High Street GRP Ltd – News

High Street Group logo

When Safe Or Scam took over the bondreview site there was one condition. We had to agree not to publish any articles about High Street GRP or any of its subsidiaries on this site.

We won’t go into the reasons because it was before our time, it’s none of our business and we aren’t particularly interested in what happened previously. We agreed because that was the deal, but now that High Street GRP is in administration we will re-publish the articles which were published by the original owner.

They’ll be out of date of course because things have moved on. We recommend that anyone interested in High Street GRP Ltd or any of the High Street Group subsidiary companies, of which there are around 100, visit the Safe Or Scam blog page because we refused to allow Safe Or Scam to be subject to the same gagging deal which prevented bondreview from publishing articles. We agreed that we would honour the bondreview agreement for this website, but Safe Or Scam will never be gagged.

If you want to make comments on articles then bondreview is the place to make them. The Safe Or Scam site allows comments, but it’s not really what we do. We like to focus on investigations, scam alerts and recovery actions.

Here’s a link to a Safe Or Scam article about the HSG administration published on 23rd March 2022.

It’s worth a read because the administration is a lesson in misdirection and non-disclosure. Another article was published on 24th March 2022 as more things came to light.

Over the next few days we will re-publish those original HSG articles on this site and they will be open for comment.

Recent Articles by Safe Or Scam

The following is a list of articles which have been published on the blog page of the Safe Or Scam website in the public interest.

Safe Or Scam Category: Follow-On-Frauds (aka Recovery Room Scams)

These are where victims of scams are approached by a party which promises they can recover some or all of the money lost in a scam. The approach always results in the victim being asked to pay more money.

BURLINGTON CAPITAL HOLDINGS

STERLING HOLDINGS

GLOBAL INSOLVENCY SOLUTIONS

KINGSGATE INSOLVENCY

PAUL DONOFRIO

ALASTAIR DOBBIE / NICO BRUYNIKS / ROBERTO PANCALDI / GIAN LUCA FETTA

LODORE

REDSTART INVESTMENTS

TEXPARK LONDON / TEXPARK INVESTMENTS

Safe Or Scam Category: Articles on Companies

FESTIVAL HOTELS GROUP – a spin-off from the Shepherd Cox Hotels scam.

MERGER MASTERS INTERNATIONAL – a share scam.

HIGH STREET GROUP – a bond scam. Now in administration. The previous operator of bondreview was restricted from publishing any articles on High Street Group, but Safe Or Scam has published several articles.

RENOVARE FUELS – run by two men who established the Solari scam and who also run Teysha Technologies and Nextgen Nano.

PROJECT RF-1 – run by the same two men who established the Solari scam and who also run Teysha Technologies and Nextgen Nano..

STRATXMARKETS / ROSS ST CLAIR – a binary option scam (see ‘SCAM TRACKERS VIDEO below. A victim of the STRATXMARKETS scam is producing videos describing his experience).

HARLEY STREET PROPERTY CLUB – run by a serial scammer and his wife.

Safe Or Scam Category: General Information

SERIOUS FRAUD OFFICE – opinion that the SFO is taking more of an interest in high profile unregulated investment scams.

MONEY MULES – an initiative to expose and target the people who establish or participate in money mule activities.

SCAM TRACKERS VIDEOS – a new initiative to give victims of scams an opportunity to publish videos on their experiences. See this Youtube Link. Any victim of a scam is invited to produce their own video story.

ESSEX AND LONDON PROPERTIES – an update on the criminal case being heard against six men who established or participated in the scam.

JAMES MOORE SENTENCED TO 11 YEARS – an update on serial scammer James Moore who received an 11 year sentence in the USA.

WHATSAPP SCAM – a record of an unsolicited whatsapp communication where a scammer pretends to be a family member who needs money to be sent to cover a fake debt.

FRE Plc – An Investor’s Story

This article has been written by a bondholder in FRE Plc . The opinions expressed in this article are those of the investor. She has taken it upon herself to form a Facebook Group for FRE bondholders which can be accessed via this LINK. https://www.facebook.com/groups/freplcbondholdersforum

In October 1992 I lost my 9 year old, diabetic son to a sudden, devastating hypoglycaemic attack, in the bathtub of our home. My 11 year old daughter found him floating face down in the bathtub,  I knew half of me had died and my girl had lost the only other family she has in this country, apart from me. 

