Harewood Associates update: SPV investors given cold shoulder, FCA-kitemarked reboot disappears

The administrators of Harewood Associates have released their latest report.

£2.8 million owed by another Kiely-owned company, Lansdown Investment Management, has now been fully repaid.

The administrators are however still expecting only 7p in the pound to be paid to Harewood Associate’s £32 million worth of unsecured creditors.

In further bad news for Harewood investors, those who invested in Special Purpose Vehicles (SPVs) have been told that they will not be considered creditors of the company. While the whole point of setting up an SPV is usually to keep its debts separate from the main company, Harewood investors had previously been given hope of being included in the main administration (if being added to an administration which projects 7p in the pound can be viewed as such a thing). This suggests some sort of corporate guarantee.

The idea was sufficiently strong for the administrators to hire a barrister to look into it, however having done so, they have concluded that the SPV creditors are not creditors of Harewood Associates itself.

FCA-kitemarked offshoot closes its doors via voluntary strikeoff

Harewood owners David and Peter Kiely owned another property firm, Monmouth Regent plc.

In an echo of the Harewood scheme, Monmouth Regent plc was previously offering bonds paying 8% per year on its website.

We are delighted to be able to invite you to participate in Monmouth Regent PLC’s inaugural offers for subscription of 8 percent five-year fixed rate secured loan notes.

Monmouth Regent plc website as at May 2020

In July 2020 Monmouth Regent plc was voluntarily struck off the register, suggesting that its fundraising never actually took place (or you would expect creditors to object). Its website monmouthregent.co.uk has also disappeared.

Harewood Associates illegally advertised its bonds directly to the public and claimed that its loan note offering was exempt from UK securities law because Harewood was a property company. As I’ve pointed out before, this is like me soliciting investment from the public in a fast food business and claiming securities law doesn’t apply to me because I’m regulated by the Food Standards Agency.

In contrast, Monmouth Regent plc’s website stated that its offering was approved by an FCA-regulated company, Monmouth Regent Capital Limited, as an appointed representative of Blackheath Capital Management.

The trouble with this claim is that Monmouth Regent Capital only held its appointed rep status from May 2015 to August 2016.

Given that Monmouth Regent plc apparently came and went without taking in any money, or doing anything whatsoever (it filed accounts as a dormant company until its directors struck it off the register) there’s nothing too untoward about it having out-of-date information on a moribund website. However, archive.org shows that Monmouth Regent’s website changed significantly at some point between January 2019 and May 2020, while leaving the false claim to have FCA-authorised sign-off for its ads.

Harewood Associates website in 2016

The shuttering of Monmouth Regent leaves one enduring mystery: why Kiely 1 and Kiely 2 went to the bother of (very briefly) securing FCA authorisation via Blackheath in order to promote their new 5 year bonds, when in their world, property companies are exempt from UK securities legislation.

Despite promoting its investments directly to the public from at least 2013 until its collapse, resulting in at least £32m of investor losses, no enforcement action has been taken against Harewood that is in the public domain.

Harewoods administrator revises expected losses from 84% to 93%

Harewood Associates Logo

The administrators of collapsed unregulated property investment scheme Harewood Associates have released their latest update.

Harewood Associates raised £32m by advertising bonds and preference shares directly to investors. The scheme collapsed into administration in June.

In their initial report, the administrators wrote off £36 million of the £40 million which Harewood Associates lent to linked companies, including £17 million loaned to Harewood Venture Capital and £19 million loaned to Sherwood Homes.

The administrators have now also written off a further £1.2 million from the “Equiscale” investment and £1 million owned by a company called Southworth Construction (owned by a James Cuniff).

The administrators have successfully raised £721,000 (after fees and costs to date), mostly representing a £310,000 property in Shropshire and £500,000 recovered from Lansdowne Investment Partnership (LIP), another Kiely-owned company.

Harewood Associates' David and Peter Kiely
Harewood directors Peter and David Kiely

LIP owes Harewoods a total of £2.8 million and has agreed to pay £500k upfront with the remaining £2.3 million payable in instalments to October 2020, with security taken over several properties owned by the Kiely-owned partnership.

Harewood director Peter Kiely also repaid a £14,600 director’s loan account. Which is nice.

The status of claims by investors in Harewood preference shares are being reviewed by a barrister. Preference shareholders are normally viewed as owners rather than creditors.

However much the administrators manage to recover from what little remains, it is clear that, with 93% losses now being the “best case”, Harewoods is a virtual write-off.

