Author: Phoenix

Pardus uses accounting date trick to delay filing accounts

Pardus bond logo
~ Phoenix ~ 3 Comments

Pardus Fixed Income Bond Company plc has delayed filing its first set of accounts for a second time in succession.

Pardus’ last accounts were filed as a dormant company. As a PLC, its first accounts as an active company should have been filed nine months after the accounting date of January 2020, under the time limits specified in the Companies Act. That nine months already includes a three month extension granted by the Government due to Covid.

Instead, Pardus used a trick whereby it reduced its accounting period by a single day, which under the letter of the law grants it an extra three months to file its accounts. It has now repeated the trick, giving it another three months until the end of April 2021 (15 months after the last accounting period ended).

Pardus’ associated company, GRMA-Pardus Wealth Limited, is up to date with its accounts. Its last accounts for April 2020 claimed £39m in net assets with £103m in gross assets and £64m in liabilities, but the accounts were unaudited so are worthless for due diligence purposes without further verification. The accounts showed little other information and how much of those liabilities relate to Pardus investors is not clear.

Unregulated “boutique investment house” Meredith Charles, which states that it has “had a direct involvement in financially engineering Pardus Fixed Income Bond” and that it pays “generous commissions” for introducers who sell it, claims on its website that Pardus “significantly outperforms other fixed-rate offerings”.

Due to its inability to file accounts in a timely fashion, it is impossible in reality to verify how well Pardus is performing, or how much money is at stake.

Pardus, run by former bicycle salesman Greg Bryce, offers bonds paying 1% per month / 12% per year (2%pm / 24%pa via some introducers).

We review Marshbell’s investment paying 13.5% per year

Marshbell logo
~ Phoenix ~ 8 Comments

At time of writing Marshbell offers the following investment terms:

  • Silver: 4.65%pa paid monthly for a 1 year investment
  • Gold: 8.4%pa paid monthly for a 2 year investment
  • Platinum: 12.8% paid monthly for a 3 year investment
  • Bronze: 10.2% rolled up and paid at maturity for a 2 year investment

In November 2020 third party introducers for Marshbell were advertising an investment via Facebook and Instagram paying 13.5% per year. Specifics of the investment term were not provided.

Marshbell introducer advert

Third-party introducers for Marshbell claimed via Instagram that Marshbell offers “Full asset protection” and “Zero defaults on loan book”. For more on these claims see below.

Who are Marshbell?

No details of who is behind Marshbell are disclosed on their website.

Companies House shows that Marshbell is owned by director Stewart Paterson.

I wasn’t able to find any history for Paterson. There’s a Stewart Paterson with the same month and year of birth in the investment (and male modelling) industry, but there’s no mention of Marshbell on his LinkedIn and I wasn’t able to find confirmation they are the same person. (Marshbell’s lack of disclosure on their website doesn’t help.)

Although Marshbell claims to have been “Debt finance specialists since 2016”, and the company was indeed incorporated that year, Marshbell’s accounts show that it was dormant until some point between October 2017 and 2018. Moreover, Paterson only took over the company in January 2020. Prior to that the company was wholly owned by a David Shapiro until January 2020 and a Ceri John until November 2018.

Those October 2018 accounts show that the company took in about £6 million of capital in the previous year and little else. They were unaudited and are therefore worthless for due diligence purposes without independent verification.

How safe is the investment?

Third-party introducers for Marshbell claim their investments offer “Full asset protection” and they have had “Zero defaults on loan book”. Marshbell itself claims on its website to be “Fully secured”.

Nonetheless, like any unregulated investment which previously paid 13.5% per year, this is an inherently high risk investment with an inherent risk of total loss.

Marshbell having “zero defaults” to date does not change this, especially given its young age.

Marshbell’s website states “Marshbell Group would preferably deploy capital on a joint venture basis with an existing business, targeting an annual return of 8% net, after paying all investors that may have subscribed via Marshbell’s investment instruments.”

