The administrators of collapsed West Ham sponsor Basset and Gold have released their initial report.
Around 1,800 people, described as "everyday investors" by the administrators, invested nearly £36 million into Basset & Gold after being recruited by "internet based marketing and social media campaigns".
Despite Basset & Gold's literature claiming that investments were "backed by assets, such as property, corporate debentures and other forms of security in order to PROTECT our investments and your capital", virtually all of investors' money was loaned to a payday lender called Uncle Buck.
After being denied compensation from the Financial Services Compensation Scheme (other than a tiny handful of exceptions,) London Capital & Finance investors have raised money via crowdfunding to launch a judicial review.
As at 23rd April the campaign had already raised £7,833, exceeding its initial £7,000 target. Technically the campaign is to fund the judicial challenges of only the four LCF investors on the creditors' committee, but if their challenges succeed, this will set a precedent for the rest.
London Capital & Finance investors have been both emboldened and enraged by the FSCS' early indications that it will bail out investors in fellow collapsed minibond scheme Basset & Gold, which went into administration on 1 April.
A couple of weeks ago West Ham sponsor Basset & Gold (reviewed here in December 2017) collapsed into administration.
So far so normal. Unregulated high risk investment fails, news at 11.
What was unusual about Basset & Gold is that back in 2018 at least, they were promoting their bonds while explicitly holding out that investors might be compensated by the FSCS if things went sour – on the basis of misselling.
Basset & Gold, which offered unregulated bonds, "pensioner bonds" and 30-day "cash bond" notice accounts, announced today that it has gone into administration.
[Hat tip to reader John Doe for spotting the announcement.]
As at its last accounts for September 2018, the company had raised £30 million from investors.
Basset & Gold has filed its accounts for the year ending September 2018.
Basset & Gold is now one of the UK's most visible issuers of unregulated bonds, thanks to its sponsorship of Premier League football team West Ham United.
It currently offers a one-year "Fixed Monthly Income Pensioner Bond" paying 4.24% over the year a 3-year IFISA paying 6.12% per year, and a 5-year IFISA paying 8.15%. All are capital at risk investments that, like any loan to a micro-cap unlisted company, have a risk of up to 100% loss.
According to its accounts, it now owes just under £30 million to investors, up from £13 million in 2017.
Its net assets position is slightly above water at £233,784.
Basset & Gold offers unregulated corporate bonds paying up to 7.46% per annum for bonds paying monthly income for a term of up to 5 years, 4.32%pa on 1-year “pensioner bonds” and 3.14% on “cash bonds” which pay interest bi-annually and are redeemable by giving 30 days’ notice.
Continue reading for a review of the Basset Gold fixed interest bonds.