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What do I do with my wine?
The Tenon Group, the liquidators for City Vintners, Goldman Williams and other companies, are now informing clients of City and Goldman that their wine has now been released. investdrinks has received a number of enquiries from investors.similar to this:
'I have now received info from Tenon with regard the Wine held in London City Bond - 1996 Chateaux Margaux which is now free for us to do with what we want. I wonder if you could assist me in how to dispose of the case i.e. where to sell it through, what the value would be and how to get the best price for it, and whether to maybe keep it as I am not desperate for the money.'
investdrinks' advice is to keep it for at least 5 to 10 years in bond checking its value and then sell through a broker. Using wine-searcher.com will give an indication of current market prices. In time the gap between what it will fetch and what investors paid should narrow. Unfortunately now is not a good time to sell as the market is flat or, in some instances, has declined slightly.
New Bromley entrant: Bordeaux UK Ltd
Bordeaux UK is latest company to be offering claret as an investment at rather optimistic prices. The company was set up on 19th September 2002 and its registered office is SBS House, 244A High Street, Bromley. Its sole director is 23 year old Ian Vanderhook of Riverside Gardens, Bromley, and Gillian Vanderhook, also 23, is the company secretary. Bordeaux UK is currently offering 16 wines that range from 1998 Lafite-Rothschild at £1,600 (available from the Vintry at £1,220) to 1982 Mouton-Rothschild at £5,700 (available from Fine & Rare Wines for £4,176). Anyone buying a case of each of the 16 wines from Bordeaux UK would pay £12,915.19 more than from the cheapest current price available. On average Bordeaux UK's prices are 42% above the cheapest.
On 9th December investdrinks had an interesting conversation with Mr Vanderhook. We discussed the 'buy back price' option - the current Bordeaux UK trading prices less 10% on any gain made. This would appear not to be a guaranteed buy back but rather would be the price that Bordeaux UK were able to sell on that case with 10% commission on any profit. Vanderhook did stress that Bordeaux UK Ltd was a long-term venture - 'forever'. It is strange, therefore, that Bordeaux UK Ltd have no arrangement at present with any bonded warehouse. "We are looking at a number of options. I can't be too specific," said Vanderhook. The company allows itself a generous 60 days to buy the wine. "For the customers' protection," apparently. These days a brief phone to a broker suffices.
Vanderhook was kind enough to ask me "what would you do?" investdrinks advice is that Bordeaux UK ceases trading immediately until it has sorted out the basics of its business - bonded warehouse, prices at which investors have a reasonable chance of seeing a return etc.. As we are nearing Christmas I did not send Mr Vanderhook a large invoice for consultancy services.
Greater Bromley appears to be developing as a centre for claret investment. Firstly recently closed James Hewitt Associates, son of Liquid Acquisitions - based not far away in Elmers End - set up in East Street. Then Churchill Wines Ltd set up in Sundridge Park with Malcolm Hills, the ex-company secretary of JHA, as the sole director. Now Bordeaux UK in the centre of the town. investdrinks is sure that this must be pure coincidence, serendipity or perhaps as the French would say a question of terroir - suitable ground.
James Hewitt Associates wound up
James Hewitt Associates Ltd were wound up in London's High Court on 30th October. The DTI's petition to wind up in the public interest was unopposed. Adrian Francis, counsel for the DTI, described James Hewitt Associates as a "phoenix company" because it was the immediate successor with "minor differences" to Liquid Acquisitions Ltd, which was closed by the DTI in January 2002.
Winding up James Hewitt Associates Mr Registrar Baister said that "it was a successor company, or so close as to be immaterial, to Liquid Acquisitions and involved in the same sort of dishonest wine investment business."
The person at the Official Receiver now dealing with James Hewitt Associates Ltd is Cheryl Lambert, Senior Examiner, Public Interest Unit tel: 020-7637 6366, fax 020-7637 6390 or firstname.lastname@example.org. The creditors meeting has not yet been fixed but investdrinks understands that the Tenon Group (020-7628 0240), who are already liquidators for Boington & Fredericks, City Vintners, Goldman Williams and Liquid Acquisitions, are interested in becoming the liquidator for JHA. At present investdrinks is not aware of any other company that has expressed an interest but will post the names of any other contender that comes forward.
Churchill Wines Ltd
Malcolm Hills, who was company secretary to James Hewitt Associates until he resigned in August, is the sole director Churchill Wines Ltd, which trades from offices in Sunridge Park.
"I don't want to be tarred with the same brush as James Hewitt Associates," Hills told investdrinks. "I fell out with James Hewitt because I did not approve of his business methods." However, Churchill's brochure is virtually identical to that of James Hewitt Associates. Hills claims that he wrote the James Hewitt Associates brochure and so has copyright. Much of the Hewitt brochure, however, was identical to that of Liquid Acquisitions. Hills told investdrinks that he "only worked for Liquid Acquisitions briefly". Although prices charged by Churchill Wines are considerably lower than James Hewitt Associates, they are still on average 43% higher than the cheapest broker's price.
Hoffman Philips SL
Tony Hetherington reported in his Mail on Sunday advice column (27th October 2002) on a share company in Barcelona called Hoffman Philips SL The There appear to be similarities and links to companies like Union Partners (ex-Goldberg Kravitz) and Reichman Advisory. More on this next week. Meanwhile click on thisismoney.com/20021027/si54803.html for Tony Hetherington's report.
The Snout awards 'for industry'
Plans are well underway to introduce the Snout, a new award for purveyors of fine wine to investment scams. This award, which is certain to be keenly sought after, will be given to wine brokers and merchants who have admirably put business pragmatism before other considerations, such the general good reputation of the wine trade and the misery of misled investors, and continued to supply scam companies.
In order to qualify for this honour brokers will have to demonstrate consistency, so a snout will be awarded only to merchants and brokers who have supplied at least wine investment companies which have been wound up in the public interest. To further reward consistency there is no limit to the number of snouts that a broker may be awarded. Thus a broker who supplied City Vintners and Goldman Williams and who then went on to supply James Hewitt Associates Ltd will be eligible for a Snout and bar.
A Snout section is planned on investdrinks complete with the Snout certificates that have been awarded, the companies honoured and the wound up firms they supplied. Further in the future there may be glittering presentations where Snout brokers achievements can be recognised by their fellow brokers.
Raun's position: The Kumho BMW Championship 2002
From some reason the final events in the Kumbo Championships at Thruxton on 13th October were cancelled, so Raun was 8th out of 13 in the 2002 championship in the B class. investdrinks is sure that investors in City Vintners, Goldman Williams and other businesses will feel that this was a creditable performance. Whether it was money well spent is another matter.
Falling prices linked to stock market woes?
The recent trend for prices of a number of First Growths to decline underlines once again that the prices of fine wine is affected by economic conditions. Admittedly prices tend not to swing as violently as shares. Take the 1996s that have been widely touted by the claret. Of the top eight wines, only Lafite has gained in value since April 2002. Latour and Pétrus are still the same price, while Ausone, Cheval Blanc, Haut-Brion, Margaux and Mouton have all fallen - Cheval Blanc by as much as £200. See file showing price movements of 1996s.
A comparison of prices from Farr Vintners of seven top Bordeaux wines between September 1999 and October 2002 shows that some wines have shown good growth over the past 37 months, while in other cases investors would have been better off with a cash ISA account. See file showing price movements for vintages from 1959.
Lynton Guest and Aurora Menon - Now you're gone? Please get in touch!
For well over a year now The Official Receiver has been trying without success to contact Lynton Guest and Aurora Menon concerning Ashley White and Harley Fine Wine. Guest was a 60's pop star. He played keyboards on the hit single Everlasting Love. In the light of their disappearance Now You're Gone, one of the songs on Guest's 1970 LP Groupie Girl, seems strangely prophetic. investdrinks is happy to post the following message on behalf of the Official Receiver:
Ashley White Ltd & Harley Fine Wines Ltd
The Official Receiver requires the attendance of Ms Aurora Menon and Mr Lynton Guest at his offices in order to assist him with his investigations into the causes of failure of the above companies. The last time the Official Receiver was in contact with Mr Guest was in April 2001, shortly after his attendance regarding Ashley White Ltd. Despite numerous attempts to secure an interview regarding both companies with Ms Menon and a further interview with Mr Guest regarding Harley Fine Wines Ltd, the Official Receiver has not received a response. It appears that they may have left their last known address and have failed to leave a forwarding address or contact the Official Receiver advising him of their whereabouts.
