Vanished Exmount perpetrating recovery fraud on bond investors

Exmount Commercial Developments

A Professional Adviser article reveals that Exmount Commercial Developments, which disappeared with investors’ money in the summer of 2019, has continued to scam investors even after disappearing.

The couple had invested their life savings with Exmount in 2018, after they were promised between 9.12% and 10.35% annual returns on their investment with three- or five-year bonds. The couple began investing a small amount of money, but over the course of a year took out five mini-bonds with Exmount for a total of £45,000.

The pair tried to redeem the unregulated bonds in early August 2019. According to Chan, a company representative asked the couple to pay a £606 exit fee. The pair paid, thinking they could get their capital back, but were then told there had been an error, and were asked to send an additional £606.

Needless to say the couple never got their £1,212 or their £45,000 back.

Note that August 2019, when the customers attempted to redeem their bonds, was months after Exmount Construction had already done a runner and stopped responding to investor queries.

Whether the recovery fraud was perpetrated by Exmount personnel themselves, or whether Exmount sold their contact list to a third party who then contacted the couple claiming to be from Exmount, is unknown, and matters little.

Exmount Construction Limited went through a series of director changes in its final months, with the final director, Rakesh Raj, resigning on 1 August 2019. Raj was also a director of a shell company, ECD Group Limited (it is probably not a coincidence that ECD stands for Exmount Commercial Developments). Exmount Construction is now rudderless with no directors.

What should I do if I invested with Exmount Construction?

Investors who are owed money by an unregulated firm and aren’t being paid have two practical options: 1) seek legal advice from a registered solicitor, and risk throwing good money after bad, or 2) write it off and forget about it.

Investors can also report Exmount’s disappearance to Action Fraud, although they should not expect to hear anything back beyond an automatic acknowledgement.

If investors are cold-called by anyone claiming they can get their money back from Exmount in return for “legal fees” or “admin fees” or any other payment by the investor, it is a scam – just as in the case reported.

Exmount Commercial Developments goes dark after lying about its Security Trustee

Exmount Commercial Developments

Exmount Commercial Developments (a trading name of Exmount Construction Limited) offered 3 and 5 year bonds paying 9.12% and 10.35% per year. I reviewed the bonds in April 2018.

According to both investors and Jade State Wealth, Exmount Construction has stopped paying interest and is failing to respond to phone calls.

Jade State Wealth had been hired by Exmount to act as Security Trustee. However, according to Jade State, Exmount failed to comply with anti-money-laundering and liquidity requirements and consequently Jade State withdrew its services in February 2018.

According to Jade State, Exmount has continued to solicit investment regardless while still telling people that the investment was overseen by Jade State. Some of them have fruitlessly contacted Jade State asking where their money is.

A request for comment from myself last week went unanswered. Exmount’s website,, remains up at time of writing. It contains little information and in fact some of it (notably a Complaints Policy) has been copy and pasted from Wellesley.

Exmount bonds were promoted by Amir Damoussi via his company Asset Backed Investments for up to 40% commission. Asset Backed Investments was shut down by the Insolvency Service in May 2019.

Over the past year or so there have been numerous changes to the people in charge at Exmount, according to Companies House. At the time of my review the sole director was Joey Mason. Mason stepped down in May 2018 and was replaced by Ousama Moufid, who was replaced in December 2018 by Elmeki Boukhris, who was replaced in April 2019 by Diana Mahay, who after a Lady-Jane-Grey-like reign of three and a half weeks was replaced by Rakesh Raj, who *breathe* remains director at time of writing.

The ownership of Exmount passed between the directors at the same times, although a confirmation statement has not been filed for Elmeki Boukhris’ brief reign.

At the end of May Rakesh Raj filed micro-company accounts which showed no creditors. This has clearly come as news to the people who thought they had invested in its bonds.

What all this has to do with Exmount Construction going AWOL, and whether any of these people actually exist, is anyone’s guess.