In September 2013, she and her partner had their first baby girl, beautiful and perfect in every way, and 2 years later another daughter just as precious. I knew that I would spend the rest of my life trying to ensure that their lives would be happy, safe and free of the fear and worries I had experienced as a single mother. Tragically it would not prove that simple. Just 2 years later their eldest  was diagnosed with Type 1 Diabetes. Suddenly my daughter was stepping into my shoes: a poor single mother, living in a tower block full of junkies and alcoholics, working full-time for a low income. She split up with her partner and I was the only other family she had.

So, when my mother died and I inherited some money, I redeemed the small mortgage on the home I share with my partner, and committed the remainder to an investment in FRE Plc to secure my daughter and the children’s future, while helping to safeguard their planet’s climate.  I am passionate about supporting ethical issues and investing in what I believed was an ethical and safe investment. I searched the Internet, using Ecosia – the search engine that plants trees – and at last found a company that fitted the bill: ethical, environmentally beneficial, offering a good return to borrow money to develop onshore wind power in the UK and reduce reliance on Fossil Fuels!  I researched the company’s background and looked at their filings on Companies House. I was no expert but I tried to make sure what I was buying was as safe as I could make it. Yes, there is always an element of risk, but wind power – they explained – was subsidised by the Feed in Tariff, and so guaranteed by the UK Government. Besides – they added – even if anything should go wrong and the Company should go into administration, Bondholders have “first charge” and so would get their investment back from the sale of the wind turbine sites before any other creditors.

The charming saleswoman assured me that, as FRE was busy re-powering some of its sites, installing more powerful turbines where permits allowed it, these would increase in value, over the following years, generating more revenue than ever and securing the long term future of Bondholders’ investment. It was the answer to my prayers! I was told that, as someone they considered to be “a high net worth individual” – by dint of the sum I had inherited – I would be accepted on Phase 4 investment. As the money came into my possession, between 2018 and 2019, I retired, because my health had taken a dip, and I elected to dedicate my time and energy to childcare, to free my daughter from expensive after-school fees.

It was then that I paid FRE Plc. well in excess of £100,000, feeling that at last I could sleep easy at night, knowing that soon I could help her buy a home, so she would no longer have to pay rent, or feel afraid in her own home.  For a while the interest came in, punctually, until May this year (2021), when my hopes were shattered by an email that was like a bolt out of the blue. After a lengthy explanation it announced that:

It is with great disappointment we must inform you that, in light of these developments in our sale process, it is now clear that there will be, in all likelihood, a deficiency in our asset value when compared to our Bondholder obligations regardless of the outcome of this exercise. It is this impact we write to you today to seek your own approval on the way forward.

In the interim we have halted payment of interest on your Bonds in order to ensure we are not preferring any creditors under legal advice. This interest will continue to accrue and form part of any future claim you have in the portfolio.

The money my 92 year old mother had so carefully invested into her property, that she had held on to, even when she could have done with extra help and care, was now evaporating, leaving behind a fraction of the proceeds from her sacrifices and my well-intentioned investments. Meanwhile, those who had given their assurances disappeared. Both the salesperson and her manager had gone leaving behind the founder, a man with 31 Directorships under his belt – who had proved inept at best and possibly fraudulent at worst.

I have hardly slept a single night, since then and curse myself for being so naive…  “If it looks too good to be true, it probably is!”  the words echo in my mind, and I feel devastated, hating myself for my naïveté.

Meanwhile men like these will be free to go on to destroy other lives like my girls’ and mine. They will not suffer because their wealth is beyond our reach and they will not even lose any sleep!

SAFE OR SCAM COMMENT – FRE PLC is currently attempting to force through a vote on restructuring. This is similar to other bond investments which have also recently claimed that investors have supported restructuring proposals after opaque, undemocratic and highly questionable voting processes. Our legal advisers have stated that they believe all bondholder restructuring outcomes are unlikely to be bind many classes of bondholders.

Why now ? Because the UK Government’s moratorium on the filing of winding up petitions ends on 30th September 2021. There is a rush to force through changes to Bond Instruments before bondholders can take recovery action against the companies. The FRE PLC vote is due to take place on 28th September 2021.