The Official Receiver would like them to contact his offices on 020-7637 6414 and ask for Mr Versfeld who is the person dealing with these matters.'
New entrant - Churchill Wines Ltd
Churchill Wines Ltd is offering a pair of magnums (150cls) of 1982 Mouton Rothschild for £3,048. These are available from Berry Brothers & Rudd at £940.43 magnum, so £1,880.86 the pair. This is 62% cheaper than the 'investment' offered by Churchill. The sole director of the company is Malcolm Hills, who until he resigned this August, was company secretary of James Hewitt Associates Ltd.
James Hewitt Associates Ltd
Further to last week's notice, clients of JHA can contact Marc Symons on 020-7637 6372 or email@example.com at the Official Receiver.
Grenadan search warrants quashed
investdrinks understands that the search warrants issued for the SFO raids in Grenada (23rd June) were quashed on 3rd September. Apparently this was on a constitutional point and the Government has been allowed to appeal to the Constitutional Court and this will be heard in November. investdrinks also understands that no order has yet been made for any evidence seized in the raids to be returned and that Pricewaterhousecoopers are still in the Salisbury Merchant Bank.
A Danish connection - Salisbury - New Haven - Sheltons ApS
Dr Klaus Biedermann, an ex-member and ex-chairman of the Liechtenstein Banking Commission, is chief executive officer of the Salisbury Merchant Bank. He has been a shareholder and director of the New Haven Trust Company Ltd/ Treuhand AG in Liechtenstein since 1996. investdrinks understands that the company operates under a government license to conduct professional trust business and connected consulting. The company was formed in 1995 and its other director and shareholder is Mario Staggl. Staggl is also involved in the Salisbury Merchant Bank in Liechtenstein. investdrinks understands that New Haven has recently been awarded a "triple A" rating by the Liechtenstein Finance Authority following a full audit of the company by KPMG.
On 29th August 2002 the New Haven Trust Company Ltd set up the New Haven Trust A/S in Denmark. This is a newly incorporated professional services firm, which has purchased the business, Sheltons ApS, from the bankruptcy estate. New Haven Trust Company A/S will be based in Copenhagen and has a capital of ¤(Euro) 150,000. The directors are Mario Staggl and Francesca Silvani of Lancaster Gate, London. Silvani is based at Greaves & Associates, 16 Grosvenor Place, London SW1 and was a director of Clifford Silvani Ltd, but resigned on 21.6.1999. More recently she was a director of Artemis (GB) Ltd (16 Grosvenor Place), resigning on 31.5.02. Braedon Charles Clark (based in Copenhagen) was briefly a director of the company but resigned on 6th September - both from the Supervisory Board and Management Board. Clark was the sole member of the management board. As an APS, Danish company law requires that there are always three people on the supervisory board and at least one on the management board.
Sheltons ApS (owned by New Haven Trust AG, Liechtenstein) purchased Ned Shelton's business in early May 2002. Ned Shelton was neither a shareholder, director nor an employee of Sheltons ApS. Under New Haven's control, Sheltons ApS was declared bankrupt in August 2002, at the request of the director of Sheltons ApS, Scott Macaw. Scott Macaw now heads up New Haven's new Danish operation. Ned Shelton has no connection with New Haven in Denmark or Liechtenstein and now runs his own tax advisory company."
Before going bankrupt one of the activities of Sheltons, an international tax advisory firm based in Copenhagen, was to establish Danish holding companies. One of these companies was Executive Personnel ApS. This company was set up for Raun Austin.
Raun's progress: The Kumho BMW Championship 2002
Investors in the various wine and share companies will doubtless be pleased to learn that Raun Austin, who races in Class B, is now lying in 8th position in the championship following his fifth place in the race on 8th September at Snetterton. The next race is on September 29th at Mallory Park. According to the site 'the competitors are generally a lively mix of privateers, although a more costly, professional approach is taken by the well heeled'.
Further details from: barc.net/ch02202.htm.
James Hewitt Associates closed
Friday 13th lived up to its name for James Hewitt Associates Ltd when the Official Receiver shut the offices down on the morning of Friday 13th September. The DTI had presented a petition at the High Court without warning the day before and the Official Receiver was appointed as provisional liquidator.
James Hewitt Associates has always been Liquid Acquisitions Mark 2. Last autumn JHA fired up on LA's old premises in West Wickham just as Liquid Acquisitions Ltd ceased to trade following a petition from the DTI. From the beginning of 2002, JHA operated from 19a East Street, Bromley.
The petition will be heard in the High Court on 30th October. Clients of James Hewitt Associates, who want to find out about their wine, should either contact the Official Receiver on 020-7215 5000 or Ray Pearson at London Bridge Vaults (the bonded warehouse used by JHA) on 020-7407 3704.
Operation Jellybeans defendants in court
Three defendants (Wayne Fisher, Claude Greaves, Stephen Linsley) appeared in Southwark Crown Court on Friday 6th September for the preliminary hearing, which has been adjourned to 13th January 2003. All three pleaded not guilty to all charges. Greaves faces charges of evasion of VAT, false accounting and money laundering. The full trial is due to start at the beginning of February 2003.
After the hearing Claude Greaves told investdrinks that he had been successful in bringing an action against the Government of Grenada for acting improperly in closing down the Salisbury Merchant Bank in late June. Greaves said that on 3rd September the court had given a judgement in his favour and that the government had been given leave to appeal. He had brought the action to protect his business. Greaves was a director of the Salisbury Merchant Bank but it is understood that he resigned in early December 2001.
Greaves has stressed to investdrinks his advisory role. "I have never been in partnership with Mr Austin or any of his other companies. My role as a director of Salisbury Merchant Bank Ltd, was as nominee professional director and provided my services again as a professional taxation advisor and accountant."
In relation to the charges he faces, which are entirely unrelated to the Salisbury Merchant Bank and the claret web, Greaves commented that "picking on accountants is flavour of the month".
Decanter fine wine index: fall and rise
After a steady climb in the first half of 2002 to 118.96 in July, the Decanter Bordeaux Index fell back in August and September to 117.43 before rallying by 1.1. in October to 118.53. The index is based on the auction prices of the top wines of Bordeaux. It was reset to 100 in December 1996, so in the subsequent five years and nine months
Don't buy 1997s from James Hewitt
investdrinks hears that James Hewitt & Associates Ltd (Liquid Acquisitions Mark 2) are offering a six bottle case of Château Margaux 1997 for £1,312 as an investment. A full case of Margaux 1997 is available from a number of wine brokers for between £760 and £850 - winesearcher has the details. Robert Rolls is currently offering the keenest price at £760. This means that James Hewitt is charging 245% over the price from Robert Rolls. Furthermore 1997 is certainly not a vintage to invest in. It is a light, easy drinking year and was over-priced by the Bordeaux producers when it was released en primeur. James Hewitt usually recommend a ten year hold - 1997s should be drunk up with in ten years.
That James Hewitt Associates Ltd are offering 1997 Margaux as an investment and at such an outrageous price shows that they either know nothing about wine investment or that they are complete rip-off merchants.
The Wine Index
investdrinks has recently received several messages from putative clients of The Wine Index. Its sales force is attempting persuade potential clients that a Lafite-Rothschild 1996 is a good investment at £3,870 per case. As Lafite 1996 is available for between £2,000-£2,2000 a case elsewhere, this is rubbish. Nor should people buy Mouton-Rothschild 1996 at £2,300 a case from the Wine Index. Better to buy it elsewhere for £1,200 a case. Anyway the price of Mouton 1996 has barely moved over the past three years.
Salisbury Merchant Bank to be wound up by PWC
Fiske plc's references for Stanley Riebeck
On Tuesday 23rd July, the day of the global raids by the SFO, the Grenadan government took over the Salisbury Merchant Bank and its wholly owned subsidiaries: Hopkin Pierce & Co Ltd, Stanley Riebeck Corporation and Webster Cohen & Galombik. Anthony Boatswain, Grenada's finance minister, appointed PriceWaterhouseCoopers to freeze the bank's assets as well as an associated firm, Dolphin Trust Co Ltd.
investdrinks understands that it was the Salisbury Merchant Bank and its subsidiaries who bought shares, while the companies based in Barcelona (Reichman Advisory SL, Union Partners SL and Chapman Foster SL) acted as introducers of business to the Grenadan companies.
