The CEO of the brokerage arm of Shinhan Financial Group, one of South Korea's largest banks, has stepped down in an ongoing scandal partly involving the funnelling of investors' money into Dolphin Trust (aka German Property Group).
Shinhan funnelled $306 million into Dolphin Trust via derivatives, according to The Korea Herald.
Troubled German property scheme Dolphin Trust (now known as German Property Group) has frozen payments to investors in Ireland and told them it hopes to recover their money after receiving a buyout approach for their property assets.
According to The Times, an introducer has told investors that they risk losing everything if they enforce their loans to Dolphin Trust.
Dolphin Trust has been offering its loans to investors since at least 2013, when it was offering 12% per year for a 5 yar term. An investor told the BBC in 2018 that it successfully returned their money.
How Dolphin Trust went so quickly from paying out 12% per year (and 20% commission) to introducers telling investors that there is not even enough money to pay administrators is not clear. Dolphin is already paying restructuring specialists CFE to manage its cashflow problems.
Unregulated German property scheme Dolphin Trust (now known as German Property Group; for clarity we will continue to use its less unnecessarily generic name) continues to struggle with repayments, according to media reports.
Wealth Options Trustees, an "investment wholesaler" based in Kildare, Ireland, has threatened to foreclose (presumably on behalf of Irish pension investors) in the event of non-payment.
Dolphin Trust's CEO Charles Smethurst has admitted to "short-term cash-flow difficulties" according to WOT.
Dolphin Trust's short-term difficulties started in the latter half of 2018, according to unpaid investors who spoke to the BBC last year.
A few months after launching its IFISA investments and misleadingly named "cash investments", reviewed here in April, Grounds has abruptly shut down and announced it is returning capital to investors.
Grounds was closely linked to the Dolphin Trust property scheme (now renamed German Property Group) through common personnel.
The BBC’s You and Yours consumer affairs programme reports that multiple investors in Dolphin Trust (known as Generic Property Group, sorry German Property Group, since April 2019) are months late in receiving the repayment of their capital.
According to the investors who allege late payment, the repayment problems appear to have begun in the second half of 2018.
The investors were sold the Dolphin bonds by salesmen who were being paid commission of up to 20%.
Grounds Investments is offering unregulated loan notes and IFISAs paying 3% per year for a 2-year investment or 7% per year for a 5-year investment.
The company aims to raise money for investment in German property.
Continue reading for a review of Grounds Investments' bonds.