Cauta Capital, whose bonds paying 7-9% per year were reviewed here in January 2018, has published its accounts for the year ending in April 2019.
As in last year the accounts were unaudited and limited information is available, due to Cauta making use of small company exemptions. Creditors were reported to have increased from £6.8 million to £8.7 million.
When reviewing Cauta’s 2018 accounts I noted that £70 million in “investments”, described as “listed shares” had been parachuted into the company seemingly from nowhere (certainly it had little to do with the bondholders’ money). Originally as a £40 million injection in 2016 which was then revalued dramatically upwards over the next two years.
Somehow, from April 2018 to April 2019 this £69,949,449 in listed shares has remained exactly the same at £69,949,449. Despite the fact that listed shares will by nature fluctuate considerably in value.
I don’t have the evidence to suggest that £69,949,449 is a made-up number, even though it certainly looks like it was produced by hammering 4 and 9 a few times and calling it a day. But claiming that the company owned £70 million in shares despite raising only £7 million from investors was a glaring inconsistency twelve months ago (if it had that kind of money, then why bother raising £7 million from investors and paying 25% in commission to do so?) and now it’s an even bigger one.
When I last reviewed the accounts in early 2019, Cauta was promoting itself with 24 paid search terms, of which the top 5 were all in the French language. Its promotional activity has reduced considerably; according to Similarweb it now only receives traffic from one paid search term, again in French. (For “buy government bonds”, despite Cauta not being a government entity.)
Reading Cauta’s website it’s like the failure of LCF never happened; their website, which continues to promote its unregulated bonds directly to the public, is full of misleading rubbish like “This rate is fixed for the term of the bond giving investors peace of mind their future is secure” and “We pride ourselves on offering our investors the maximum protection” that fails to make clear the high-risk nature of their unregulated bonds.
Jade State Wealth is the Security Trustee for Cauta’s bonds, which performs the same role for a number of other UK-based unregulated investments.