On 25th July PWC instructed London stockbroker's Fiske plc not to take any further instructions from Stanley Riebeck Corporation and its executives. Fiske plc was one of London companies who bought shares for the Salisbury Merchant Bank and its subsidiaries. Fiske are due to publish its interim results this week. "Recent developments are of considerable concern to us," Clive Harrison, the chief executive of Fiske Plc, told the Independent on Sunday. "We shall be very guided by what happens in the near future from the various authorities."
Fiske plc provided references to two banks for Stanley Riebeck. On 14th November 2001 Fiske wrote to the senior manager of business banking at Lloyds TSB in Jersey. 'We have been asked by Stanley Riebeck to explain our relationship and dealings with them.' The letter went on to explain that 'We have known Raun Austin for around six years in his capacity as a licensed dealer with companies operating in the same business as Stanley Riebeck does now. Fiske started dealing with Stanley Riebeck in July 1999, following completion of its due diligence in accordance with the requirements of the London Stock Exchange. Given the lack of trading history, we required a collateral deposit of £45,000, which was paid.'
The letter concluded: 'None of Stanley Riebeck's trades have ever been questioned by the regulator. We have no concerns with the way the account has been conducted and neither does our Compliance Officer.'
investdrinks understands that a draft of the letter was sent from Fiske to Raun Austin, who suggested some changes and asked 'can it be worded as above?'
Following a request in late August 2001 to open a third account at Lloyds TSB in Jersey for Hopkin Pierce & Co - the bank already had accounts for Stanley Riebeck Corporation and Webster Cohen & Galombik - the bank declined to open the new account without detailed information about the companies' activities. Raun Austin was told on October 2nd that Lloyds TSB would not open the new account and would cease the existing relationships. (Details posted 28th July 2002.)
Mr Harrison told the Independent on Sunday last week that Stanley Riebeck's business dealings with Fiske had been satisfactory, nor was Fiske told why Lloyds-TSB needed a reference. He claimed it was "very remiss" of the bank for failing to warn Fiske of its concerns. "The request from them was rather a bland one," he said. "If they'd specific concerns, I think personally they'd a duty to tell us... It could've been done on a purely confidential basis, so I'm a bit surprised."
Mr Harrison said Fiske regarded the bank's request for a reference as routine. "We were asked actually what we thought was quite a straightforward question... was their account being conducted correctly, to which the answer was yes." Lloyds TSB declined to comment to the Independent on Sunday about Mr Harrison's accusations.
The wording of the letter of 14th November suggests that the request to Fiske plc for a reference may have come from Stanley Riebeck rather than Lloyds TSB. It may perhaps have been a last ditch attempt to continue the existing relationships with Lloyds TSB in Jersey. It would have been more logical for Lloyds to ask for a reference between raising concerns about the new account on 29th August 2001 and declining to open an account on 2nd October. Nor does the letter from Fiske make any mention of a request from Lloyds TSB.
A very similar letter 'on behalf of Stanley Riebeck' was sent by Fiske on 16th November 2001 to the Royal Bank of Scotland International Ltd. Following the difficulties at Lloyds TSB, the Royal Bank was one of a number of banks in Jersey approached with a view to opening an account. It is understood that the bank declined.
The Financial Services Authority have told investdrinks that ''Raun Austin is not, and never has been, authorised under the Financial Services and Markets Act 2000 or the Financial Services Act 1986.' It may well be that Austin is a licensed dealer in countries outside the UK, for example the West Indies.
There is no suggestion of wrong-doing by Fiske plc, although their letters in support of Stanley Riebeck may have been a mite over-enthusiastic. investdrinks invited Fiske plc to comment.
SFO mount global raid on share net
On Tuesday 23rd and Wednesday 24th July, in a carefully planned and co-ordinated operation, the SFO raided 13 addresses in UK, Spain and Grenada in connection with their investigation into penny share and wine investment companies.
In association with the Metropolitan Police, the SFO searched four homes and three businesses in London on Tuesday morning and a residential address in Gloucestershire. Three business addresses in Grenada were also searched on Tuesday by the SFO with the Met and assistance from the Grenada police. On Tuesday evening the Met and with help from the Spanish police two business addresses in Barcelona were raided. Searches here continued into early Wednesday morning.
The SFO is investigating the following companies: City Vintners and Goldman Williams (both wine) and six share companies: Stanley Riebeck Corporation (Grenada), Webster Cohen & Galombik Inc (Grenada), Hopkin Pierce Ltd (Grenada), Union Partners SL (formerly Goldberg Kravitz SL), Reichman Advisory SL (Barcelona) and Chapman Foster SL. A number of these companies, such as Stanley Riebeck Corporation, Hopkin Pierce & Co Ltd, Webster Cohen & Galombik Inc, are wholly owned subsidiaries of the Salisbury Merchant Bank of Grenada. In reality all are an interconnected network of companies both selling shares and, in some cases acting as market makers. All of these companies are either run by or are associated with Raun Austin and Andrew Sommerville.
Austin has homes in London (a flat in Shad Thames overlooking Tower Bridge), Stanmore and Grenada, while Sommerville has homes in Cadogan Gardens, Chelsea, London and Ampney Crucis, a village near Circencester, Gloucestershire.
The share net companies either sell shares in companies such as, such as MV Sports, Einstein, Coffee Heaven, that have a listing on AIM or Ofex or act as market maker for unlisted shares, as in the case of CanCap Universal Entertainment Ltd. on 5th November 2001. There is no suggestion that MV Sports, Einstein and Coffee Heaven knew about the activities of the Salisbury Merchant Bank and its subsidiaries.
CanCap signed an agreement, governed by the laws of Grenada, with the Salisbury Merchant Bank appointing the bank as market maker for an annual fee of £20,000. Curiously a Mr Williams, who bought shares in CanCap, was charged stamp duty even though the prospectus states that 'no stamp duty or stamp duty reserve tax ("SDRT") will generally be payable on the issue of the Ordinary Shares.' Must have been an exception. Another company floated by the Salisbury Merchant Bank was a small chain of telephone shops in south London and the south east.
The share net also acquire or provide funding for blocks of shares. SMB undertook at acquire 100,000,000 "A" Ords shares in Texas Oil & Gas. Although TOGS shares are listed on Ofex, TOGS were carefully to point out that no application was being made to list the "A" Ords.
An account too far
At the end of August 2001 Lloyds TSB, St Helier, Jersey received a request to open an account in the name of Hopkin Pierce & Co Ltd. The account would have a turnover of around £12 million a year. The Stanley Riebeck Corporation and Webster Cohen & Galombik Inc, two subsidiaries of the Salisbury Merchant Bank, already had accounts with the St Helier branch.
'Because of the high turnover passing through the existing accounts and your indication of a turnover of £12 million on the new account', the Business Banking Manager sought reassurance - 'it is essential that we fully understand the business transactions'. He wanted to know about 'the nature of the three businesses, the relationship between each of them'. As the companies all deal in stock trading, could he have 'evidence and details of any membership of stock exchange, professional body or any licences held'.
Raun Austin had a meeting with officials from the bank in September 2001. In early October, however, Lloyds TSB's senior manager of business banking in Jersey, informed Austin that 'I am minded to decline to open any new accounts, and indeed to continue the existing relationships.' He explained that 'My major concern is that the Bank could suffer severe damage to its reputation and indeed possible litigation, if at some point in the future dispossessed investors who had been clients of yours became aware that their funds had passed through accounts held with ourselves.' Although there were subsequently several supportive letters from various sources sent and a further meeting with the TSB Lloyds in Jersey, by mid-November it was necessary to look for a new bank for these accounts.
The correspondence with Lloyds TSB shows clearly that Austin is the central figure in the share net with Sommerville providing both FSA approval and chartered accountant reassurance.
After the DTI successfully petitioned to have City Vintners and Goldman Williams closed in the public interest, they referred these wine and share companies to the SFO, who began an investigation in March 2002. This week's raids were to gather evidence and no arrests were made. David Jones, the SFO spokesman comments. "Big fraud cases usually involve looking for evidence overseas and this makes close co-operation between national agencies a pre-requisite in the fight against the international fraudster. Full credit to the authorities in Spain and in Grenada for the prompt assistance they gave on this investigation."