The difference between Harewood’s claims that its bonds were “safe and secure” and “secured by way of debentures on UK residential developments” could not be starker. The only thing backing Harewood’s bonds were loans to other Harewood companies that have been mostly written off.

No action has been taken by the FCA or any other enforcement body against Harewood for illegally and misleadingly promoting its bonds directly to investors that is in the public domain.

Harewood Associates administrators report: £40 million loaned to related parties, at most £4.2 million remains

Harewood Associates Logo

The administrators of collapsed unregulated property investment scheme Harewood Associates, Begbies Traynor, have released their first report.

Subsequent to the report, Harewood director Peter Kiely has signed a Statement of Affairs detailing how much of the company’s assets remain to be realised to investors.

An anonymised list of creditors shows that a total of £31.8 million was invested by 878 investors in its loan notes, an average of just over £36,000 per person. Amounts owed to creditors ranged from £5,000 to the largest investment of £788,481.

Currently unknown is the amount invested in shares issued by Harewood in Special Purpose Vehicles. At the moment administrators are deciding whether Harewood SPV investors should be considered creditors. Normally a shareholder of a company is not a creditor.

Back in 2016 Harewood claimed in a web promotion for their bonds:

If in the event that the Company did go into liquidation, the assets of the company would be sold off and the investors would be repaid. As we have substantial equity within each project, even at forced fire sale prices, there would be enough to repay the investors and deal with any staff, legal and accountancy commitments.

Turns out this was an aggressively overoptimistic statement.

According to the Statement of Affairs, Harewood loaned a total of £40.5 million to other related companies.

Of this, only £3.9 million is expected to be realised.

A £5,000 loan from a Paul Kiely, a £300,000 freehold property and £468 of cash in the bank brings the total estimated realisations to £4.2 million.

The administrators’ report lists a total of 9 related companies which owe money to Harewood. The administrators have written off 4 of these as not expected to provide any recovery. This includes the largest debts of £16.7 million owed to Harewood Venture Capital (which initially owned the liability of the investor creditors, but this was transferred to Harewood Associates in May 2018) and £19.2 million loaned to Sherwood Homes.

HVC is in liquidation (Begbies Traynor have taken over from the Official Receiver) while Sherwood Homes is still in existence, but has ceased to trade and holds no assets according to Peter Kiely.

As for the other five companies, the administrators are uncertain as to whether they will get anything from 3, and from the other 2 they anticipate getting something but cannot say how much.

The administrators have said that 84% losses before their costs is the current best case scenario. However this assumes that the five companies not already written off pay their debts back in full. Given the record of the other four, this would appear to be an optimistic assumption. In addition, the administrators’ fees (estimated at £276k as it stands) will come out before any payment is made to investors.


The administrators also refer to a company called Equiscale Limited which was acquired in March 2018 for £1.2 million. Equiscale owned a company called Geo. Noblett (Plant Hire), which in turn owned some land in Blackburn. The land was transferred to another Harewood company, Heron Homes, in April 2018 for £1.16 million. According to the administrators, Heron never paid Geo Noblett for the land.

Peter Kiely claims the shares in Equiscale were transferred to another company, Clifton Argyle Limited, in March 2018 and the proceeds deducted from money owed by Harewood to Clifton Argyle. The administrators say they “have not been provided with any evidence of this transaction and we are continuing with our investigations”.

So, in summary, Harewood used to own a company, but it doesn’t any more, and that company used to own some land, but it doesn’t any more, and it was never paid for that land, but as Harewood doesn’t own the company that wasn’t paid any more, that would seem to be moot from the investors’ perspective. In line with his statement to the administrators, Peter Kiely’s Statement of Affairs does not list the Equiscale investment.

How the bonds were sold

Harewood illegally promoted its loan notes and SPV shares directly to investors,  claiming it was exempt from the Financial Services and Markets Act because it was a property company.

Are we FCA regulated and is investment covered by the FSCS?
No we are not FCA regulated. All our investments are property related and therefore the Law and Property Acts apply.

The reality is that loan notes and shares issued by a property company are subject to the FSMA just like any other loan note or equity security. Companies which promote securities to the public in the UK require authorisation from the FCA. Neither Harewood Associates nor its directors were authorised by the FCA.

Website advert
Advert for Harewood’s bonds on their website, September 2016.

Kebab vans are a proven safe and secure investment because drunk people always want sheep testicles and if it goes tits up the Security Trustee will step in and sell the van. Invest now.

