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statement from harlequin to money box

Below is the statement released on 30 April by Harlequin Management Services in response to criticisms made during a BBC Radio Four Money Box broadcast…

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Harlequin Management Services (South East) Limited, trading as Harlequin Property, is the sales arm of the overseas development companies.  It engages a number of external sales agents to sell the properties directly to the public in return for commission.

As a result of negative press and anonymous defamatory websites, sales have fallen in recent months and it has become clear that the business requires restructuring in order to continue.

At the same time, Harlequin is actively seeking external finance in order to increase the speed of construction in the Caribbean, which will generate further income through completions going forward. This should have a positive effect for all purchasers and should not be perceived as a negative step.

To be very clear, this news does not affect any of the Caribbean resorts where clients have purchased.

Put bluntly: our clients’ investments are unaffected, and Harlequin will continue to develop its hotels and build investors’ properties.

There are two key goals in entering Harlequin Property into administration: securing and rescuing the company and protecting our creditors’ interests. It is a necessary action that is in everyone’s best interests.

In addition to newsletters, blogs and mass emails, not to mention representatives contactable by email and telephone, numerous open day events are hosted throughout the year that all agents, investors and potential investors are invited to attend.

At these events, full information and updates are provided and almost all feature a Q&A session with Dave Ames.

Just recently, Harlequin finally received full planning permission for The Merricks Resort development in Barbados, which has come after several years of earnest work.

That said, it is essential to remember that Harlequin has opened two successful Caribbean hotels. Buccament Bay Resort is open and trading very successfully as a luxury resort. It was recently awarded “Caribbean’s Leading New Hotel 2012” and “St Vincent and the Grenadines’ Leading Spa Resort 2012” at the World Travel Awards, and was consequently nominated for “World’s Leading New Hotel 2012”.

Buccament  Bay Resort sets the benchmark for which other Harlequin resorts seek to follow. Equally, blu, St Lucia has a growing reputation and we are seeing considerable increases in bookings for the coming year.

Harlequin categorically denies that all investors have fractional ownership of units at Buccament Bay Resort, nor has the company ever informed all investors of such a fallacy.

Purchasers have contracts to purchase individual properties within a number of resorts that are being developed.  Harlequin is not regulated to sell fractional units, as this could be classed as an unregulated collective investment scheme.

Most purchasers have provided a 30% deposit, on the basis that the property will be transferred to them on completion in return for the remaining balance.

A number of purchasers have recently mentioned their wish to combine their investments into one unit in a joint agreement, and Harlequin  is currently consulting with its regulatory solicitors to ensure that this complies with the relevant legislation.

Due to changing circumstances in the current economic climate, some purchasers have found themselves unable to provide the remaining 70%, which has resulted in such an idea being contemplated.

Harlequin has not made a conscious decision to fund much of its development through SIPP investment; this was a natural trend brought about by the economic downturn.

Prior to 2009, the vast majority of purchasers invested using their own private finances. Harlequin believes that poor pension performance, accompanied by widespread media coverage, led to many purchasers electing to take greater control over how their pensions were invested.

A number of SIPP companies have considered the Harlequin product and assessed it to be suitable for SIPP investment.  IFAs have therefore introduced the overseas properties to their clients.

SFO

Harlequin believes it has acted honestly throughout and welcomes the opportunity to address any concerns that have been raised with the SFO.

Harlequin is aware that those against whom it is currently engaged in a court case have made complaints to the authorities; in fact, Harlequin twice contacted the SFO prior to the investigation in 2012 and 2013 and offered to answer any queries or concerns, following what was then an anonymous defamatory campaign (since exposed and being sued by Harlequin) which initially raised allegations.

The basis of those complaints are completely unfounded, and a self-serving attempt by individuals to bring about an abrupt end to the legal action currently in progress against them. It now gives us the opportunity of clearing our name.

FSA request

The request for information from SIPP providers is merely a fact finding exercise by the FSA to ensure that IFAs are complying with their professional requirements.

Similarly, the alert, which was written with Harlequin’s assistance, was a reminder to IFAs to carry out their due diligence in light of the emergence of a very popular product.

This is a typical approach taken by the FSA across many products, and is no reflection on Harlequin.  In fact, Harlequin published its own guidance to IFAs on its website prior to publication of the FSA alert.

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