The Salisbury Merchant Bank of Grenada is understood to have ceased trading. Among the businesses believed to have been visited by the SFO on Tuesday was Titus Mirinda Ltd at The Old Fire Station, 140 Tabernacle Street, London EC2 4SR. Following the closure of the nearby offices in Roman House of City Vintners and Goldman Williams, Titus Mirinda is believed to have taken over the admin role for the share net that used to be carried out from there.
The Birches Company Ltd, run by Andrew Sommerville, approves the terms and conditions and material sent out by the share net companies. Incredibly it remains authorised to carry out investment business by the FSA (Frauds & Scams Approved?).
I was caught in a spider's web of share fraudsters, Tony Hetherington, Financial Mail on Sunday, July 28th 2002
In for a penny, in for a lousy deal, Severin Carrell & Jim Budd, Independent on Sunday, July 28th 2002
See also directory section for details on individual share net companies.
60's pop star Lynton Guest, the keyboard player on the hit single Everlasting Love, was the director of two wine investment companies closed down in the public interest by the DTI. 51 year old Guest of Napier Place, London W14 was the sole director of Ashley White Ltd closed in January 2001 and then, with his partner Aurora Menon, was a director of Harley Fine Wine, closed August 2001. Aurora Menon is now running Frazer & D'Ivoire, another wine investment operation. Frazer & D'Ivoire's letters and invoices contravene the Business names Act of 1985, while the terms and conditions contravene the Consumer Protection (Distance Selling) Regulations 2000.
Ashley White Ltd was closed because it failed to buy all the wine it sold and did have 'sufficient funds to support the business'. The Official Receiver estimates that Ashley White's debt is £111,000 and that it only bought wine worth £11,734 (4 cases of Margaux 1996, 3 cases Lafite 1996 and 6 magnums of Lafite 1996). No sign here of a case of Troplong Mondot 1995 that an investor bought in August 2000 for £840, available then for £320 from Seckford Wines. There were some 18 investors.
In the case of Harley Fine Wine the Official Receiver reports that no wine has ever been traced, although the company had £23,000 in the bank when it was closed with estimated debts of £5,000. The Receiver is aware of five investors, although there may be more. A Bordeaux consultant called Lara Miles worked for Harley Fine Wine and was based at 7a Cheniston Gardens, the home address of Guest and Menon. Lara Miles' signature is remarkably similar to that of Aurora Menon.
Guest joined the Love Affair in the summer of 1967. Everlasting Love was released in December and reached number one in January 1968. The band later admitted that they had not played on the record. After he left Love Affair, Guest formed English Rose and, in 1970, appeared in the film Groupie Girl. Subsequently Guest was a football writer for The Sunday Telegraph and is the co-author of three books on football, including For Love or Money.
Guest told investdrinks that "I was a director of Ashley White and HFW although I took no part in those companies' day to day operations, thus my knowledge is based on a review of all paperwork and interviews. The only reason Ashley White Ltd ceased to buy wine was because of precipitous and uncalled-for action by the Department of Trade. AW had no creditors. I have made a full rebuttal of all the DTI had to say. HFW was again subject to precipitous action by the DTI, the details of which were never supplied to me, except that it was based, not on any information specific to HFW but because its directors had been associated with AW. No suggestion has ever been put to me that HFW did not purchase wine and indeed it did so. HFW had no creditors at the time of the DTI action."
Guest appears to be unaware of his responsibilities as a company director - taking no interest in the companies' day to day operations does not absolve him of his responsibility. He was the sole director of Ashley White Ltd. Given the discrepancy between Guest's account and what has been found by the Official Receiver, it would be interesting to know what details of the wines allegedly bought were given to the Receiver by Guest.
Far from the DTI's action being 'precipitous' (sic - precipitate?), investdrinks welcomes their timely action before other investors were left empty handed.
Officially 35: Just two shopping days to go
Raun Austin will be 35 on Wednesday (10th July) when he celebrates his official birthday and his many friends* will surely have been scratching their heads wondering what gift to buy a man who already owns a stable of cars including several Ferraris and a BMW.
Raun's passion for fast cars seems undiminished as a recent report on an event at the Nurburgring shows. 'But there's simply nothing to beat the 'Ring for sheer excitement. F40-owner Raun Austin, at the Wheeltorque event with his Ferrari and his M3 racer, got out after his first lap spluttering "I thought I'd seen it all, but this - incredible." '
Although another Ferrari would rather clutter up the parking at Shad Thames, a more modest piece of Ferrari merchandise would doubtless be an acceptable birthday gift. The site scuderiaferrari.com has a wide range. As well as various T and polo shirts, what about a Red Scuderia Ferrari Cap for $US29.99? ('Red brushed canvas cap with embroidered Scuderia Ferrari logo on the front Yellow Ferrari script on a red strap Metal buckle adjustment. One size fits all. Free shipping to ANY destination in the world!! SF006.'). Or a Ferrari Logo Mouse Pad for $US14.99. Unfortunately the Ferrari F1-2001 Bath Towel at $US34.99 is currently sold out but the Ferrari Coffee Mug at $US19.99 is available in red, yellow and black.
Surely worth considering is the Scuderia Ferrari Barbie Doll a snip at $US74.99 especially as it's the officially licensed Scuderia Ferrari Barbie Doll, which comes 'complete with stand, Ferrari Cap, overalls with sponsor logos and helmet with movable visor. Great for children or as decoration in your Ferrari Model Car display!' Finally something humorous that Raun can take with him on his travels when visiting the share companies in Barcelona and Grenada: a Noddy face cloth $3.00 at geocities.com/Heartland/Woods/6401/sale.html.
According to Companies House records Austin has two other birthdays (10/7/61 and 28/7/61) - one more than the Queen
(*Whether the friends includes the 1450+ clients of City Vintners and Goldman Williams or the investors who have bought shares through the various companies associated with the Salisbury Merchant Bank of Grenada is not for investdrinks to comment on at this happy time.)
Aurora Menon - surfaces with Frazer & D'Ivoire
A visit to Suite 501, 223 Regent Street, London revealed, as suspected, that Aurora is running Frazer & D'Ivoire. She presumably is the Samantha who cold called a putative client to push wine investments. investdrinks' very strong advice is to ignore Ms Menon's blandishments and certainly not to send any money to the Frazer & D'Ivoire account with the Allaince & Leicester plc, London N1 0PN. Sort Code: 72.52.52. Account name: Frazer & D'Ivoire Ref: 217-204510-38.
Previously she was senior broker for Ashley White, closed by the DTI on 24th January 2001 because it only bought a small fraction of the wine it sold. Then she was a director of Harley Fine Wine Ltd, closed in the public interest by the DTI on 8th August 2001. Harley bought little or none of the wine it sold to investors.
Menon claims that 'Frazer & D'Ivoire has created a system to provide you with the maximum security and service'. On past performance she must mean 'maximum insecurity'.
The Birches Company - Andrew Sommerville still a Director - correction.
On 10th June investdrinks asked why The Birches Company was still authorised to carry out investment business as Catchensure Marketing Consultancy, the sole director according to Companies House, appointments had applied for a voluntary strike-off. Companies House records showed Andrew Sommerville resigning as a director on 20.11.2000.
However yesterday on checking the annual return, filed on 28.3.02, it transpires that Andrew Sommerville has not resigned. Today Companies House confirmed the error. Their records have now been corrected Angela Sommonville did resign on 20.11.2000, although this information was not submitted until 28.3.02.
The item on The Birches Company (posted 10th June 2002) has been deleted.
Claude Greaves - a Correction
On 20.5.02 investdrinks posted that Claude Greaves was no longer acting for Raun Austin. This is incorrect. 'For the record you misunderstood my letter, I still act for Mr Austin and will continue to do so as long until he is proved guilty of any crime, and for your information he has not been charged with any wrong doing.' (Claude Greaves - 5.6.02).
investdrinks apologises for this mistake and regrets any misunderstandings that this caused.
The Earl of Kimberley, a director of Salisbury Merchant Nominees Ltd, died on 12th May 2002. He was described by the Times (May 28th 2002) as a 'playboy peer who squandered much of his wealth and was six times married before he started to settle down'.
