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.
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.
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.
Fortitude Capital has collapsed into administration. Neil Bennett & Alex Cadwallader of Leonard Curtis have been appointed as administrators.
The administrators were appointed by a secured creditor, which based on Companies House’s list of charges is most likely to be Fortitude’s Security Trustee, More Group.
I reviewed Fortitude Capital’s bonds in September 2018 and noted that, despite Fortitude’s owner Ajaz Shah claiming in literature that “The foundation of Fortitude is capital preservation”, the bonds were inherently high risk.
Fortitude CEO Ajaz Shah
Owner Ajaz Shah was a director of MJS Capital for a single day. In my original review of Fortitude, I noted that MJS Capital had stated that it held a forex investment with a former MJS director, which I speculated was Shah’s Fortitude Capital. Shah denied this. Falsely, as it turned out.
I can clearly state that my company Fortitude Capital Ltd has never managed funds for MJS Capital Plc. – Ajaz Shah, October 2018
The last administrators’ report for MJS Capital confirmed that in reality, MJS invested £6 million with Fortitude, and only a month before Shah’s inaccurate denial, had agreed with Fortitude to write this down to £1.6 million.
Fortitude’s 2018 bonds offered investors up to 12% per year and were promoted by Direct Property Investments, an unregulated introducer which also promoted MJS. The investment literature did not disclose that Fortitude’s was in enough financial difficulty for MJS Capital to accept a 75% write-down of its investment with Fortitude a few months later.
In unaudited accounts filed for March 2019, Shah claimed that the company held £7.4 million in net assets. How much is left in the company remains to be seen. In theory, given that Fortitude Capital claimed to generate returns via forex trading, Fortitude’s assets should consist mostly of whatever liquid currency it was trading at the time.
Prior to collapsing into administration, Fortitude had handed to MJS Capital’s administrators the sum of £140,960 and a Porsche with a second-hand value of £70,000. As at May 2020 the administrators were negotiating a payment schedule with Fortitude for the outstanding balance of £605,000. Fortitude’s collapse into administration presumably makes those negotiations moot.
At time of writing the administration has not been announced on the Gazette or Companies House. An anonymous reader informed me of the administration which was confirmed by the administrators. More to follow when the administrators report.
The liquidators of MJS Capital have released an update into the first year of its winding up.
In total MJS Capital raised £42 million from investors, including via unregulated introducers. Claims for £36 million have been received by the liquidators and they estimate a further £6 million is yet to be claimed.
MJS Capital claimed that investors’ money would be invested in “low risk” arbitrage.
In reality, at the time of the liquidation, the bulk of investors’ money – £38 million, according to MJS’ balance sheet – was invested with just two companies, namely Angel World Family Office LLC , and Fortitude Capital.
The balance sheet puts the amounts owed by Angel World and Fortitude at £26m and £11m respectively, but the administrator goes on to put the amounts invested with Angel World and Fortitude at just £6m and £7m respectively. The only other assets held by MJS Capital consisted of a million or so loaned to other businesses, plus funds held by payment agents.
The loans to other business include £400k loaned to Tempus Media (London) Limited and used to acquire Tempus Magazine.
What happened to the rest of the £42 million invested is not clear from the report.
At the beginning of the liquidation the liquidator saw statements indicating an asset value of £36 million. This proved to be aggressively optimistic, as prior to the liquidators’ being called in, MJS Capital made settlement agreements with Angel World and Fortitude which left the potential asset value at £7 million.
Investors’ losses may yet be greater than this depending on what the liquidators manage to recover.
Angels and devils
MJS Capital had £7 million invested with Angel World, an entity in Dubai. Prior to the liquidation, with angry investors banging on the doors, MJS agreed with Angel World to take just £5.3 million in full and final settlement.
After a trawl of the emails relating to the deal, the liquidators were unable to find any evidence that this was not an honest “arms’ length” transaction.
Only an initial £250,000 was ever paid back to MJS, and even that was spirited out of MJS before the liquidators got in.
Angel World is now also in liquidation, meaning the chances of the liquidators recovering any of the remaining £5.05 million are unclear.
As for Fortitude, MJS had £6 million invested with their trading platform, but in another settlement agreement entered into prior to the liquidation, MJS agreed to accept just £1.6 million as full and final settlement.
When the liquidation began, Fortitude still owed £816k to MJS, of which the administrators (after serving a statutory demand) have so far recovered £141,000 and a Porsche valued at £70,000. A payment schedule is currently being negotiated for the rest.
Let us remind ourselves at this point that in September 2019, months after the liquidators were appointed, CEO Shaun Prince was still insisting that MJS had “cashflow issues” and should never have been put into liquidation.
How Prince thinks MJS was ever going to repay the £42 million owed to creditors while writing off its own debts down to £7 million is unclear.