Given this requires it to target an return of at least 21.5% per year (8% + 13.5% plus Marshbell’s other costs) it will need to lend to high risk borrowers willing to pay such interest rates.

Secured lending is not risk-free as there is a risk that if the underlying borrower defaults, the security cannot be sold for enough to cover the loan.

Investors in asset-backed loans have been known to lose 100% of their money when it turned out that there were not enough assets left to pay investors after paying the insolvency administrator (who always stands first in the queue).

This is not in any sense to imply that the same will happen to investors in Marshbell, only illustrating the risk that is inherent in any loan note even when it is a secured loan.

If investors plan to rely on this security, it is essential that they hire professional due diligence specialists (working for themselves, not Marshbell) to confirm that in the event of a default, the assets of Marshbell would be valuable and liquid enough to compensate all investors. Investors should not simply rely on what Marshbell tells them about their assets.

The dramatic difference between the different investment terms is cause for concern. Normally you would expect to see a percent or two difference between investment terms. It is not clear why the chance of Marshbell failing in year 3 so much higher than the chance of it failing in year 1 that it needs to offer a whole 8% more in annual interest.

Should I invest in Marshbell?

This blog does not give financial advice. The following are statements of publicly available facts or widely accepted investment principles, not a personalised recommendation. Investors should consult a regulated independent financial adviser if they are in any doubt.

As with any investment in an unlisted micro-cap company, this investment is only suitable for sophisticated and/or high net worth investors who have a substantial existing portfolio and are prepared to risk 100% loss of their money.

Any investment offering returns of up to 12.8% per year is inherently high risk. As an individual, illiquid security with a risk of total and permanent loss, Marshbell’s loan notes are much higher risk than a mainstream diversified stockmarket fund.

Before investing investors should ask themselves:

  • How would I feel if the investment defaulted and I lost 100% of my money?
  • Do I have a sufficiently large portfolio that the loss of 100% of my investment would not damage me financially?
  • Have I conducted due diligence to ensure the “asset security” can be relied on?

If you are looking for a “protected” investment, you should not invest in loans to unregulated companies with a risk of 100% loss.

Quinshaw Finance collapses, liquidators appointed

Quinshaw Finance logo
~ Phoenix ~ 6 Comments

Liquidators have been appointed to Quinshaw Finance, whose bonds were reviewed here in September 2019.

Quinshaw claimed to offer “secure property high yield bonds” and that “investor protection is our number 1 priority”.

Posts to reviews.co.uk suggest the scheme stopped paying investors around the middle of 2020. Prior to collapsing Quinshaw had over 120 universally positive reviews.

After it collapsed a company calling itself “GDS Consulting” claimed to have been appointed as liquidators and ran a recovery scam on Quinshaw’s victims. It is likely that “GDS Consulting” was in reality someone behind, or within Quinshaw who had access to investors’ details.

The new liquidation is likely to be genuine, based on the filing with Companies House.

Quinshaw was supposedly run by a Paul Hopeton Daye but I have seen no evidence he actually exists. Companies House runs no meaningful checks on those who open UK limited companies.

How do I get my money back from Quinshaw?

Quinshaw’s investor list has already made its way into the hands of recovery scammers, who have contacted investors already knowing about their bonds. Anyone who cold-calls you claiming they can get your money back from Quinshaw or want to buy your bonds is a scammer.

If you were advised to invest in Quinshaw by an FCA-regulated company, you may have recourse to the Financial Ombudsman and Financial Services Compensation Scheme. Unfortunately for investors, as yet I’m not aware that any FCA-regulated companies did promote Quinshaw.

The standard procedure when an unregulated investment goes into administration is to write off the investment and treat any return as a bonus.

Viderium Limited collapses, administrators appointed

~ Phoenix ~ 18 Comments

Cryptocurrency minibond scheme Viderium has collapsed and gone into administration. MHA MacIntyre Hudson LLP have been appointed as administrators.

Viderium raised £3.9 million (as at December 2018) from bonds paying 9.8% per year for a three year term, claiming “A Rated Indemnity Insurance” on the front page of its brochure.