New entrant: Frazer & d'Ivoire
This appears to be a new wine investment company. It is based at Suite 501, International House, 223 Regents Street, London W1B 2QD. The company is not registered at Companies House, so whoever is running the company accepts unlimited liability. The wines are being offered at or below the market price: Lynch Bages 2000 for £550 and Lafite-Rothschild 1999 for £1,065. As Frazer & d'Ivoire pay insurance and storage charges for five years, it is difficult to see how the company can make a profit. Letters and information sent out by Frazer & d'Ivoire bear a close resemblance to those of Harley Fine Wine Ltd, which was closed last year by the DTI because they failed to buy the wine they sold.
Frazer & d'Ivoire bank with the Alliance & Leicester plc, London N1. The recent Press cuttings that are sent out by the company look shabby and poorly photocopied. Their terms and conditions fail to incorporate requirements of the Consumer Protection Act (Distance Selling) 2000.
Claude Greaves - Operation Jellybeans
The preparatory hearing into this case has been adjourned from 31st May until the morning of Friday 6th September at Southwark Crown Court. Claude Greaves has pleaded not guilty to the charges. There are three other defendants. For some unknown reason the Southwark Crown Court listings office refer to this case as Operation Jellybeans. Further details were posted 22.4.02.
Where are the customers' yachts?
The Independent on Sunday (2.6.02) carried a short profile of Raun Austin that gave some details of a works outing to the Monaco Grand Prix last year, as well as Austin's cars and property. Here are some further details:
As well as moving £2.2 million off-shore, in part apparently to a company in Denmark, without 'an adequate explanation of those payments', senior figures in City Vintners and Goldman enjoyed some lavish jamborees.
For instance last year some twenty, brokers and their partners, flew off to Nice in a private jet for the Monaco Grand Prix. The party, which included Raun Austin and David Jackson (general manager of Goldman Williams) left from Gatwick on Friday 25th May. Some of the party stayed at the Hotel Bristol, a three star hotel in the Rue Paganini close to the railway station. Others, including Raun Austin, were more palatially accommodated aboard Moonmaiden II in five staterooms. This 39 metre (128 feet) yacht was chartered from 23rd through to 28th May by Goldman Williams for $42,857. The fee did not include fuel, water, electricity or food and drink. There was an advance payment of $10,500 for this. The yacht, which can accommodate 10 guests and has a crew of 10, was moored near St-Jean-Cap-Ferrat. As well as three tenders Moonmaiden comes with a variety extras: a mini-moke car, two Honda scooters, two bikes, a Yamaha wave runner and a couple of windsurfers.
Doubtless investors, who paid through the nose for their wines, will be pleased to learn that a good time was had. The Saturday was passed 'at leisure' on Moonmaiden with a big night out in Nice. On race day the boat was moored near the track followed by a variety of parties during the evening. The only jarring note being that Austin was apparently refused entry onto Bernie Ecclestone's yacht. After a leisurely Monday, the group flew back to Gatwick in the evening.
The choice of the Monaco Grand Prix is no coincidence. Austin has a passion for cars, often with admirably discrete number plates. Indeed he could be described as a 'driven man'. He has two Ferraris and a BMW M5 (number plate: M5 FAT). One of the Ferraris (number plate: F40 WAD - as in wad of money) is kitted out for racing. investdrinks understands that Austin's company Stallion Monaco Ltd looks after the motors. The luxury flat at 50 Shad Thames that overlooks Tower Bridge is in the name of T.O.T.O. Ltd.
investdrinks has been informed by Claude Greaves of Greaves & Associates that he is now no longer acting for Raun Austin and that he is no longer the general manager or a director of the Salisbury Merchant Bank.
Further to last week's posting about the Birches Company and various companies based in Grenada and Barcelona, investdrinks looks at Monticello plc for whom Andrew Conyers Sommerville (DOB: March 23rd 1938) is both a director and company secretary. He was appointed as a director and company secretary on 19.10.1999. Sommerville resigned as company secretary on 6.4.2001 and was reappointed on 20.6.2001.
'DTI investigates Monticello chief over stock ramping claims' reported Stephen Foley in The Independent (11th February 2002). Foley reported that Mark O'Hanlon (DOB: 19.2.1961), then chief executive of Monticello plc (an internet incubator fund popular among private investors and day traders), had made a highly optimistic forecast about the future value of Monticello shares. In January 2000 O'Hanlon told the now defunct uk-iNvest.com that the share price could be between £5 to £7 each by June. O'Hanlon also predicted that the company would make 50 investments within three months and would soon move from Ofex to AIM. O'Hanlon's remarks were made at the height of the dot.com bubble.
Following the interview, trading of Monticello shares were suspended on 19th January 2000 and the board issued a retraction dissociating themselves from O'Hanlon's remarks. The trading suspension was then lifted on 27th January and the share price rose rapidly - more than 10 times. As one shareholder explained to Foley.
"Mr O'Hanlon's statements on uk-iNvest.com flew around the bulletin boards in minutes. We had been hearing rumours it was doing lots of deals but here they were apparently being confirmed by the chief executive, who was saying that the shares were going to be worth pounds 5 to 7 pounds and be quoted on the AIM market. Everyone thought they would like a piece of that and dived in, but it all seemed to go downhill from there." Monticello was expelled from Ofex on 10th November 2000. O'Hanlon resigned as a director on 26.1.2001.
Anyone visiting share bulletin boards such as unquote will see that there are a number of decidedly unhappy Monticello investors around.
Monticello plc was founded on 23rd October 1998 and took over the Zinc Corporation in January 1999. The Zinc Corporation was founded on 22.2.1996. Its original name was Zinc Metallurgical Products plc (No: 03163073), changing its name to the Zinc Corporation on 1.3.1996. Initially its business was to exploit a new technology for extracting zinc and other metals from sulphide ore. There was a further name change on 24.3.1999 when it became Warkworth plc. Sommerville was appointed a director of Warkworth on 17.11.00. The company was put into compulsory liquidation on 23.1.2002 and is now in the hands of the Official Receiver. Sommerville is also a director of Zinc Metallurigical Processes Ltd (03105120). The company was founded on 18.9.1995 and Sommerville was appointed as company secretary and director on 30.6.2000. Returns and accounts are overdue: returns should have been filed on 16.10.2001 and accounts on 31.1.02. Companies House shows that there is now a proposal to strike off this company.
Curiously there was another company called the Zinc Corporation (03698747) that was dissolved on 13.11.2001. It started life as Warkworth Ltd, changing its name on 24.3.1999. The company was dissolved on 13.11.2001.
Monticello plc is now being investigated by the DTI. It is not known whether this is a civil or criminal investigation - the DTI carries out both types.
The company's registered office has changed from Monticello House, 45 Russell Square, London WC1 to The City Business Centre, 2 London Wall Building, London Wall, London EC2. A number companies that Sommerville is involved in are registered here; City Vintners and Goldman Williams used to be registered here and the Birches Company still is.
Although it was Mark O'Hanlon was gave the over-optimistic interview, investdrinks can well imagine that clients of City Vintners and Goldman Williams and investors in Monticello plc must wonder how long the FSA will authorise the Birches Company to carry on a wide range of investment business and wonder why their authorisation is not suspended while a thorough investigation is carried out.
Goldberg Kravitz, Hopkin Pierce & Co Ltd, Rechman Advisory SL, Stanley Riebeck Corporation, Webster Cohen & Galombik
Although all of these companies, that offer shares, might appear at first sight to be separate companies they are all linked. Hopkin Pierce & Co Ltd, Stanley Riebeck Corporation and Webster Cohen & Galombik are all wholly owned subsidiaries of the Salisbury Merchant Bank of Grenada. These three companies operate from Grenada, while Goldberg Kravitz and Reichman Advisory SL are based in Barcelona. Raun Austin and Andrew Sommerville, directors of City Vintners and Goldman Williams, are clearly linked to these companies.
The Birches Company Ltd approves the statement, which may be an investment advertisement in the UK, sent out by the individual companies above and is licensed by both the Institute of Charted Accountants and the Financial Services Authority. Sommerville is a director and company secretary of the Birches Company Ltd. The statement clearly and helpfully warns that these companies are not based in the UK and so all the protection offered by the UK regulatory systems do not apply.
investdrinks would advise anyone contemplating doing business with the above companies to take that warning seriously especially as Mr Justice Etherton (High Court, London 10.12.01) said that the petitions from the DTI to close City Vintners and Goldman Williams 'support the conclusion that the Companies were carrying on business in a manner designed deliberately and dishonestly to mislead the public.' In the light of this judgement it is reasonable to wonder whether Andrew Sommerville remains a fit and proper person to carry on investment business in the UK through the Birches Company (FSA no: 191677).