Former MJS Capital advisory board member Nigel Peck, who was director of an MJS shell company MJSC Marketing Limited, alleged that MJS operated as a Ponzi scheme by using new investor money to pay off existing investors who were threatening winding up proceedings.
A total of £450,000 was paid to 25 parties after the winding up petition was presented. As per the Insolvency Act S127, these payments are now null and void. The administrators have recovered a total of £31,000 so far and are mulling whether it is worth pursuing legal action to recover the rest, which has met with “significant resistance”.
Thames Valley Police are currently also investigating. The investigation was passed to a specialist team in Hertfordshire Police but then passed back to Thames Valley’s finest. Details of the investigation have not been disclosed.
MJS investors have been repeatedly contacted by recovery fraudsters claiming they can get their money back – after they pay a fee, which of course they never see again.
The liquidators report that the fraudsters not only know the investors’ contact details but also details of their investment with MJS.
How the recovery scammers obtained details of the investors’ investments is not known.
To date the liquidators have recovered £149k from MJS Capital. Their own costs stand at £525k and a further £354k in legal costs is due to Taylor Wessing for legal advice.
Relatively little news has emerged from MJS Capital since then, other than a filing on Companies House showing that a creditors committee has been formed, and the odd tidbit released to the press. The liquidators have not yet released a report into the liquidation of MJS Capital (now Colarb Capital plc) itself.
The liquidators, David Rubin & Partners, have however released a report into MJSC Marketing Limited, a shell company used by MJS Capital to move money.
MJSC Marketing Limited was formed by sole director and owner Nigel Peck, who was described as a member of MJS Capital’s advisory board in investment literature.
He has worked predominately in London, as well as Russia and the USA, with major companies holding both senior management and director positions focusing on marketing, sales, compliance, human resources, and corporate governance, and has many institutional connections. – MJS Capital brochure from 2017
Peck’s last regulated role in the UK was at Park Caledonia Associates, which he left in 2010 according to the FCA register.
MJS Capital CEO Shaun Prince
The administrator reports that he met with Peck and MJS Capital CEO Shaun Prince in September 2018 when MJS Capital was starting to collapse under the weight of winding up petitions from aggrieved investors.
During his discussions, the administrator “grew concerned that investors’ money may have been used for purporses inconsistent with the terms on which it had been invested.”
A week later Peck expressed concerns to the administrator “that the company was being used as a conduit for the misuse of the funds invested by members of the public supposedly into MJS Capital plc”.
Despite being the sole owner of MJSC Marketing, Peck told the administrator that he was not in full control of MJSCM’s bank account, as Prince and another person acting for Prince were “moving funds into and out of the Company’s account without Mr Peck’s knowledge or consent”.
Peck also alleged that MJS Capital had been investing into companies in which Prince had a personal interest.
Peck also alleged that MJS Capital operated as a Ponzi scheme.
Mr Peck also advised me that he believed that investment monies from new investors was [sic] partly being used to pay off older investors who had been threatening MJS Capital PLC with winding up proceedings.
Shortly afterwards Peck accepted the administrator’s advice to place MJSC Marketing into administration.
According to the administrator, this was too late to prevent £300,000 disappearing via MJSC Marketing under “highly suspect” circumstances.
I quickly established that over £300,000 had recently been deposited into the accounts and that in the days preceding my appointment, all of those funds had been transferred out of the accounts at the direction of an employee of Mr Prince. These transactions finally emptied the bank accounts on the very day my appointment took effect. I view that circumstance as highly suspect but the bank was unable to reverse the transactions.
A total of £965,000 was paid from MJSC Marketing to third parties which did not meet MJS’ investment criteria, according to the administrators.
The MJSCM administrators, David Rubin & Partners, have now also been appointed administrators of MJS Capital itself, and the administrators are of the firm view that the affairs of MJSCM and MJS Capital need to be viewed together.
Nigel Peck may not be off the hook either.
No useful purpose can be served by the return of control of this Company to its sole Director, Mr Peck. It is apparent from my enquiries that the conduct of Mr Peck itself may warrant further scrutiny.
With the accounts having been emptied by Prince and his merry men, Peck paid £6,000 into the company, which paid for legal advice from Taylor Wessing and obtaining the court order to liquidate the company. The administrator’s own fees have not yet been drawn.
Liquidator Asher Miller of David Rubin & Partners has written a report to creditors saying Colarb’s balance sheet cites assets of £39.7 million, of which Prince had said £27.7 million could be realised. However, the report says Prince’s figure appeared to be “overstated by £20 million or more” based on earlier documents signed by Prince and MJS’s two biggest portfolio companies.
The biggest alleged overstatement was in the case of money invested with a Dubai firm called Angel World, where the £26 million valuation on the Colarb balance sheet was written as being worth only £5.3 million.