A few days ago Exmount changed its address back to the notorious 2 Woodberry Grove, London. Exmount was formed by a company formations outfit, A1 Company Service, which created numerous off-the-peg companies which were later acquired by binary options and forex scams. Exmount, like all these companies, started life at 2 Woodberry Grove, the home of Barbara Kahan, a former director of A1 who is now 88 years old (if she is still alive).

A1 Company Services is not accused of any wrongdoing as it is not their problem what people do with the companies it forms after buying them. Why Exmount has changed its address back to 2 Woodberry Grove is unclear.

What should I do if I invested with Exmount Construction?

Investors who are owed money by an unregulated firm and aren’t being paid have two practical options: 1) seek legal advice from a registered solicitor, and risk throwing good money after bad, or 2) write it off and forget about it.

If investors are cold-called by anyone claiming they can get their money back from Exmount in return for “legal fees” or “admin fees” or any other payment by the investor, it is a scam. Reputable solicitors do not cold call, and administrators collect their fees from the company, not creditors.

Unregulated introducer shut down by Insolvency Service

Asset Backed Management Limited, an unregulated introducer which took commission of between 27.5% and 40% for promoting unregulated investments to the public, has been shut down by the Insolvency Service.

The Insolvency Service announces:

Investigators were able to establish that Asset Backed Management is not, and has never been, regulated by the FCA.

Clearly nothing gets past the Insolvency Service’s investigators. Including a disclaimer at the bottom of Asset Backed Management’s own website which stated Asset backed management [sic] is not regulated by the Financial Conduct Authority. It is not authorised to offer advice on investments, whether regulated or unregulated.”

Additionally, the FCA carried out a regulatory enquiry into the company and it was agreed with Asset Backed Management and its director, Amir Damoussi, that they would not promote or invite investments in bonds or other controlled investments without approval of an FCA-authorised person.

The company’s methods of attracting new customers, which included cold calling and targeting people who were not sophisticated investors, in some cases even vulnerable individuals, were in breach of financial regulations.

Asset Backed Management being nice enough to agree with the FCA that they wouldn’t break the law in future wasn’t enough to save the company.

The Insolvency Service’s press release does not reveal whether any further action will be taken against Damoussi.

Which particular investments paid Asset Backed Investments 27.5% to 40% commission was not revealed by the Insolvency Service, although they examined its books and established that it received around £260,000 in commission in total.

As of 2018, Asset Backed Investments described its investments on its website as “Corporate Bonds – Commercial Property – Property Bonds – Renewable Energy Bonds” with returns of 9% to 10.35% over a term of 3 to 5 years.

This bears a remarkable similarity to the rates offered by Exmount Commercial Developments, which at the time of our review in May 2018 paid interest of 9.12% for three year bonds and 10.35% for five year bonds.

Exmount Commercial Developments (whose registered name is Exmount Construction Ltd) has been overdue with its 2018 accounts since the end of last month.

Asset Backed Investments was set up in 2017. From January 2017 to January 2018, a significant control function was held by Ricky “Wolf of Westcliff” Burgess. Burgess is banned from acting as a director of any company until 2031, following his involvement in scams relating to carbon credits and the sale of gems as investments.

Amir Damoussi has lost no time in moving on to his next venture. Companies House shows that in April 2019, he incorporated a new company, B2C Marketing Limited, along with fellow director Wade Bush. At time of writing B2C Marketing does not appear to have a public web presence.

Helen Cosgrove, Chief Investigator at the Insolvency Service, stated:

The Insolvency Service will investigate any reports of such conduct and petition the court to wind-up companies found to be trading to the detriment of the public interest.

Alternatively, if the Insolvency Service or the FCA are at a loose end, they could always just Google “best interest rates” or “safe investments”, instead of waiting for the public to whistleblow.

