    However if investors don’t want to enforce their right to repayment, das ist eine freie Land.

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  5. invested for 5 years in a sipp pension. should have paid up in march. dolphin trust now have a uk pr office who are very reassuring and urge a little more patience.

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  6. I’ve got a 5 year investment with Dolphin, was due a yield last October and another again in April this year and to date have still not been paid, almost as worrying is the total lack of communication or information from Dolphin.

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  7. I have invested with Dolphin a few times and been repaid. I knew brokers earned high commissions, but so what if I also received between 10 – 13 % per annum?

    I have also been out to Berlin and Leipzig to see their properties and spoken to tenants who now live in some of them.

    I have also met with their head lawyer and understood the end to end business model Charles Smethurst developed, to attract end sales from German taxpayers, and am assured this is not a scam business like the sensationalist news reports it to be.

    It is not like LCF for example, and there is a very real risk that poor reporting puts all non-regulated loans in the UK in the same boat.

    Lending is a great way to improve your returns and – with good due diligence and some asset security – is no more risky than equities (which is what most of the public choose to speculate in).
    Wish people would look at the facts, before jumping on the bandwagon.

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  8. I have invested with Dolphin a few times and been repaid. I knew brokers earned high commissions, but so what if I also received between 10 – 13 % per annum?

    If Dolphin Trust is indeed able to generate consistent 16% per year returns (to turn £80 into £165 in five years) from renovating East German properties, then bully for you.

    I have also been out to Berlin and Leipzig to see their properties and spoken to tenants who now live in some of them.

    Looking at buildings and talking to some dude who lives in a flat is not due diligence.

    Lending is a great way to improve your returns and – with good due diligence and some asset security – is no more risky than equities (which is what most of the public choose to speculate in).

    Since we’re both keen on due diligence, when you flew out to Berlin and Leipzig, what impression did you get when you and your advisers inspected Dolphin Trust’s up-to-date independently audited accounts, asset valuations and future cashflow models?

    Wish people would look at the facts, before jumping on the bandwagon.

    Feel free to point out any facts that have been omitted by either the BBC or myself. The facts are that Dolphin is defaulting on its 5 year loans for “a limited number of investors” by not repaying their capital at the agreed time, something it has itself admitted and apologised for in a letter to its introducers. The fact that you have been paid on time (so far?) doesn’t change that.

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  9. I suspect that some posters here are from Dolphin trust . In 2014 there was a regulated broker in Ireland who visited the the company and sites . I was told they were looking to have the company regulated by the Central Bank and she was impressed by the visit .Dolphin Trust have no office in Ireland and is not regulated .

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