Whether anything has happened to trigger that insurance is unknown, but I wouldn’t bet on it, given that the insurance covered “any Actual or Alleged act, Error, Misstatement, Misleading Statement, Omission, Neglect or Breach of Duty or loss” and running out of money to pay bondholder returns doesn’t fall under any of those things.

At some point before April 2020 Viderium wrote to investors to tell them that they were going to lose some or all of their money, according to an investor review posted on Feefo. Viderium subsequently scrubbed all its Feefo reviews but left a fragment of that review visible on its website.

The company continued posting regurgitated content to its Facebook page until August 2020. Its Twitter page has, like its Feefo page, been scrubbed.

In August 2018 Viderium wasted investors’ money attempting to legally intimidate WordPress into removing my review. Viderium made no attempt to complain to me directly, effectively an admission that it knew its complaint was groundless.

Viderium complained that my review “made a number of false statements, unauthorised financial advisory statements, inflammatory and defamatory statements and remarks”. It failed to point out anything in my review that was inaccurate, which simply noted the inherently high risk nature of Viderium’s bonds. It also inaccurately complained that I had republished “confidential and sensitive documents”, when in fact my review was based on Viderium’s own investment material which it freely supplied to the public on request.

Astonishingly, Viderium’s complaint also claimed that their investors could not lose their money.

[Quoting my review] These investments are unregulated corporate loans and if Viderium defaults you risk losing up to 100% of your money.

[Viderium’s complaint] This is false and misleading information not based upon fact. The publisher has provided incorrect information as advice to the general public.

[Quoting my review] If Viderium fails to make sufficient returns from its cryptocurrency mining… there is a risk that they may default on payments of capital and interest to investors.

[Viderium’s complaint] This is false and incorrect information provided deliberately out of context in order to purposefully provide a negative view of the company and the prospect of investment into the company.

Viderium’s collapse illustrates that I was right and that unregulated corporate loan notes are in fact high risk.

In another complaint to Google, Viderium claimed that its “investment bond is regulated by the Financial Conduct Authority”. This was also false. While Viderium’s literature was approved by Bluewater Capital, the investment itself was unregulated.

L: Ross Archer, Viderium CEO. R: Alexander Johnson, Viderium chairman and 95% shareholder.

Three of Viderium’s leading staff members, Alexander Johnson, Ross Archer and Russell Spratley, divided their time between Viderium and a new venture launched in 2019, Whiskey Cask Company, which claims endorsement from rugby legend Chris Robshaw.

Perhaps trying to run two unregulated investment schemes simultaneously caused Johnson, Archer and co to take their eye off the ball at Viderium. As and when more details are published by the administrators, it’ll be covered here.

[Hat tip to readers Tony and Terry who separately flagged up the administration.]

How do I get my money back from Viderium?

Anyone who cold-calls you claiming they can get your money back from Viderium or want to buy your bonds is a scammer.

If you were advised to invest in Viderium by an FCA-regulated company, you may have recourse to the Financial Ombudsman and Financial Services Compensation Scheme. Unfortunately for investors, as yet I’m not aware that any FCA-regulated companies did promote Viderium.

The standard procedure when an unregulated investment goes into administration is to write off the investment and treat any return as a bonus.

Carlauren administration update: recovery still uncertain for creditors but boat and plane sold

~ Phoenix ~ 11 Comments

The administrators of Carlauren Group have released their latest regular report.

There’s little of interest to report on the realisation of Carlauren’s property assets or hotel business. Nor is there any real further news on the personal bankruptcy of Sean Murray. Murray has had a £40 million asset freezing order imposed (which does not necessarily reflect the value of any assets held by him) but the administrators remain tight-lipped on whether any recoveries are expected from that quarter.

The administrators have managed to sell a private jet, a boat and a car, raising a net amount of £120,000 after accounting for fees and a loan secured on the jet.

While Covid had nothing to do with Carlauren’s collapse, which unravelled in 2019, it has complicated the administration (and not just in the “interminable Zoom meetings” sense).