Bondreview in the Future

Brev has now stepped away from Bondreview and we wish him/her all the best for the future.

The site will now be managed by two independent volunteer moderators who support the Safe Or Scam effort to combat scams, but it will remain largely as it is now i.e a free information site allowing the public to comment on articles related to a range of investments.

All historical articles published by Brev will remain in place. The ‘Comments’ facility, which was disabled when Brev retired, will be reinstated to allow visitors to give their point of view. Please give us a week or so to transfer all the gubbings of the site (technical term) to our hosting provider. We will update users when that has completed and the site is fully operational once more.

The site name will change to reflect the fact that investment scams have moved on. Bonds are less prevalent nowadays since their promotion and sale is now captured under FCA regulations. It is not so easy for dodgy investments to use corporate bonds as an investment option. The new Bondreview will cover a wider range of scams and will seek to educate readers on the different scams in the market to raise awareness.

We intend to introduce a new facility where we will publish articles written by members of the public. There are investors who have undertaken their own research into the scams in which they invested and we will be happy to publish their findings. Please note that the articles would need to be backed by supporting evidence. We can’t just allow people to say “That guy Toby Forrest is scamming people”. If anyone would like to start the ball rolling with an article please contact us.

If any reader comes across an interesting article related to investment scams which they feel deserves wider publicity please send us a link and we’ll aim to publish it.

Now that “investigating investments” has become a FCA-regulated activity under recent legislation we would expect more investigation companies to install pop-up boxes requiring visitors to confirm their status by clicking a button to access content. The new Bondreview site will take those regulations into account in order to ensure compliance.

Bondreview.co.uk to be maintained by Safe or Scam

When I said farewell two months ago, my initial plan was to maintain the blog in a frozen state for a year, after which it would disappear off the air.

I have since had an offer from Safe or Scam to take over the domain and website, and have accepted. The transfer will take effect in the next few hours, after which my involvement with Bond Review will end.

Bond Review has always been until now a fully independent and disinterested source of coverage on the unregulated investment world, and I thought long and hard before accepting an offer from a commercial organisation, but the alternative was to allow the website to disappear after a year, after which the domain would have been available for anyone to jump on. I am grateful to Safe or Scam for ensuring that my coverage can remain as a useful resource to investors.

I may return to blogging one day but it won’t be under the “Brev” persona, so any posts on this website or under the name “Brev” after 23 July aren’t from me.

Stay sane.

-Brev (2017-2021)

Comments now closed

Slightly later than initially announced in my last post “Goodbye”, all articles have now been closed to comments.

I can continue to be contacted via the Contact link at the top of each page or via Twitter.

Thanks to all readers for their contributions.

Goodbye

Regular readers will probably have noticed that the output of Bond Review has continued to drop recently.

In the first year of Bond Review I reviewed over 60 investment schemes that were being promoted to the public; in the past 12 months I’ve reviewed a third of that number.

Although there are still far too many high risk investment schemes being promoted with impunity to the general public by search engines and social media, there are signs that the tide has lessened somewhat. When Bond Review was founded, there was a constant stream of people signing up for consumer finance forums asking whether London Capital and Finance was a safe investment. That is no longer the case, at least not to nearly the same extent.

In 2017 minibonds were mostly ignored by the press other than very occasional articles warning investors of the risks (and sometimes promoting them). They were also, as covered here extensively, completely ignored by the FCA. That is certainly no longer the case, with the collapse of London Capital and Finance (along with lesser schemes) hitting the mainstream press and the subject of Parliamentary enquiries.

But the main reason I am bringing the blog to a close is that I simply don’t have the time any more. Maintaining the trickle of bi-weekly articles (with regular lapses) has often meant staying up past midnight (and drinking too much wine) simply because it was the only hour in the day available. I have a full-time job, a family, a sports club to get back up off the ground after being shut down during the pandemic, and the blog. Something has to give.

I remain proud of what Bond Review has achieved. I know for a fact that as a result of my reviews, millions of pounds whose owners could not afford to lose them have been saved from high-risk investment schemes which subsequently collapsed. I know this because the people that ran them told me so in the course of their legal threats.