As pseudolegal gibberish goes, Harewood’s argument is a bit like me encouraging the public to invest in bonds paying 12% per year in my kebab van, and saying I’m exempt from the Financial Services and Markets Act because I’m a kebab van and therefore the Food Safety Act applies.

Not only were investors investing in loans not property; it turns out that they weren’t even investing in loans to a property company. They were investing in loans to a company which made loans to other companies.

Despite Harewood claiming on the 2016 version of its website

Investments are secured by way of debentures on UK residential developments


All our investments are property related

FCA covered
Extract from Harewood Associates website in 2016.

a significant proportion of the underlying loans in Harewood Associates were, according to the administrators’ report, not secured on property. The administrators have written off four out of nine companies which owe Harewood Associates money. Which means that either these loans from Harewood Associates aren’t secured on anything, or if they are, the security is worthless according to the administrators.

These four debts account for £36.6 million of the £40.5 million owed to Harewood Associates – just over 90%.

What if anything will be realised from the other 10% is currently highly uncertain.

In a video promotion uploaded to YouTube in 2013, Harewood Associates claimed its bonds were “safe and secure” despite offering a “market beating rate of 12% per annum”.

So who are the Kielys?

Harewood Associates' David and Peter Kiely
Peter and David Kiely

For Harewood Associates director David Kiely, the experience of having his business collapse will be wearily familiar.

Back in 2005 David Kiely’s former business S-Mart Stores collapsed. A year later a pub company called Provence and another company called Do It Right UK, both owned by David’s brother Paul (the same one who loaned Harewood £5,000?) also collapsed.

The Morning Advertiser (a pub trade paper) reported back in 2006:

Paul Kiely’s brothers David and Shaun Kiely ran a firm, S-Mart Stores, that collapsed in identical fashion to Provence a year ago. Both firms sold hugely overvalued freehold properties to private investors on the promise of inflated rents.

[MP Jim] Dobbin tabled an Early Day Motion in the House of Commons in March 1998 which decried the activities of Provence founder Paul J Kiely and his brothers.

He described Kiely Developments as cowboy builders who “continually flouted builders regulations”. A year later the company, where Paul Kiely and brother Shaun Kiely served as directors, collapsed. This week Dobbin said: “I am not surprised to find that members of this family have been involved in a company which has again let down the people they claim to be working for. The Department of Trade needs to look seriously at their suitability for holding directorships. Maybe it is time for a fraud enquiry.”

As far as I can tell no fraud enquiry was ever launched, and you can’t blame one businessman for the failed businesses of their brother. There is therefore no suggestion that there was anything illegal about any of the Kielys’ businesses collapsing.

Nonetheless, it is difficult to see why any potential lender conducting basic corporate finance due diligence into Harewood Associates would not read about the collapse of David Kiely’s former business and the business history of the Kiely family as a whole,  and ask serious questions about the history of the directors, and whether their investment opportunity was as secure as they claimed.

But it is easy to say such things with hindsight. Harewoods investors weren’t doing due diligence. They thought they were investing in property so none was needed.

The fundamental belief behind the Financial Services and Markets Act is that novice investors who do not know what due diligence is, are not skilled in carrying it out, and do not know when they should carry it out, should not have high risk unregulated securities promoted to them by unregulated companies.

But Harewoods believed that didn’t apply to them because something something property.

So here we are.

£32.8 million raised from investors on the basis of illegal and misleading financial promotions and nearly all of it has disappeared.

No action has been taken against Harewood or their directors by the FCA or any other government body that is currently in the public domain.

Harewood investors told to expect at least 84% losses

Harewood Associates Logo

The Telegraph reports that investors in Harewood Associates have been told by the administrators, Begbies Traynor, to expect at least 84% losses, with a possibility of total loss.

A spokesman for Begbies Traynor, the administrators, said: “The proposals issued to creditors anticipate a range of returns between nil and 16p in the pound. The return is subject to realisations of debts due from associated companies.”

With the amount left in these associated companies unknown, the standard rule for investors in collapsed unregulated investment applies; expect nothing and treat any recovery as a bonus.

Begbies Traynor are due to deliver their initial report to Harewood’s creditors within the next few weeks.

While investors in Harewood’s loan notes are counted as creditors, other Harewood investors, who invested in shares in Harewood companies (SPVs or Special Purpose Vehicles) are currently in limbo.

In general, a shareholder of a company (including an SPV) can only realise their investment by either selling it to someone else or winding up the company. The former evidently isn’t going to happen.

Unlike creditors, shareholders have no power to call in administrators in that capacity. If they can get a controlling share together, they can wind the company up, but Harewood investors invested in preference shares with no voting rights, which appears to remove that option as well.

