A crucial court date looms on Monday 25th as stricken Park First investors decide whether to appoint Park First’s own choice of administrators, Smith & Williamson, or rivals Quantuma LLP, proposed by an investor group and US investigators Safe or Scam.
A reminder of where we stand at the moment:
Back when the FCA shut down Park First as an illegal collective investment scheme, £33m of assets were ringfenced by the FCA to meet repayments to investors.
Smith & Williamson claimed that this sum would only be available to investors if they voted to appoint Smith & Williamson, otherwise Park First would withdraw it, and investors would risk getting nothing.
#TeamQuantuma claimed that this was false, and that the FCA had confirmed to Quantuma that the £33m was still ringfenced for investors regardless of which administrator they appointed.
Team Quantuma further claimed that the proposal to appoint Smith & Williamson in a Company Voluntary Arrangement amounted to allowing Park First to remain in charge of the business, writing off £115m owed by Park First group companies to the companies who owe investors money, and signing away their right to take action against the directors.
Smith & Williamson did not respond to my request for comment back in mid-October on whether their claim that investors had to appoint them to be sure of the £33m was “erroneous”. Nor has there been an update on their Park First minisite since 3 October. So make of that what you will.
According to Safe or Scam LLP, an 11th hour update from Smith & Williamson yesterday finally admitted that the £33m was not contingent on investors accepting S&W proposals, but said that Group First could still attempt to block payment if it didn’t get its way over the choice of administrator, which Safe or Scam LLP describe as “scaremongering”.
Quantuma of Solace
Quantuma’s efforts to persuade investors to give it the job (which is likely to be highly lucrative to either S&W or Quantuma, however much remains in the pot) have been stymied by S&W refusing to grant them access to investors’ contact details.
According to Team Quantuma, Group First has been telephoning all investors to try and find out how they will be voting on the 25th November.
Quantuma applied to the court for investors’ contact details so that they could put their own case, but S&W objected.
S&W say, hilariously, that allowing Quantuma to contact investors directly would put investors at risk of being targeted by scammers.
Hilarious because Park First have already been relentlessly targeted by scammers, using silly names like Herschel Escrow and Everton Rose, for months. These scammers generally claim that they know a Chinese investor who wants to buy your parking space for a huge sum, but first you have to put £7,500 in escrow / legal fees / blah blah / and now that money’s gone as well.
The important thing to note here is that Park First investors have confirmed in large numbers that the scammers did not just have their contact details, but knew that they owned a Park First car parking space.
That can’t happen without a major breach of General Data Protection Regulation on Park First’s part. How it managed to let part or all of its investor list fall into the hands of recovery scammers is beside the point (and will hopefully be fully investigated).
For its favoured administrators say that investors can’t speak to a rival in case they get targeted by scammers who already have their details, thanks to the lax GDPR compliance of the people who chose them, is a bit rich.
(Note well here that it does not matter from a data protection perspective whether scammers got hold of Park First investor details through incompetence, a rogue employee or something else. A breach is a breach, including one due to lax security and poor controls.)
The outcome is that the court did a Solomon and gave Quantuma only investors’ names and addresses. As 50% of Park First investors are reportedly in far-flung places like Russia, China and Malaysia, most of them will not receive postal correspondence in time for the 25th.
Team Quantuma has contacted 324 investors via a Facebook group, but this is of no help to victims in China as Facebook is banned there.
As Group First has had no compunction about ringing round investors to influence their vote, it is a bit like if the Tories were using the Government’s own databases to ring round the entire electorate and persuade them how to vote, but refusing to allow Labour to see the same list because “nah it’s data protection innit”.
Decision time
I am not going to tell investors to vote either way, and have no dog in this fight.
With so much money at stake, however, it is crucial that investors can make an informed decision. With that in mind, investors should read the updates from Smith & Williamson and the counterclaims by Quantuma’s advocates carefully.
If Park First’s own choice of administrators, Smith & Williamson, are appointed, the first job they have is to persuade creditors that they are acting in their interests and not those of the people who appointed them. S&W are a well-established firm and I have no doubt that they will comply with their legal duties to act in creditors’ interests, but that is not the same thing as winning creditors’ confidence; justice must also be seen to be done.
It would be a shame if their first step was to make their appointment look like a stitch-up.
There’s another view on this topic here https://pension-life.com/park-first/ and although the article claims to be “entirely neutral on this issue”, my reading of it at least, presents a biased spin in favour of the S&W option.
Well, the diagram, which claims that under Administration “Whittaker pays £33m” and under Liquidation “Whittaker pays £0” is false according to the information discussed above, and now seemingly confirmed by S&W.
The £33m is not Whittaker’s money in any case. It was Park First money that was ringfenced by the FCA when they shut down its illegal collective investment scheme.
I also have to address this paragraph, from Angie’s previous article: https://pension-life.com/a-tale-of-two-investments/
The idea that Park First could not fail unless the airports shut down or something to do with magic cars is, to put it kindly, absolute nonsense.
Park First would have failed, as Store First did before it, if it failed to generate sufficient earnings to pay its investors the “guaranteed” 8% per year after all costs including commission paid to introducers for sourcing investment and whatever the owner Toby Whittaker was paying himself to run it.
However, the quality of Park First’s business plan is in any case irrelevant as Park First was an illegal collective investment scheme, as Capital Alternatives et al were before it. Which is why it was shut down.
It doesn’t matter if you’ve invented a perpetual motion machine that’s guaranteed to generate billions in revenue, you can’t build an illegal collective investment scheme around it and promote it directly to investors in the UK.