More than 6,000 pension savers invested around £400m into the unregulated property scheme via financial advisers. The scheme, run by Harlequin, promised ‘guaranteed returns’ of 10% a year based on building luxury villas in the Caribbean and other exotic locations, which never materialised.
It ran into trouble in 2013 when after the Financial Conduct Authority (FCA) issued several warnings, while the Serious Fraud Office is looking into the fund amid several legal cases.
Insolvency notice
David Ames, chairman of the Harlequin group, has declared the company, Harlequin Property SVG, which owns the land associated with the scheme, should be made insolvent in Saint Vincent and the Grenadines, where the company is based.
Ames is currently being investigated by Saint Vincent authorities for tax evasion and theft amounting of up to £2.3m.
Legal wrangling
However, a spokesperson for the company “categorically” denied it was filing for bankruptcy, explaining that it has lodged a “notice of intention” – a new procedure under St Vincent law which allows the company a grace period of up to six months to “sort out its business affairs” without fear of legal action.
The spokesperson claimed that Harlequin was forced to apply for the notice to stop the company being wound up following a petition lodged on Tuesday by Gareth Fatchett, partner at UK law firm Waterside Legal, which represents around 1,000 investors.
“Having failed in an attempt to reach an out of court settlement with Mr Fatchett and his clients, and in response to this threat to the business and the pensions/investments of thousands of Harlequin clients, Harlequin was forced to take advice and, after careful consideration, has decided to enter a Notice of Intention,” said Harlequin.
‘Long term antagonist’
Describing Fatchett as a “long term antagonist”, the company said it has “entered the procedure to protect the company, its thousands of investors, and its hundreds of employees”.
“Harlequin will not stand for threats by those seeking a preferential pay out for a tiny percentage of investors at the expense of thousands,” it added.
If Harlequin does go into liquidation that then the company’s land and hotel assets – including its flagship Buccament Bay and Merricks resorts – will be sold off, leaving thousands of investors facing serious losses.
FSCS Claims
The UK’s Financial Services Compensation Scheme (FSCS) has already picked up the tab of £100m to investors who received poor advice from financial advisers regarding investments in Harlequin, with many advisers being declared bankrupt after failing to cover client claims.