All I have done for three and a half years is to post the facts, and nothing but the facts, about the risks of unregulated investments, so that investors can make their own minds up. At times this meant my coverage was open to charges of being “anodyne” or “mealy-mouthed”, but it was sticking to what was verifiable and in the public domain that allowed me to stand behind my coverage for this long.

I considered going public with my identity but have nothing to gain from doing so. At least three different people have been identified as Brev by various idiots posting spam online. None of them are me.

I originally called this article “Indefinite hiatus” but then I remembered how annoying it was when I was reading webcomics twenty years ago and authors would forever be going on “hiatuses” (hiati?) that left you forever wondering whether they’d come back. So no hiatus, just an unambiguous goodbye, and an end to three and a half years that has often been stressful, draining, fascinating, heartbreaking and (emotionally) rewarding in equal measure.

Thanks to all the readers who have read this far. In the early weeks of writing Bond Review I got excited whenever my pageview count went up by 1 (and even more excited when it wasn’t from me). For many weeks posting articles felt like shouting at the bins. The stats, comments and messages of support all helped keep me going for as long as I have.

A special thanks to everyone who donated. If anyone feels they have been shortchanged by the sudden cancellation, get in touch via the Contact link above and I will happily refund any previous donations to their source. The handful of recurring donations to Bond Review have been cancelled at my end.

A final credit goes to Oz, the writer behind the website BehindMLM.com, which was a huge inspiration for Bond Review. If there are any readers of both they will have noticed a few similarities of style which are partly homage and partly lack of imagination on my part. It showed that it was possible to shine a light on an under-covered part of the financial world and keep it going in the teeth of concerted and relentless opposition. How Oz has kept it going for a decade (with a much higher output than I ever had) is beyond me.

Comments on all articles will be closed in a week on June 1st. I will continue to pay the hosting bill to keep Bond Review up for another year. It will then close for good on 25 May 2022.

I can continue to be contacted via the contact link above.

Have you thrown in the towel due to legal action?

When I started Bond Review I knew I needed to be prepared to stand up for myself in court, or there was no point in writing articles on this subject in the first place. A total of 13 different investment schemes have made legal threats to me. None of them have gone to court. Until today I had (unless memory fails me) withdrawn one solitary article from publication: a report on Blackmore Bonds‘ brief sponsorship of the Kent Police rugby team.

So any suggestion that I have been intimidated into shutting down the blog is a perfectly reasonable guess but incorrect.

Nor have I been paid off. I have never (despite offers) accepted money to remove any article from Bond Review, and never will.

A number of articles have been pulled from view today because keeping them up for another year is not worth the time and money it would require. This should not be misinterpreted as an admission that anything in them was false. I cannot comment further. There are special circumstances and anyone who thinks I might be persuaded to pull other articles for no reason (before the website closes) should save their breath.

High Street Group calls crunch meeting with investors, attempts to delay repayment

High Street Group logo

This article below was written by the previous owner of bondreview in May 2021. It is being published because now that High Street GRP Ltd is in administration it will be interesting to see whether or not the prophecies came true. This article is 11 months old so it will obviously have been overtaken by events later in 2021.

Safe Or Scam has written two articles on the High Street GRP Ltd administration on its blog page

May 2021 Article

An article from Business Live reveals that High Street Group has called a meeting with creditors in an attempt to delay repayment of its bonds.

The meetings relate to 7 year bonds issued by High Street Group, which I believe are the ones issued with an interest rate that started at 12% per year and escalated to 22% in the 7th year. Bondholders had the option to redeem their bond at each anniversary.

12% fixed annual return (bonuses available from the 2nd year).

Flexible 1 – 7 year investment period.

All funds secured against significant unencumbered assets.

Debenture and Corporate Guarantee held by an FCA regulated Security Trustee.

No exit fees or hidden costs such as stamp duty, legal fees, service charge, ground rent and general maintenance.

Exit option every 12 months.

The money will be provided for acquisitions for the High Street Group – thehighstreetgroup.com/ – funds are used for multiple projects, this is yet another security in place as you are backed by all the assets values, not just one.

2019 third party introducer promotion for High Street Group’s unregulated 7 year bonds. Typos as per the original.

According to Business Live, High Street Group is seeking to renege on that “exit option” to redeem the bond at each anniversary. It warns that if investors do not agree, the company could collapse.