Extract from Anthony Hanson MW, Senior Director of Christie's International Wine Department for comment for the auctioneer's customers on buying 2001 Bordeaux and the market:
There is too much young red Bordeaux around, bought at high, En Primeur release levels, for me to be able to say that the young wine market looks healthy. 1996s came out expensive, 1997s at crazily inflated price levels. 1998s were superb from the Right Bank (Pomerol, St Emilion etc) but from the Haut-Médoc often less successful. 1999s often showed signs of rain dilution - prices came down in welcome fashion, but these wines are still around, waiting to be drunk. The 2000 vintage was exceptionally good, but its prices, for many wines, were stratospheric, fuelled by the triple-zero, once in a millennium nature of the vintage.
Since the 1995 vintage, chateau-owners have had 6 years of broadly buoyant En Primeurs sales and many now have ample cash reserves. They can afford to sell as little as 1/3 of their 2001 harvest, and still cover their running costs.
What should consumers' and collectors' policy be for the 2001s ?
Before you do anything, take stock of what you have got. 1995s, 1996s and 1997s have shown little or no appreciation in value - if you have these vintages, be very prudent about further buys of young, red Bordeaux.
Prices need to come down, I suggest, to 10% below 1999 levels, before buyers will be enthused by most of the red 2001s. Pay no attention to price comparisons with the 2000s - that was a one-off, exceptional year.
There are two good reasons to buy wine En Primeur: if a wine is so excellent and rare that it will quickly disappear, and if it looks as if the price is unlikely ever to be cheaper. Be very demanding about price levels, before you commit any funds to 2001s.
Claude Greaves on tax charges
The dates for the trial of Claude Greaves, a tax consultant for Greaves & Associates, 16 Grosvenor Place, London SW1 and who was arrested in December 2001, was fixed at Southwark Crown Court this week. The preliminary hearing will be on 31st May and the trial is due to start on 3rd February 2003. Greaves faces charges of false accounting, VAT evasion and money laundering. There are three other defendants and the sum alleged to be involved is 'approximately £7.5 million'. The charges are believed to be unrelated to the claret web. Greaves is general manager of the Salisbury Merchant Bank.
City Vintners and Goldman Williams: Liquidator's summary
According to the summary (Feb 2002) of the assets and liabilities of the two companies as of 29th November 2001. City Vintners has a surplus of £193,604 and Goldman Williams Ltd £361,866. These figures are gross and investdrinks understands that there are likely to be deductions from these figures. The summary echoes the judgement of Mr Justice Etherton (10.12.01) that the evidence presented by the DTI supported the conclusion 'that the Companies were carrying on business in a manner designed deliberately and dishonestly to mislead the public'.
The summary for City Vintners states:
'The sales practices of the company were deceptive, and misleading representations were made to both existing and potential clients. In particular the company claimed to have access to cases of wine that were in short supply or were being offered cheaply by the company, that customers could expect to see substantial tax free returns in the short term and that there was no capital gains tax or inheritance regarding fine wine.
The company abused the trust and confidence of customers and breached its duty to them by giving advice that was solely for the purpose of obtaining an exorbitant profit. Contrary to the impression given the company did not act as a broker and the return from its sales was not confined to the 2.5% commission. It purchased wine from regular suppliers and sold it on to clients at substantially inflated prices.
(The summary for Goldman Williams is identical.)
The summaries outline that Raun Austin was responsible buying the wine from the main suppliers used by City and Goldman. investdrinks understands that the main suppliers were Bordeaux Index Ltd, Farr Vintners Ltd, David J. Watt Fine Wines Ltd and Wilkinson Vintners Ltd.
Duncan Beat, the appointed liquidator, has written to creditors. Clients of the companies who have valid certificates should be able to take control of their wine once the liquidator has sought legal advice. Furthermore it appears that clients can claim for the difference between what they paid and what the wine is worth. Coupled with the claims from customers who never received their wine these claims will far exceed the cash available. Beat also reports that he understands that 'a substantial amount of the company's income was paid to associated companies which are located outside the United Kingdom. One such company is understood to trade from Denmark.'
One of the first decisions to be made by the creditors' committees will be whether it is sensible for the Liquidator to try to recover 'company monies which have been wrongly dissipated'.
Bordelais & Dutch Ltd
On Tuesday 16th April I had a meeting with David Jackson, managing director of recently formed Bordelais & Dutch Ltd. Jackson worked for Danesfield Securities before taking a sabbatical. It was while he was at Danesfield that he met Raun Austin. He joined Goldman Williams in September 1999 as a broker and became general manager in January 2000. His fellow director, Mark Blackburn, was a broker with Goldman Williams before heading up Vintage Assets International Ltd. VAI was the third wine company to trade from Roman House and it was launched shortly before City and Goldman were closed. The B&D brochure draws extensively from the VAI brochure but warnings that wine prices can go down as well as up and the unregulated nature of wine investments have been added. As has a section on seeking independent advice from a tax expert on whether a wine investment could be subject to capital gains tax.
Jackson says that he and Blackburn, sales director, have worked hard to make B&D different from City and Goldman. There is no sales commission charged and the cost of five years' insurance and storage with London City Bond is quoted separately on the invoice.
It is certainly true that B&D's prices are substantially below those charged by Goldman and City. However as they buy from UK merchants, it is almost inevitable (unless B&D sell at a loss) that it will be possible to source these wines more cheaply elsewhere. Were they in the future to be able to buy directly from the Bordeaux négociants this situation might change.
Current B&D prices are (Farr Vintners in brackets): Haut-Brion 1996: £1520 (£1110); Lafite 1986: £2,900 (£2200); Lafite 1996: £2700 (£2,000); Mouton-Rothschild 1986: £3,110 (£2,500). On average the four wines from B&D are 31.2% more expensive than from Farr Vintners. Since Sept 1999 the Lafite 1996 has increased by 11% at Farr, the Haut Brion 1996 by 3.9% and the Mouton 1986 by 5.3%.The figure for the Lafite 1986 is not available.
B&D's brochure and letters sent to customers speak of 'this exciting market' and of wine being 'a powerful investment tool'. One of the Press articles sent out by B&D is Profit on a liquid investment by David Budworth (Sunday Times 30.12.01). The prices of the top Bordeaux wines from 1990 are shown to have risen spectacularly in value from their opening price to that achieved at recent auctions.
As potential investors are not buying en primeur (opening prices offered when the wines are still in barrel) these figures are of limited relevance. Much more pertinent is how much have the wines increased in value since they were bottled. For instance over the past 31 months (Sept 1999 to April 2002), prices for the 1996 of seven top Bordeaux properties (Cheval Blanc, Haut-Brion, Lafite, Latour, Margaux, Mouton-Rothschild and Pétrus) have increased on average by 5.2% annually. This ignores storage and insurance charges plus commission charges for selling and is just 0.7% more than is available from an instant access cash ISA paying 4.5% a year.
Since September 1999 the 1990 vintage has shown a better gross return: 11% per annum for the six (excluding Pétrus). B&D are not offering any 1990s. Whatever efforts Bordelais & Dutch may have made to distance themselves from the fraudulent activities of City Vintners and Goldman Williams, potential investors can buy the wines more cheaply elsewhere.
Following the three creditors' meetings last week, the Tenon Group (020-7499 1666) has been appointed as Liquidator for Boington & Fredericks, City Vintners and Goldman Williams. The first creditors' meeting for Liquid Acquisitions Ltd will be on 23rd April at 10:30am at the offices of the Official Receiver, 21 Bloomsbury Street, London WC1 (020-7639 1110). investdrinks understands that the Tenon group are also in the running to be appointed Liquidator of Liquid Acquisitions.
Categorically false claim
investdrinks has just received the following message from someone contacted by Bordelais & Dutch Ltd:
In the last two weeks or so I have been contacted by a representative of Bordelais & Dutch trying to sell me investment wine.
In a discussion I had with them yesterday I mentioned that I had read your web site and was concerned at the references in there to B & D directors Jackson and Blackburn. I was assured that 'although they may not have been totally above board at their previous company B & D are totally legal and that your references to them were unfair as it is difficult enough starting up a new company without such comments as yours.' I was also told that 'the Directors had in fact spoken to you about the new company and that you had been impressed by what you had heard and that as a result you intended to remove your reservations about B & D from your web site.'
Is this claim true?
