Secured Energy Bonds administration continues to drag on – no funds recovered for investors

Secured Energy Bonds raised £7.5 million from investors promising returns of 6.5% per annum. In 2015 the company went bust and administrators were appointed.

The administrators published their latest progress report on 3rd January.

The report makes it clear that it is extremely unlikely that investors will see a penny of their money back. In total, the administrators have recovered £109,000 net from Secured Energy Bonds plc, after legal and other costs. The administrators’ costs currently stand at £561,000, none of which has yet been paid.

This means that as it stands, the costs of the administrator (who always stands first in the queue) will swallow up all of the money recovered from Secured Energy Bonds, and the investors will receive nothing.

It seems extremely unlikely that any further assets realised by the administrators will be sufficient to cover the costs they have already incurred, and any further costs that will be clocked up as the administration continues.

The claim that these bonds were “asset-backed” was, as with Providence Bonds which collapsed a year later in 2016, completely worthless.

Sale of SEB’s assets

In 2017 the administrators managed to sell two of SEB’s subsidiaries, SEB Mercury and SEB Venus, for £203,150. The sales process was protracted due to the initial preferred purchaser withdrawing after conducting due diligence.

£17,197 was received in final dividends from interests in CBD Energy Limited and Westinghouse Solar Pty Ltd, which also went bust.

The administrator also received 13,959,588 shares in BlueNRGY Group Limited. Whether these are of any value depends on whether BlueNRGY manages to successfully relist itself on NASDAQ – in its latest SEC filing it states “there is no assurance that we will be successful in doing so”.

Ongoing Financial Ombudsman case

Investors in Secured Energy Bonds have launched a Financial Ombudsman complaint against Independent Portfolio Managers, over its role in promoting and acting as “Security Trustee” for Secured Energy Bonds. Initially, the Ombudsman declined to consider the complaint on the grounds that the SEB investors were not customers of IPM, but it reversed this decision in 2017. When the Ombudsman will issue its ruling is not known.

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