It is asking investors to scrap a condition that allows them to redeem investment before the end of a seven-year bond, and warns that if it fails to get approval, it could have to review the company’s ability to continue as a ‘going concern’.

I believe these particular 12%-22%pa terms were first offered by HSG in 2019. That would mean investors are effectively being asked to defer the right to repayment from 2020 to 2026 – a dramatic change to what investors signed up for. We can call the right to redeem in 2020 “early” redemption, despite its introducers using the word “flexible”, but in the end investors either have the right to demand their money back or they don’t.

Naturally, even if HSG’s creditors do all defer their right to 2026, there remains the same inherent risk of up to 100% loss that exists with any loan to an unregulated, unlisted company, only with five extra years of waiting.

The Business Live article refers to investors as “shareholders” – but as far as I’m aware the investments in question were structured as loans, not shares. Indeed, the promotion above specifically referred to “loan notes” and to a “debenture [another name for a loan] and corporate guarantee”.

According to High Street Group, 50% of investors have already agreed to the new terms.

It is however important to note that a majority of High Street Group’s creditors agreeing to defer payment has, in itself, no effect on the right of other creditors to enforce their debt.

For creditors to be able to vote on a renegotiation which affects all creditors generally requires a formal insolvency procedure, such as a Company Voluntary Arrangement or administration. All such options involve the apppointment of insolvency practitioners. High Street Group as a whole continues to trade and is not in administration (though a subsidiary, High Street Rooftop, is).

So High Street Group can call as many meetings with its creditors as it likes, but any of its creditors whose loans have fallen due will retain that right, unless a) they individually give it up or b) the company enters a formal insolvency proceeding. Unless there’s something very specific in the terms of the loans giving the company the right to change them.

In attempting to persuade investors to give up their right to flexible redemption on the bond anniversary, High Street Group attempts to compare itself with mainstream regulated commercial property funds.

This measure is not unusual, in fact during the pandemic the FCA gave permission for investment firms to pause redemptions in order to maintain the viability of the sector.

What HSG are referring to here are open-ended commercial property funds which, in benign circumstances, allow investors to redeem their investment on a daily basis (as it stands; the FCA is running a consultation into whether they should have a notice period). This is a far cry from HSG’s unregulated bonds which would only be redeemable annually even in the best of times.

Clearly, a fund holding illiquid commercial properties cannot meet sale requests within 24 hours if more investors want to get their money out than the fund has in cash in the bank. When this happens, open-ended commercial property funds suspend withdrawals, typically for months to give themselves time to sell properties without a fire sale.

They did not, as HSG claim, require FCA permission to do so. In reality, it is mandatory for an open-ended commercial property to fund when it has more withdrawal requests than cash on hand. This not only happened during the 2020 coronavirus crash, but in the 2016 Brexit crash and the 2007 commercial property crash before that. It is an inherent and normal feature of investing in an illiquid asset via a fund that commits to allowing you to cash out at the Net Asset Value of the properties. (In contrast to “closed-ended” funds, such as Real Estate Investment Trusts (REITs), where you can usually cash out via the stock exchange even in times of crisis, but only if you accept a substantial discount to the Net Asset Value.)

HSG’s attempt to compare itself with mainstream commercial property funds is not flattering to HSG. Most open-ended commercial property funds, having universally closed en masse during lockdown, have since re-opened. Some have already recovered the falls in value during the pandemic. Of the two I can name that remain closed, one plans to open by the end of June (Aegon) and another has announced that it will be wound up (Aviva) – but has said it intends to return 40% of the fund to investors by July, with the rest to follow within a couple of years as it sells properties.

Which, while highly disappointing to Aviva investors, is more transparent than the 5-year timeframe for any returns that HSG investors are looking at, with the inherent risk of 100% loss remaining that comes with any loan to an unregulated company.

But mainstream regulated funds don’t promise returns of 22% per year if you stick with them for 7 years (with an average return of c. 17%pa over the 7 years), so here we are.

“Accounts due soon”

The Business Live article understates High Street Group’s difficulties in complying with the law when it refers to “a number of accounts being filed late”. It later states inaccurately “High Street Group’s 2019 accounts are five months overdue”. The December 2018 and December 2019 accounts for High Street Commercial Finance, one of the companies that has raised money from bondholders, have never been filed at time of writing (not filed is different from filed late). The December 2018 accounts are a year and a half overdue. The holding company, High Street Grp, is five months overdue with its December 2019 accounts (having finally filed the December 2018 accounts, which received an adverse opinion from its auditors). From the perspective of investors who loaned it their money, High Street Commercial Finance Ltd = High Street Group. HSCF is also five months overdue with its latest confirmation statement (details of who owns the company).