B & D are offering me cases of Haut Brion 1996 at £1520 but I am obviously concerned as to whether they are telling the truth about this alleged conversation between yourself and their directors.'
I spoke to David Jackson, a director of Bordelais & Dutch Ltd, initially in early March and have agreed to meet him. We will be meeting later this month. We have not discussed the company - Jackson preferred to answer my questions face to face rather than by email or telephone and I have certainly not said I would remove my comments from the site prior to any meeting. Unless, of course, they are shown to be inaccurate.
David Jackson comments:
I would stress, however, that as a matter of course I personally contact individuals who have seen your site with regard to my previous employment and for an opportunity to highlight the fundamental differences to Bordelais & Dutch. During such conversations I will confirm that I have indeed made contact with you.
It is made clear that our discussions are in an early stage and that no suggestion has been made by either party relating to my firm's removal from the site. No doubt your contact will confirm this.'
The price of Haut Brion 1996 has changed little over the past three years. In April 1999 Farr Vintners had this at £1,000 a case and they now have it for £1,100 - an increase of 10% over three years - an average increase of 3.3% per annum.
Raun's sense of humour
Several sources have suggested that Raun Austin, director of City Vintners, Goldman Williams and a number of other companies, is a very serious boy and perhaps lacks a sense of humour. investdrinks is inclined to think this is a trifle unfair. Anyone, who uses three dates of birth at Companies House, cannot be entirely serious. Incidentally investdrinks is delighted to be able to reveal that Raun was born in Redhill, Surrey on July 10th 1967 - there's just time to save up for a 35th birthday present (he's mad keen on cars). For someone, who has had two investment companies closed down in the public interest, to live in a flat at The Boilerhouse, Shad Thames - just a stone's throw from London's Tower Bridge - must surely demonstrate a wry sense of humour. Perhaps this may be a little too wry for the many City and Goldman investors, who now find that their wines worth substantially less than they were led to believe.
How to get rid of persistent 'wine brokers'
'Have just read your web site with great interest as I have been contacted on many many occasions in the past by these so called ' wine-brokers' - particularly by the James Hewitt people - in the end the only way I could put them off was to insist on tasting the wine first before investing and since then I have not received another call!!!'
Boington & Fredericks, City Vintners and Goldman Williams: first creditors meetings.
These will be held on 3rd April (City and Goldman) at Conway Halls, 25 Red Lion Square, London WC1R 4RL at 11am and 2pm respectively and on 4th April for B&F at Official Receivers office 21 Bloomsbury Street, London WC1 at 11am.
At least two insolvency practitioners are interested in being appointed as liquidator. investdrinks has been contacted by the Tenon Group (corporate recovery and insolvency service) and has also seen an unsigned and anonymous letter sent to creditors of City Vintners mentioning the interest of Leonard Curtis & Co in being appointed.
It may be possible to pursue the directors of the three companies to recover funds. However, creditors need to balance this against the feasibility and cost of any such action and how far this will eat into whatever funds may be currently available for distribution to creditors. £2.2 million was sent overseas by City Vintners and Goldman Williams and investdrinks assumes that it is unlikely to be a simple matter to get those funds returned to the UK for the creditors.
James Hewitt Associates Ltd - very long term 'investment', ISA a better bet in medium term
Anyone investing in a case of Lafite 1996 from Liquid Hewitt is likely to need to be very patient and enjoy good health and, at least in the short to medium term to be better off leaving their money in an ISA.
investdrinks looked at the annual growth performance of Lafite over the past 30 months in the four good vintages - 1982, 1986, 1989 and 1990. These vintages showed the following annual growth: 1982 -10.4%; 1986 - 6.6%, 1989 - 8%; and 1990 - 10.8%. Then investdrinks transposed these performances to see how a case of Lafite 1996 (£5073) bought from James Hewitt Associates might be expected to accrue in value, using £2,000 as the current market price. Over ten years a 10.8% annual growth just edged the Hewitt Lafite into a modest profit - £505. This means an investor would see growth of just 1% per annum - hardly the 'high average annual growth' mentioned in the company's brochure.
Should the annual rate turn out to be only 6.6%, it will take 14 years for the Hewitt Lafite to start to accrue any value on the market price. In both cases an investor would do much better over 10 years to have their money in an ISA giving 4% tax-free per annum. At 10.8% it would take 16 years before the Lafite overtook the ISA, while at 6.6% it would take 39 years. A long hold indeed!
Judgement on Liquid Acquisitions Ltd
At the end of a two day hearing in the High Court Liquid Acquisitions Ltd was wound up in the public interest on 30th January. Andrew Dunne, the company secretary and the effective manager of the company, was ordered by the judge to pay the DTI's costs. These are believed to be at least £25,000.
Dunne was also ordered to pay the company's costs. Although Dunne was only the company secretary, he held 75% of the shares. The judge decided that he was a de facto director of Liquid Acquisitions Ltd and 'its moving force'. Prior to LA, Dunne ran Ransby Hoare Associates from October 1999 and May 2000. Ransby Hoare Associates went into liquidation in December 2000. Dunne is now involved with James Hewitt Associates Ltd (see below).
In his judgement of 30th January, Mr Justice Lloyd was very critical of Dunne. 'It is plain, for example, that the representation about the brokers' clients having made 40% per annum capital growth was a lie; it was a lie drafted and approved by Mr Dunne.' 'I am satisfied that the company's whole approach involved deceit.' 'There are quite a number of lies in the course of that (the sales patter - ed), some of them of less significance than others. It is wholly untrue that the broker's clients have had a minimum of 40% capital growth per annum, whoever the broker may be in this particular context. The statement about the wine market being tax-free is over-simplified. The reference to "our buyer in Bordeaux" is a total fabrication, since they only ever buy, as I say, from Farr Vintners in this country. All this is designed to encourage the contact to suppose that the company offers a service which will involve identifying a suitable wine for a client's investment needs and buying it for him.' Liquid Acquisitions also claimed falsely to have 'exclusive access to the international arenas for buying and selling your fine wines'.
Since January 2001 seven claret investment companies have been wound up. The DTI still has a number of on-going investigations into claret investment companies.
Jackson & Blackburn back in business but National Savings Investment Account better value
David Jackson, ex general manager of Goldman Williams, and Mark Blackburn, a broker at Goldman, are the two directors of newly formed Bordelais & Dutch Ltd. The company is offering Mouton-Rothschild 1986 as an investment at £3,110 a case. This can be bought from Corney & Barrow (broking) for £2,300 a case. The price of Mouton 1986 has barely moved over the last three years - 3 years ago Corney & Barrow had this wine for £2,200, so over that period the wine has risen by just 4.5% (1.5% per annum). Bordelais & Dutch Ltd trade officially from the same address as Morgan Chantel Ltd.
Any investor, who buys the 1986 Mouton as an investment from B&D will find that they would be very much better off leaving the money in an ISA. After ten years on current performance the market value of the Mouton 86 will have risen to £2,669 - a loss of £441. An ISA at 4% will have risen from £3,110 to £4,604 and one at 4.5% will have risen to £4,830. Even a National Savings account offers a much better level of return than Bordelais & Dutch's advice and price. £3,110 in a National Savings account (2.7% per annum) will have risen to £4059 gross. Still at least clients of Bordelais & Dutch Ltd will not have to worry about capital gains tax - losses are not taxed.
It does seem extraordinary that the general manger and a senior broker of Goldman Williams which a High Court judge believed supported 'the conclusion that the Companies were carrying on a business in a manner designed deliberately and dishonestly to mislead the public' should be able to set up a new investment company a week after Goldman Williams was wound up in the public interest. There should surely be a requirement on Jackson and Blackburn, whatever the merits or otherwise of their new company, to demonstrate to the financial authorities that they are fit and proper people to offer investment advice. Should they show again that they are not fit and proper, it will be down to the DTI to prove this at taxpayers' expense. This is absurd.
The Wine Index
investdrinks hears that some clients of City Vintners have been contacted by The Wine Index offering to sell their wine when they have buyers for it. It would not be surprising if people receiving such calls were suspicious.
James Hewitt contacts investdrinks
James Hewitt phoned investdrinks (14.2.02) to describe the sighting of a shirtsleeved Andrew Dunne at the new offices of James Hewitt Associates on 7th February as bulls.h.i.t. Hewitt wanted to know how investdrinks had traced the company's current location (19 East Street, Bromley). It does seem bizarre that a company that seeks investors' trust should be so reluctant to reveal its trading address.