Harewood Associates illegally promoted its loan notes and SPV shares directly to investors. In 2016 it falsely represented on its website that its loan notes and SPV shares were exempt from UK securities law as they were property-related.

The reality is that while the sale of a property is not subject to UK securities law (even if it is sold as an investment), a loan note or equity security most definitely is. The fact that it is a share in / loan to a property company is irrelevant.

Soliciting investment in securities in the UK requires authorisation from the Financial Conduct Authority, which Harewood did not have.

Harewood Associates goes into administration owing £32.7 million

Harewood Associates Logo

Harewood Associates offered unregulated investments in property from 2010 onwards. From at least 2013 the company offered unregulated loan notes, with typical rates of up to 12% per year.

Last week Harewood went into administration, with Begbies Traynor appointed as administrators. The administration is not yet visible on Companies House but has been publicly announced by Begbies Traynor.

According to Harewood Associates’ last accounts for December 2018, the company owed £32.8 million at that time. If accurate, this makes Harewood the second biggest collapse of a company issuing unregulated bonds directly to the public in 2019, beating MJS Capital‘s £20 – 30 million (though dwarfed by the £230 million of London Capital & Finance).

Harewood Associates' David and Peter Kiely
Harewood directors Peter and David Kiely in less lean times

Harewood was fronted by David and Peter Kiely and was, according to its website (now offline), highly active in the community with charitable activities funded by investors’ money.

Harewood Associates was issuing unregulated investments to the public as early as January 2013, according to a Moneysavingexpert forum thread.

In 2016 Harewood Associates claimed on their website that they did not require FCA authorisation to promote investments to the public as they were property related.

Are we FCA regulated and is investment covered by the FSCS? [sic]
No we are not FCA regulated. All our investments are property related and therefore the Law and Property Acts apply. As we only deal with our own property deals and do not sell or promote others we do not need FCA authorisation.

Selling individual properties to an investor is indeed not covered by UK securities legislation.

Selling loan notes, however, most definitely is. On the same 2016 page in which they claimed not to require FCA authorisation, Harewood confirmed that their investments were “by way of a loan note arrangement secured against a share on a fixed asset”.

It was also made clear throughout that investors were investing money on the promise of a fixed return by Harewood, and not for the variable return of an individual property investment.

If any further confirmation is needed that investors were investing in Harewood and not property, one only has to look at Harewood’s last accounts.

Comically oversized banknotes donated to charity by comically oversized man.

Harewood’s 2018 accounts claimed the company had £4.5 million in net assets (assets minus liabilities), but made a £4.3 million loss in 2018, failing to even cover their gross cost of sales. As the accounts were unaudited, the accuracy of these figures will be uncertain until the administrators have provided further information.


In September 2017 the Telegraph warned investors of the risks of investing in Harewood, which at that point was offering up to 12% per year.

As early as February 2017 investors were complaining of not being paid on time, according to a complaint on Ripoff Report.

Meanwhile Harewood was merrily misleading its investors about the risks of investing in itself, with the usual wearily familiar spiels of misleading comparisons with FSCS-protected deposit rates, claiming that secured loans can’t go wrong, and claiming that past performance is a guide to the future.

The banks are paying between 2% and 3% interest on your savings.

Take action and secure a better return on your savings.

Nearly all other investments offering such an attractive return are subject to fluctuation. The fixed return option from Harewood offers a predictable level of income.

The investment is secured on increasing value assets

We have a 100% track record in generating returns for our investors. Our team have developed in excess of 2000 residential properties and we have never sold a property at a loss.

Throughout the 9-year period in which Harewood offered unregulated investments to the public, of which at least 6 years were spent promoting investments in itself without FCA authorisation, resulting in over £30 million of capital now at risk, the Financial Conduct Authority did… the usual. Not even a warning about Harewood Associates appears on the FCA register.

Exactly what caused administrators to be called in has not yet been revealed. The administrators confirm that Harewood investors cannot be paid and the prospects for recovery are not known.

We are aware that a number of fixed period investments were due to have matured on 1st June 2019. Unfortunately the Company’s insolvency means that no investments can be repaid on their due dates. We are not yet in a position to advise investors as to what monies, if any, they may recover in due course.

The administrators have asked investors not to contact them directly as they cannot cope with the volume of enquiries.

Due to the volume of enquiries being received in relation to this matter we are unfortunately unable to speak to investors individually as this would prevent us from performing our duties.

As always we’ll bring you more as and when the administrators release updates.