The administrators of Krono Partners, Smith & Williamson, have filed their latest six-monthly update.
The preceding twelve months brought the revelation that a significant Krono player, Ulrik Debo, had been charged with securities fraud in the USA.
Criminal proceedings by the Securities and Exchange Commission are ongoing.
There is however no update on returns from the "Company Y" loan platform, on which the administrators are pinning their hopes of recoveries.
We last checked in with the Krono Partners administration a year ago. Krono Partners collapsed in March 2018 after raising money from investors supposedly for investment in distressed real estate and micro loans.
When Krono collapsed, almost all of the remaining money was dependent on a "Company Y" loan platform, which supposedly was going to raise funds for other projects and pay commission to Krono, in return for the money invested in it from Krono investors.
The administrators of Krono Partners have filed their latest update, a month after the first anniversary of Krono's administration.
Krono Partners launched in 2013 and offered unregulated seven-year bonds paying interest of 8% per year, supposedly from investing in distressed real estate in the United States and Europe. It then offered another series of bonds which would supposedly be used to invest in SME bridging loans.
The company went into administration in March 2018, supposedly as a result of bank accounts operated by Jade State Wealth being frozen.
This, it has since become clear, was only the tip of Krono's problems. Krono holds neither distressed real estate nor bridging loans. Instead over three quarters of its assets (according to the Statement of Affairs) consist of an investment registered in the Cayman Islands known as "Company X" which raises corporate finance via Exchange Traded Notes.
Throughout the period of administration, none of Krono's investments have paid any returns which could have been used to pay investors' returns of 8-10% per year, even if it hadn't gone into administration.
Krono Partners went into administration in September 2018. Unusually for an unregulated investment going into administration, its management claims there are more than sufficient assets to meet its debts, but after bank accounts operated for the company by Jade State Wealth were frozen, it became unable to maintain payments to investors.
The last update revealed that the repayment of investors’ funds was almost entirely dependent on a “Company X” operating an Exchange Traded Note platform, in which Krono had invested in return for a cut of any funds raised via that platform.
As at the latest update, filed by the administrators Smith & Williamson in April 2019, no such cuts have yet been received. Indeed the only funds recovered since the last update are £4,041 in cash in the bank.
Last month the administrators of Krono Partners, top-10 accountancy firm Smith & Williamson, published their initial report into the company.
Smith & Williamson was appointed after Krono Partners stopped paying interest on its bonds in March 2018. This was apparently due to bank accounts operated by Jade State Wealth, a subsidiary of Krono’s escrow partner Accounting Worx Limited, being frozen.
Why Krono Partners has been unable to find another payment administrator, if this was the only thing preventing it from making payments, and has had to undertake the dramatic (and expensive) step of going into administration, is not addressed by the administrators.
Krono Partners launched in 2013 and offered unregulated seven-year bonds paying interest of 8% per year, plus variable payments of 20% of the company's assets. Krono Partners aimed to generate returns by investing in distressed real estate in the United States and Europe.
In 2018, with the distressed asset bonds approaching their five year anniversary, Krono Partners issued a further series of bonds, this time offering 10% per year over five years. This time investors' money was to be used to invest in bridging finance for small and medium enterprises.
According to an investor on Moneysavingexpert.com, Krono Partners stopped paying interest in the beginning of 2018, still two years shy of the repayment date of its 2013 bonds.
A Companies House filing yesterday reveals that Krono Partners has gone into administration.