“MJS simply had cashflow issues… and should still be operating today” says former MJS Capital CEO Shaun Prince
CEO Shaun Prince blames the discrepancy on MJS Capital being put into liquidation, as a result of being unable to pay its debts to bondholders.
What the liquidation has to do with the discrepancy is unclear. Any administrator would have been free to let MJS Capital’s investments run their course if there was a realistic chance of getting a 400% return as a result.Prince has previously told the Evening Standard that MJS Capital took in c. £30 million from investors.
The administrators’ report is not yet on Companies House but we’ll bring you more when we have sight of it.
David Rubin and Partners has been appointed to liquidate MJS Capital (now known as Colarb Capital).
MJS collapsed early in 2018 and was finally put into liquidation in March 2019. It allegedly took £30 million from bondholders.
After a five-way beauty parade between rival insolvency practitioners seeking the appointment, David Rubin & Partners was given the job last month, according to a recent filing with Companies House.
The collapse of MJS has been something of a footnote to the much larger collapse of London Capital & Finance. John Russell-Murphy (the “J” in MJS) was, according to the Evening Standard, “instrumental in connecting LCF to its slick marketing partner, Surge”. The Surge group of companies was paid £60 million for running LCF’s call centre and ran two websites which directed investors to LCF under the guise of providing interest rate comparisons.
Surge is not accused of any involvement with MJS Capital. Russell-Murphy resigned from MJS in 2016, leaving Shaun Prince (pictured) as the only one remaining of the three original founders.
The collapse of MJS seems to have affected Prince so badly that he forgot his own date of birth. The Companies House filing appointing him as director of MJS shows his date of birth as 30 September 1980, as do filings for Tempus Media (London) Limited and MJS Canco Limited. However, in October 2018 he incorporated five shell companies, named Colarb Capital 1/2/3/4 Limited and Colarb Capital DL MB Limited, all of which show his date of birth as October 1980.
According to the Evening Standard article last month:
So, where did MJS investors’ money go? Sources suggest 11 firms got bondholders’ cash. One, an investment company called Angel World, is said to have received £7 million and is thought to have repaid a chunk of that.
Another is Ajaz Shah, an investment manager with a business called Fortitude Capital. He says he received “approximately £1.4 million” of MJS/Colarb money to invest in foreign exchange trading and said he now owed around £725,000. Shah was, unusually, a director of MJS for one day.
We’ll keep you posted as and when the liquidator files their updates.
A filing on Companies House reveals that MJS Capital (renamed Colarb Capital in October 2018) has gone into liqudation.
MJS Capital issued 5 year bonds paying up to 9.85% per year. Despite the inherent high risk nature of a loan to a micro-cap startup company, multiple MJS directors repeatedly and inaccurately claimed that the investment was “low risk”.
MJS Capital CEO Shaun Prince
A winding up hearing was held a month ago on 20 February. Since then MJS Capital CEO Shaun Prince has reportedly been trying to persuade investors in his collapsed firm to use his preferred liquidator.
MJS Capital began defaulting on repayments of capital and interest in early 2018. Despite its inability to repay investors on time, Prince claimed in an email to investors in July 2018 that the company was performing “fantastically”.
At the same time, MJS Capital was trying to persuade investors to defer repayment for a year, which was dressed up as a “switch” to new “Colarb 4” bonds which were supposedly capital protected by an insurance policy. This insurance policy was explicitly claimed to “protect the investors capital and coupon” [sic] and described as better than the Financial Services Compensation Scheme. The claim that MJS Capital bonds have equivalent or better cover to the FSCS is of course completely false.
Prince claimed to the Evening Standard last November that MJS Capital took in £20 million of investors’ money. How much of this is left is not yet known. We’ll bring you more as and when the liquidators file their reports.
Tempus, the luxury lifestyle magazine, has relaunched after a five-month hiatus, after being sold by collapsed unregulated investment firm MJS Capital (now Colarb).
Tempus was effectively acquired by MJS Capital in March 2017, and used extensively to help sell its unregulated bonds, with frequent double-page ads in the magazine and advertorial articles about MJS Capital itself, which misleadingly described the bonds as low risk.
The September 2018 issue, ironically named a “Wealth Edition”, was the last under MJS Capital’s ownership. The magazine then ceased to publish for several months.
At the end of January 2019, however, Tempus published a further issue under new ownership. The contents page identifies Vantage Media Limited aka Vantage Media Group as the new owners.
Vantage Media Limited is wholly owned by sole director and ex Army medic Colin Clark (as is a very similarly named company, Vantage Media Group Limited). Colin Clark is also a member of cybersecurity specialist Valkyrie GB Limited, with his role described on his LinkedIn profile as “Executive Operations”.
In Tempus’ first issue under the new ownership, there is a double-page ad on pages 6-7 of the magazine (the slot once frequently occupied by MJS Capital ads) for Volopa, a sister company to Valkyrie that offers multi-currency debit cards.