Carlauren’s jet (tastefully call-signed M-URRY; investors are unlikely to recover the cost of putting a vanity licence plate on a private plane) originally found a buyer for $420k. That fell through when Covid made it impossible to transport the plane to its new owner in Nigeria. The other bidders were mostly interested in breaking the plane up for parts. Eventually the plane was sold for £292,000 but virtually all of this was swallowed up by agents fees of £62k and a secured loan on the aircraft for £217k.

And there you have the administration of a collapsed investment scheme in a nutshell (or a fuselage).

The sale of Carlauren’s boat Adamo – a “luxury motor cruiser” – originally found a bidder for €700k, but they pulled out after an inspection. The pandemic reduced interest in the boat and it was eventually sold for £396k, although port fees and other fees came in at £296k.

It’s not exactly a good time to try to sell a hotel business either.

At least Carlauren’s collapse in 2019 spared its care home residents from living under Carlauren’s management during the Covid pandemic, given the atrocious mess they made of it in old-normal circumstances.

It remains unclear whether any returns will be paid to Carlauren’s investors. Legal costs currently stand at £956,000 and the administrators own fees’ stand at £2 million to date.

FCA gives green light to Concept Capital’s unregulated investment scheme?

Concept Capital logo
~ Phoenix ~ 2 Comments

Last month I reviewed Concept Capital’s unregulated investment scheme which promises investors 10% per year “guaranteed” for investing in static homes.

Last week Concept Capital got in touch and took issue with various parts of the review. The only part on which they provided any significant new information was the section where I’d discussed the risk that Concept Capital could be viewed by the FCA as an unauthorised investment scheme.

While Concept Capital is an FCA-regulated firm (via What Credit Limited), What Credit (and by extension Concept) is only authorised to offer credit broking and debt counselling and not to run collective investment schemes.

The main requirements of a collective investment scheme is that investors have no day-to-day involvement with the investment, and that investors’ money is pooled to pay their returns. Anyone who runs a collective investment scheme in the UK without authorisation to do so from the Financial Conduct Authority is committing a criminal offence.

If Concept Capital’s investors were paid purely the rent from their individual static home, minus Concept Capital’s management costs, it would be unambiguously a non-collective investment and there’d be no issue.

But that’s not the case. Concept Capital are “guaranteeing” to pay all investors 10% of their investment per year, and moreover to buy back their static home after a minimum of two years at the original investment price. (And it’s a certainty they wouldn’t have as many investors without that guarantee.)

This means that if any investor’s particular static home returns less than 10% after all costs, Concept Capital has to make up the difference.

It has no significant source of funds to do so other than investor money. This means investor’s money is pooled to pay its guaranteed returns, and Concept Capital is running a collective investment scheme.

When I pointed this out to CCG, their response was “the 10% return is derived from a waiting list of tenants who are all pre-approved for a minimum of £125 per week. For clarity and accountability, we have a rent guarantee agreement for all clients with a management company.”

This changes precisely nothing. Those tenants are waiting to rent homes funded by Concept Capital investors. If I use investor’s money to build or buy a static home, that asset is still investor money. If I rent that asset out to a tenant, the income from that asset is still investor money. Section 235 of the Financial Services and Markets Act explicitly says that using profit/income derived from one investor to pay another is pooling.

Nonetheless, I still edited that part of the review, because CCG told me that the Financial Conduct Authority investigated them in November 2020 and have taken no further action.

I requested a comment from the FCA. They declined to provide one, stating that they don’t comment on individual companies. The FCA seem to have overlooked that commercial confidentiality ends where Facebook adverts promoting unregulated investment schemes to the public begin.

But in the absence of any comment from the FCA, I have to take Concept Capital’s word for it that the FCA has given them the green light. Indeed, if the FCA’s review in November had found anything amiss, their normal practice would be to at least publish a warning on their register.