Exmount Commercial Developments – unregulated bonds paying 9.12% over 3 years and 10.35% over 5 years

Exmount Commercial Developments

Exmount Commercial Developments offers unregulated bonds paying 9.12% per year for 3 years and 10.35% per year for 5 years, paid quarterly.

The bonds can be terminated early halfway through the term (1.5 years for the 3 year bond and 2.5 years for the 5 year bond) at 45 days’ notice for a nominal admin fee of £75 + VAT.

Who are Exmount Commercial Developments?

Exmount Commercial Developments is a trading name of Exmount Construction Limited. Joe (Joey) Mason is the sole director and shareholder.

Exmount Commercial was technically incorporated in 2013, but only became active in July 2017 when ownership was transferred from a company formations outfit to Joe Mason. It is yet to file accounts as an active company.

The other board member listed in Exmount’s literature is Head of Commercial Development Edward Fall, described as previously of Minerva. I was unable to confirm whether his previous position was with Minerva Lending or the much larger and unrelated company Minerva Limited.

Update 9 May 2018: In May 2018 control and ownership of Exmount Construction Limited was passed from Joey Mason to Ousama Moufid, a French national.

How safe is the investment?

These investments are unregulated corporate loans and if Exmount defaults you risk losing up to 100% of your money.

The purpose of the loan is to allow Exmount to acquire and develop commercial property.

If Exmount fails to make enough money from its property developments, or for any other reason Exmount has insufficient funds to service these bonds, there is a risk that they may be unable to pay investors their interest and capital.

Asset-backed security

Investors’ money is secured against the underlying assets of Exmount Construction Limited. A Security Trustee (Jade State Wealth Ltd) is responsible for taking control of Exmount’s assets should it default.

Investors should not assume that because their loans are secured on these assets, they are guaranteed to get at least some of their money back through sale of the collateral if the issuer defaults. Investors in asset-backed loans have been known to lose 100% of their money (e.g. Providence Bonds and Secured Energy Bonds) when it turned out that there was no money left for investors after paying the insolvency administrator (who always stands first in the queue).

We are not in any sense implying that the same will happen to investors in Exmount Construction, only illustrating the risk that is inherent in any corporate loan notes even when they are asset-backed.

The literature states “Before each tranche [of loans] is offered and issued, the Security Trustee will check and ensure that the total outstanding value of all the bonds (including those being issued in the new tranche) will not exceed 16 times the net asset value of the company.”

If the total outstanding value of all the bonds exceeds 1 times the net asset value of the company, the collateral will be insufficient to fully repay investors in the event of  default.

As the collateral – the net asset value of the company – is permitted to be as little as 6.25% of the outstanding value of all bonds (16 x 6.25% = 100%), there appears to be little point in investors relying on this security.

Early redemption option

Other than a nominal £75 charge and 45 days’ notice, there appears to be few conditions attached to the early termination option.

However, investors should bear in mind that their ability to exit the bonds early at the halfway point will depend on whether Exmount Construction has sufficient liquid funds.

Should I invest with Exmount Commercial Developments?

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 unregulated corporate bond, 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 up to 10.35% per annum yields should be considered very high risk. As an individual security with a risk of total and permanent loss, Exmount’s bonds are higher risk than a diversified stockmarket fund.

This particular bond is described as asset-backed, however, according to the literature, Exmount is permitted to borrow from investors up to 16 times the value of the assets on which the bonds are secured, so in practice this security may only cover an almost irrelevant 6.25% of investor’s money.

Even this assumes Exmount’s assets remain valuable and liquid enough to cover this much, after paying the insolvency administrator.

Before investing investors should ask themselves:

  • How would I feel if the investment defaulted, the sale of the security failed to raise enough money to compensate all investors, 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?
  • Am I willing to place any reliance on the asset-backed security given that according to the literature, it may only cover 6.25% of bondholders’ money?

If you are looking for a “secure” investment, you should not invest in unregulated products with a risk of 100% capital loss.