The contents page suggests the editorial staff have survived the transition to Vantage largely intact. Colin Clark is described modestly on the contents page as “Operations Director”.
MJS / Colarb faced a petition to wind the company up on 20 February. Unofficially this petition is believed to have been granted, although we’re waiting on official confirmation from Companies House to bring you more news.
Given that MJS went into liquidation only a few months after it sold Tempus to Vantage, and had already been in default of its obligations for months before then, the deal is likely to be scrutinised closely by the administrators. This is of course no concern of Vantage’s.
Vantage Media Limited was incorporated in October 2018, a month after Tempus temporarily stopped publishing under MJS, suggesting that the deal was lined up quickly.
I reached out to Tempus for comment as to how much the deal was worth; at time of writing they have not responded.
A winding up petition against troubled unregulated investment firm MJS Capital (now Colarb Capital) is due to be heard on Wednesday 20th February.
A petition was originally filed by an MJS creditor on 23 October 2018 and due to be heard on 23 January 2019, but this was delayed and eventually rescheduled to next week.
The hearing will take place in London at the Royal Courts of Justice. Information on how to attend the hearing can be found in the MJS Capital Action Group on Facebook.
MJS has continued to maintain that it has sufficient funds to meet its obligations and that its failure to make payments of interest and capital to numerous invests are down to banking issues. Investors have been encouraged to transfer to new bond issues, which in practical terms means deferring the repayment of their money to a later date.
It’s been nearly a year since MJS Capital (known as Colarb Capital since October; to avoid confusion, for the rest of this article we will continue using their original and less silly name) started to fail to pay investors’ interest and capital on time, something it has blamed on “banking issues”.
Investors are now being told that to receive their funds back, they must switch from MJS’ bond series 3 or 5 to Colarb bonds series 4. Investors have been promised that if they do, quarterly interest payments will resume and they will receive their (already overdue) capital back after a year.
The information memorandum for the new Colarb bonds describes a business model which is essentialy unchanged from the original MJS model; funds are to be invested in arbitrage and “delta neutral” trading.
The literature claims that “ColArb Capital Plc was incorporated… to provide accelerated returns for other investments” which is pretty brazen given that “accelerated returns” is the exact opposite of what MJS investors have experienced over the last year.
Colarb representatives are claiming that MJS investors whose funds are already due for full repayment must switch to the new Colarb bonds to receive their funds back. This raises two very important questions:
If Colarb has sufficient funds (and open banking channels) to make interest and capital repayments to “Colarb 4” investors, why can they not make repayments to investors in the original MJS bonds?
MJS has already had a year to resolve its issues and has apparently not done so. What exactly is supposed to have changed when repayment of the new bonds falls due in 2020?
“MJS Capital Plc’s performance is way above and ahead of what we anticipated” – MJS Capital CEO Shaun Prince in July 2018
An email sent to investors by MJS Capital CEO Shaun Prince in July 2018 waxed lyrical about the company’s performance – despite the fact that it had already been in default of interest payments for several months by this point.
The email claims that in late 2017, MJS Capital put in an “indemnity cover” that “works in a very similar way to a performance and capital guarantee.”
Prince explicitly compares MJS Capital’s insurance cover to the Financial Services Compensation Scheme and suggests MJS Capital’s insurance policy is even better, because it has a limit of £30 million rather than the FSCS’ £50,000 or £85,000.
Prince’s claim that MJS Capital has secured insurance cover equivalent to (or better than) the FSCS is, to put it mildly, complete nonsense.
No insurer insures unregulated investment schemes against all risk of loss. If they wanted to take on the risk they would invest in the company’s bonds and get the same return offered to bondholders, rather than just an insurance premium.
If an insurer did agree to cover an investment against all loss (known as a credit default swap), the premiums for this policy would bring the offered return of the investment down to the risk-free rate.
The original MJS Capital literature referred to insurance policies the company had in place against trading counterparty failure and third party fraud. If MJS Capital has taken out a further £30 million insurance policy, it is likely that this insurance is along similar lines, with the insurance applying only in very specific circumstances that would not cover MJS Capital running out of money. Needless to say the insurer is not named.
As a further carrot to encourage investors to defer asking for their money back, Prince’s email claims that this new insurance policy does not apply to investors in their current bonds, but that investors can switch to new bonds which are covered.
Prince finishes off by claiming that MJS Capital is in the process of applying for a stockmarket listing, which he expects to be easy thanks to the due diligence already conducted by the unnamed insurer. MJS Capital is also to launch new investments in cryptocurrency and medicinal cannabis.
Prince previously claimed in March 2017 that MJS Capital would be listed on the London Stock Exchange “in the coming months”. These months appear to be a long time in coming. There is no public evidence of any stockmarket listing application by MJS / Colarb Capital.