So there you have it. Regardless of whether Concept Capital are running a collective investment scheme or not with an “FCA authorised” kitemark, there appears to be no imminent risk that the FCA pulls its finger out. I am happy to set the record straight.

On a related note, Concept Capital were also keen to stress that “Investors are screened to check they fit the criteria to become an investor for us” [i.e. high net worth or sophisticated, with specific definitions of both].

On that I think we can let their Feefo reviews speak for them. Concept Capital certainly seem to think so, judging by assiduous they are at thanking everyone who leaves a review.

Feefo reviews for Concept Capital
Selected Feefo reviews for Concept Capital.

Fortitude’s Ajaz Shah accused of abusing ex with hot iron, under house arrest in Italy

~ Phoenix ~ 3 Comments

Ajaz Shah, owner of the unregulated investment scheme Fortitude Capital, has been arrested in Italy and accused of a vicious campaign of violence and abuse against his ex girlfriend.

As reported by the Daily Mail:

A millionaire City trader has been placed under house arrest in Italy after a court heard he had allegedly beat up his ex-girlfriend and threatened to burn down her home by setting his Lamborghini sports car on fire.

Ajaz Shah Hussain was held by police in the Italian resort town of Rimini after also allegedly threatening to release a sex tape he had made with her, according to authorities.

The married father of two has been told he is now banned by the court from contacting his ex and confined to his flat in Milan.

Shah’s ex has claimed that Shah burnt her with a hot iron as “punishment”, and on another occasion police were called after Shah strangled her and punched her in the face.

Fortitude CEO Ajaz Shah

For his part Shah denied the allegations. He also told the Italian court that the alleged victim was still his mistress, and that his wife is Arabic and tolerates his extra-marital affair.

Fortitude Capital collapsed into administration last July, a couple of years after its bonds were reviewed here. Fortitude is also involved in the MJS Capital collapse; MJS Capital invested £6 million into Fortitude.

As at the administrator’s report in August 2020, Shah is refusing to co-operate with their investigations into the company.

Shah is identified as a “millionaire City trader” by the Daily Mail. The source of Shah’s wealth is unclear. It’s difficult to see how running a company with £7 million of investor assets would generate a million pound fortune.

Buy2letcars group posts 2019 accounts, group now £10.9 million in the red

buy2letcars logo
~ Phoenix ~ 5 Comments

The Buy2Letcars group of companies, consisting of Buy 2 Let Cars Limited (which borrows money from investors promising returns of up to 11% per year), Wheels 4 Sure (which uses the money to lease cars) and Raedex Consortium Limited (parent holding company) have all filed their accounts for the year ending December 2019.

The accounts have been filed using small company exemptions and did not include profit and loss accounts, and were unaudited. They therefore contain limited information.

What little we do know includes that the overall group has continued to lose money (as it did in 2018 and 2017). Raedex Limited shows net liabilities expanding from £9.5 million in 2018 to £10.9 million in 2019, while the “retained profits” line fell from minus £14.1 million to minus £18.1 million (suggesting losses of around £4 million over the year).

The group would be even deeper in red ink if it hadn’t revalued “goodwill” upwards by £2.3 million, an increase of 80% on 2018. This “goodwill” represents “the expected future value of profits derived from existing contracts at the balance sheet date”.

Meanwhile Buy2letcars Limited now has £34.1 million of “other creditors” on its balance sheet, up from £29.5 million in 2018, suggesting that the company has taken in another £4.5 million odd of investor money.

Over the past few months Buy2letcars has exploited the Covid pandemic to promote itself to investors via its Facebook page. Its adverts say that investors can “over a 3 year period earn up to 27% ROI, whilst helping key and essential workers get into brand new vehicles”.

The pandemic isn’t mentioned explicitly in the adverts but we all know where they’re going with “key and essential workers”. From where I’m standing, leasing vehicles to key workers, charging them high enough interest to cover up to 11%pa returns to investors on top of Buy2letcars’ own costs, is a personal business transaction no different from selling a nurse a hamburger. They may need it but it’s not some kind of charitable activity.

