Magna Global has defaulted on interest payments to investors and written to investors to say that their loans may not be repaid, according to The Mirror.
The Mirror’s article was based on the story of a couple who invested £950,000 with Magna Global, and are now unable to repay their mortgage.
A year ago, in an update to investors, co-owner Chris Madeline stated “we are extremely happy with the success of our loan notes this year”. This was despite Magna Investments X (aka MIX1) posting a £1 million loss for the year ending June 2019. MIX2 is due to fil accounts by the end of this month.
The same update promoted a new tranche of bonds paying 10% in the first two years and 18% in the third and final year.
Magna Global’s bonds were misleadingly promoted by unregulated introducers claiming they provided “asset backed security”. I reviewed Magna’s bonds in November 2018 and noted that they were in reality inherently high risk.