According to Business Live “it is believed publication [of the accounts] is due soon”. How soon and who believes this is not specified.

High Street Group continues to blame the Covid pandemic for its issues.

The company said in February that it had suffered difficulties after the Financial Conduct Authority (FCA) allowed investment groups to suspend lending during the coronavirus pandemic.

This overlooks the fact that High Street Group’s issues with filing accounts started in September 2019, when it fell overdue with the 2018 accounts for High Street Commercial Finance, when Covid was just a twinkle in a pangolin’s eye.

There are a number of comments under my original review referring to problems obtaining repayment from HSG. The first of those explicitly referring to HSG delaying repayment was in November 2019.

Some months before that, investors had referred to being offered repayment in shares rather than cash. A company confident in its growth prospects (which is certainly the case for HSG based on its investment literature) only offers to repay investors in shares if it is short of cash. Otherwise the shareholders would keep their shares and the rising value of them for themselves. Again, all this was months before Covid hit the UK in earnest.

According to the Business Live article, High Street Group has announced a £172 million deal with the Edmond de Rothschild Real Estate Investment Management group.

No details are provided in the article as to how much of these funds will be available to repay HSG bondholders.

Buy2LetCars investors invested in cars which didn’t exist, administrators confirm

buy2letcars logo

The administrators of Buy2LetCars (comprising Raedex Consortium aka Wheels4Sure, Buy 2 Let Cars and Rent 2 Own Cars) have released their initial report.

The report reveals that of out of every 6 cars invested in by Buy2LetCars investors, 5 didn’t exist.

The total number of known loan agreements is 3,609, relating to 834 investors.. However, the number of vehicles held by the Group is 596, i.e. there are more loans than vehicles.

The prospect held out by Buy2LetCars was always that each investor would be investing in an individual car which would be leased out and used to pay their return, and could be sold if the lessee stopped paying.

A funder will simply loan us a lump sum of capital, and with that money we will purchase a brand new car and then lease it out through our sister company Wheels4Sure.

We also ensure your asset is protected by using state of the art tracking and immobilisation technology inside every car.

Buy2LetCars website in January 2021

According to the administrators, it seems that some cars were allocated to more than one investor. Other investors had no car allocated to them at all.

The Joint Administrators are undertaking an exercise to review B2L’s records and allocate each investment to a category based on the signed documentation within the records. This exercise has also revealed that some vehicle registration numbers have been referred to in more than one loan agreement.

Significant amounts of time have been spent on this exercise and it is clear therefore that a large proportion of investors do not have a vehicle allocated to their investment.

Investors who were unlucky enough to hand their money to Buy2LetCars after the FCA had already effectively shut down the scheme by removing their permission to lease new vehicles (although it turns out that this was only a symbolic gesture, as Buy2LetCars wasn’t leasing new vehicles for 5 out of 6 investments anyway) have “queried the treatment of those receipts” (i.e. asked if their money is ringfenced or lumped in with everyone else’s). The administrators will be taking legal advice on this point.

Recovery prospects

A total of £48 million was taken in from Buy2LetCars investors. (A small amount is also owed by B2L to the taxpayer and associated companies.)

£902,000 in cash has been recovered so far. The administrators expect to realise £4.2 million from selling the vehicles and around £400k from the lessees.

The B2L entity to which investors loaned money is in turn owed £31.3 million by Rent 2 Own Cars, also part of the administration. £24m is in turn owed by Raedex to Rent 2 Own Cars. (The administrators’ statements of affairs contain a typo in which R2O is said to be owed £24m by itself. The earlier summary states the correct position.) Prospects of a return from these intercompany debts are currently unclear.

The directors of Buy2LetCars (Reginald Larry-Cole and Scott Martin) owe a total of £804,000 to the group in directors’ loans. The administrators say it is unclear how much will be recovered.