Buy2letcars has taken to posting videos from key workers who thank Wheels4sure “and their investors” for leasing them vehicles. In one frankly bizarre example, a car-borrower sits in her car alternately speaking out of the window to the camera and looking down at the script in her lap, like someone who’s been strapped to a wall at a 90 degree angle to a tennis match.

Buy2letcars continues to misleadingly promote itself by comparing returns from its high risk unregulated investment scheme to minimal-risk cash interest rates. The company has run video adverts claiming “protection for every scenario” in voiceover.

In reality, while the information in its accounts is limited, its continuing losses and widening net liabilities demonstrate the inherent risk of investing in unregulated investment schemes, whether or not Buy2letcars goes on to turn itself around and repay investors’ capital and interest in full.

Raedex Consortium is an FCA-regulated company, as it has to be to run its vehicle leasing business. Its collective investment scheme is however unregulated.

Other news in Larry-Cole-land

Buy2letcars’ CEO Reginald Larry-Cole’s other business, “reverse auction” lottery Lifestyle Bids (aka Triple R Lifestyles Limited), shut its doors in April 2020 due to the Covid pandemic (no more luxury holiday prizes).

It’s not all bad news for Larry-Cole though in 2020. Since we last looked, his book “Compassionate Capitalism: How I Turned 150 Nos into 1 YES” has rocketed up the Amazon charts from 981,479th to the heady heights of 373,779th. The book is published by another one of Larry-Cole’s companies, Regnata Dreams Limited, which appears to have made around £100k in 2019 (again we’re relying on the movement in the “retained earnings” line due to the lack of a profit and loss account). Whether this is all book sales isn’t known.

High Street Group sees in New Year with second accounts filing fail

High Street Group logo
~ Phoenix ~ 30 Comments

This article was written by the previous owner of bondreview in January 2021. It is being published because now that High Street GRP Ltd is in administration it will be interesting to see whether or not the prophecies came true. This article is 15 months old so it will obviously have been overtaken by events later in 2021.

Safe Or Scam has written two articles on the High Street GRP Ltd administration on its blog page. 

Jan 2021 Article

On the turn of the year, High Street Group, which had already been overdue with its 2018 accounts by 15 months, fell overdue with its 2019 accounts as well.

Private limited companies must by law file accounts with Companies House nine months after the end of the accounting year. This deadline was temporarily extended to twelve months due to lockdown. High Street Commercial Finance Limited and High Street Grp Limited fell overdue with their December 2018 accounts in September 2019 and are now also overdue with their December 2019 accounts.

The company has repeatedly blamed the pandemic for both failure to repay investors’ money on time and for its failure to file accounts. Why the three month extension given by the Government to all businesses is not enough for High Street Group, and what this has to do with their December 2018 accounts which were overdue months before the pandemic started, has never been fully explained.

The company continues to secure positive coverage from local news outlets and endorsements from government officials, despite its offences against the Companies Act, following the completion of HSG’s Hadrian’s Tower, now the biggest feature on Newcastle’s skyline.

Cllr Ged Bell, Newcastle City Council cabinet member for Employment and Culture, said: “Hadrian’s Tower was incredibly ambitious, but it has set the standard for modern, luxury living in Newcastle and now has pride of place on the city’s increasingly-impressive skyline.

Sarah Green, Chief Executive of NewcastleGateshead Initiative [quango for promoting Newcastle and Gateshead commerce and tourism], said: “Hadrian’s Tower brings luxury accommodation coupled with concierge service to the heart of our city centre. This development demonstrates the quality of life our city can offer and helps position the region as a great place to relocate, as businesses and people re-consider their options post Covid.

“This investment by High Street Group is a signal of confidence in the region’s resilience as we look towards the future and I am sure, when it is safe to do so, there will be many celebrations at the top of Hadrian’s Tower in Newcastle’s first champagne bar at sky level.

Flats in Hadrian’s Tower were already being sold to investors before the ribbon was cut, marketed by property agents as offering “7% net yield guaranteed for 5 years”.