The administrators are also trying to establish who owns a Rolls-Royce that somebody was apparently swanking around in. Even though a business with a couple of million in turnover at most and continual losses doesn’t exactly scream “Rolls Royce lifestyle”.

No figure has yet been put by the administrators on potential recoveries for investors.

Although the investment scheme was unregulated, Raedex was regulated by the FCA, as it had to be in order to lease vehicles to customers. The Financial Services Compensation Scheme is remaining tight-lipped on whether this is enough to dump yet another bill on the general public for the UK regulatory system’s failure to stop unregulated investment schemes being promoted to them. Following the recent bills for London Capital and Finance, Basset & Gold etc etc etc.

As at the date of the 2020 balance sheet, £40.4 million had been lent by investors, on which Buy2LetCars committed to pay 7 – 11%. That required B2LC to generate at least £2.8 million in annual earnings on top of the cost of running the business and bad debts, if it was to meet its obligations.

In that year, Raedex, which was the company responsible for leasing out the vehicles, generated a turnover of just £1.5 million (before any costs had been deducted). But this is hardly a surprise at this point given Buy2LetCars had only 596 cars across 3,609 investors.

This was naturally not disclosed to investors. Despite running an investment scheme promoted extensively to the public, and claiming “we are fully transparent about our business” on its website pitch to investors, UK company law allowed Buy2LetCars to withhold its profit and loss accounts from Companies House using “small company” exemptions. They have only now been published in the administrators’ report.

The administrators note that a Serious Fraud Office investigation is underway but that this is separate to their own attempts to maximise returns for creditors.

Astute Capital hit by FCA warning, still being promoted on Facebook

Astute Capital logo

The Financial Conduct Authority has posted a warning about Astute Capital, whose bonds were reviewed here in March 2019. A search for Astute Capital on the FCA register now brings up:

This is an unauthorised firm that may be providing financial services or products in the UK without our permission. If you deal with unauthorised firms you will have less protection if things go wrong.

along with details of what to do if investors think they have been scammed.

What to do if you think you’ve been scammed?

It can be easy to fall for a scam – the people that run them are skilled at persuading their targets to part with money. If you think you have been contacted about a scam or have paid money to fraudsters there are steps you can take to protect yourself.

Exactly what regulated financial services the FCA think Astute Capital is carrying out is currently unclear. Astute Capital’s main business is commercial lending, which does not require authorisation for the FCA. Astute Capital has raised money from investors via bonds listed on the Euronext, Vienna and Frankfurt Stock Exchanges. That does not require authorisation from the FCA either.

I was unable to find a current trading price for Astute Capital bonds on any of these exchanges, suggesting the bonds remain illiquid.

In 2019 Astute Capital promoted its bonds directly to the public via Google ads.

Astute Capital Google ad

That did require authoristion from the FCA – and as Astute didn’t have that itself, it would have needed a third party to sign off the ads (Section 21 authorisation). But that was back in 2019 so it seems unlikely that it has anything to do with the FCA’s warning. But it took them 5 years to issue a warning against Asset Life plc so who knows.

In interim accounts for 2019, Astute Capital stated that it had terminated all relationships with unregulated introducers.

Yeah, totally can’t read that at all.

Despite this, Astute Capital is being promoted on Facebook by a third party unregulated introducer called “IPB”, in bizarre ads which sort-of but-don’t-really-at-all obscure Astute’s name.

Who is behind IPB is unclear as no ownership details are provided on its Facebook page. Similarly unclear is why IPB are promoting Astute after they claimed to have stopped taking money via introducers.

Astute Capital funds are on-lent to Astute Capital Advisors Limited, which recently published accounts for March 2020, showing it to be £6.9 million in the red with a loss of £3.5 million. The company stated that it believed the company was nonetheless a going concern and attributed its losses to the young age of the company.

In Astute Capital plc’s accounts, the directors stated that they expect ACA to generate returns of at least 30% per year, plus profit shares.

The average forecasted returns for ACA on its loan book is circa 30% per annum, plus profit shares structured by way of minimum earning written in the loan documents and should be taken into consideration when assessing ACA alongside interest earnings.

As of March 2020 Astute Capital plc had taken in £20.2 million of investor money, according to its published accounts.

Astute Capital previously stated that it was hoping to obtain FCA registration in 2020. Instead all the company has managed to obtain from the FCA is a public warning.