James Hewiit Associates strongly urges a 10 year hold its wines to maximise 'high average annual growth'. Since the company is selling a case of Lafite 1996 for £5,073, which can be bought elsewhere for £3,000 less, there must be a reasonable chance that even after 10 years the investor will still not have seen any profit - let alone a 'high average annual growth'. Consider the following current auction case prices (from Decanter, Feb 2002) for good vintages of Lafite over the past 40 years:
1990: £1485-1760; 1989: £1485; 1986: £1980; 1982: £3740; 1976: £1100-1265; 1966: £770-902; 1961: £1150.
It should be remembered that Lafite went through a bad patch in the 1960's and 1970's. A case of Margaux 1961 is £7,150. None of these Lafite prices are remotely close to the £5,073 break-even point for Hewitt's Lafite 1996. It reasonable to assume that the older vintages are more likely to rise in value faster than the 1996 because of increasing scarcity as the older wines are drunk.
investdrinks would be grateful if James Hewitt would provide evidence to back up his company's claim that a client buying a case of Lafite 1996 at £5,073 will see 'high annual average growth' on a 10 year plus hold. When is the client likely to start to see the Lafite 1996 (as priced by James Hewitt Associates Ltd) start to show any increase in value?
City Vintners and Goldman Williams:
Extracts from Mr Justice Etherton's 41 page judgement (10.12.01) on City Vintners and Goldman Williams' applications to have the appointment of the provisional liquidator cancelled. The judge threw out the applications on all counts.
'The companies expressly direct the brokers to advise potential customers to sell shareholdings in order to diversify their existing investment portofolio by acquiring some wine as an investment.
It is alleged that some brokers commonly represent to potential and exiting clients that the Companies' existing clients are consistently experiencing a substantial annual increase in the capital value of their wine holdings; that they can expect to see substantial tax free returns on wine purchases in the short term; that no capital gains tax or inheritance tax is payable on fine wines; that, if a wine cannot be sold profitably at auction, the Companies will generally buy it back at a discount to the Companies' current sale price; that the Companies have, or have access to, cases of wine which are in short supply or are being offered cheaply by the Companies, and the opportunity to purchase will shortly be lost if the client does not agree to purchase quickly; that the client may increase the value of a wine holding by purchasing further wine to complement it.
The petitions allege that those sales practices are deceptive and are calculated to deceive potential and existing clients, and that the representations made to potential and existing clients are false and misleading and known to be such. It is alleged that the Companies abuse the trust and confidence placed in them by potential and existing clients and breach the Companies' duty to clients, by giving advice that is manifestly imprudent and contrary to their best interests and that is given solely for the purpose of obtaining an exorbitant profit from each transaction.'
'Further, reliance was placed on the evidence that £2.2 million had left the Companies in the relatively short period since they began trading and had been sent overseas to associated individuals and companies. It was said that the Companies' accounting records do not give an adequate explanation of those payments, and that there was either no consideration for them or, if consideration had been given, the amounts were so substantial that it is probable that they far exceeded the value of the consideration given.'
The judge accepted during the hearing of 7.12.01 that the Companies had not had enough time to prepare a full defence to the evidence in the DTI's petitions. However, neither company contested the winding up on 16.1.02.
The Wine Index
A client of Liquid Acquisitions was recently contacted by The Wine Index and was offered Lafite 1996 at £3,650 a case as an investment. Lafite is currently available elsewhere for £2,000 in bond. The company was formed in December 1999 and changed its name from Chequegate Investments Ltd on 13.12.01. The last accounts were filed on 31.12.01 as a dormant company.
James Hewitt Associates Ltd - new trading address
James Hewitt Associates Ltd (Liquid-Hewitt) have moved to offices above the Bromley branch of estates agents Bairstow Eves. Their new address is 19 East Street, Bromley. Telephone: 020-8461 8379. Furthermore Andrew Dunne, company secretary of Liquid Acquisitions and the controller of that wound up company, was seen in shirtsleeves in the offices. It is not known whether Liquid Hewitt moved to Bromley because they needed more space or whether the fact that the new offices are but a five minute stroll from Dunne's home in Fairfield Road was a factor in relocating. However, James Hewitt Associates have denied any knowledge of Andrew Dunne.
Dunne was also the manager of Ransby Hoare Associates that went into Liquidation in December 2000. James Hewitt Associates appears to continue the pattern of Dunne running companies fronted by younger men.
Plug pulled on Liquid Acquisitions Ltd. Dunne savaged by judge
The DTI have notched up another success against fraudulent drinks investment companies with the winding up of Liquid Acquisitions in the public interest on 30th January in the High Court. The DTI originally petitioned to have the company closed in October 2001 on the grounds of misleading the public over the likely returns and because of the excessive prices charged. Liquid Acquisitions, who sold claret as an investment, contested the petition.
There was a two day High Court hearing before Mr Justice Lloyd on 29th and 30th January. Liquid Acquisitions lost comprehensively. The judge ruled that: 'On the evidence, the court was satisfied that the whole approach of the respondent to its customers involved deceit, demonstrated, inter alia, by its falsehood as to the status of the company, its representation that its business represented an excellent investment opportunity, and its suggestion that it was acting as the purchaser's agent. Those factors justified the conclusion that the respondent's business was dishonest.'
The DTI commented: 'Liquid Acquisitions Limited sold exclusive wines held in a bonded warehouse for investment purposes. The court found that the company's sales representations were fraudulently deceptive and it applied a huge undisclosed mark-up on all sales whilst purporting to act in the purchaser's interest; many customers were dishonestly induced to purchase wine for investment purposes at two to three times its true value.
The Judge further marked his disapproval by ordering that the costs of the Department in bringing the proceedings and the company's defence thereof should be paid by Andrew Dunne who controlled the company throughout.' 42 year old Dunne of Bromley, who was LA's company secretary, is likely to be facing costs of at least £25,000. It is highly probable that Dunne is also the controller of James Hewitt Associates Ltd. In the light of Mr Justice Lloyd's comments it seems unlikely that James Hewitt Associates Ltd will be around for long.
VCA Vintners wound up
On January 23rd VCA Vintners was also wound up in the public interest following a petition by the DTI. This company was run by Simon Drake, an ex-employee of David Allan's Allwines which went bust last year. Allwines deficiency is now in the region of £3 million with very substantial amounts of clients' wine missing.
It appears that VCA Vintners also failed to purchased all the wine ordered by its clients.
Liquid Acquisitions in the High Court - 29th January
James Hewitt Associates Ltd (Liquid Acquisitions Mark 2) continues to be active - a number of putative investors have contacted investdrinks to say they have received fliers from Liquid-Hewitt. Between Christmas and the New Year the company abandoned Dudley House, Liquid Acquisitions' trading address. They neglected to give a forwarding trading address to the managing agents at Dudley House. It is not known whether this move was prompted by the need for more space or because of some other consideration.
Hewitt ignores charity
James Hewitt Associates Ltd (Liquid Acquisitions Mark 2) continues to send out brochures and letters claiming that they are sponsors of NCYPE. This ignores a written request sent by NCYPE before Christmas to both explain why they were making this claim without permission and to stop doing so.
James Hewitt Associates also provides a gem for the possible claret web joke book. 'With this in mind, we would emphasize that prospects of achieving a high average annual growth in value increase with time, and a ten-year plus hold is likely to yield a significantly higher average return.' To fully appreciate the joke you have to remember that James Hewitt Associates are selling a case of Lafite 1996 for £5,073, which can be bought elsewhere for £3,000 less. Any investor who bought at Hewitt's price is likely to have to wait at least ten years before had a ghost of a chance of starting to see a return.
In mid-December I had the pleasure of meeting Andrew Dunne, company secretary for Liquid Acquisitions, and Thomas Sloan, LA's director, in a Beckenham street. Dunne made a similar point: over 10 years LA's clients would make money. investdrinks wonders whether the sales force of Liquid Hewitt explain to potential clients that the reason they have to wait ten years is because their prices are so excessive.
15% spread of prices
In the Weekend FT Food and Drink pages (19th/20th January 2002) Frederick Achom defended his ex-company, Boington & Fredericks Ltd. "We ran our company completely above board. All our clients were supplied with the wine they ordered. Has anyone told you any different? A few clients sold what they'd bought and we bought it back from them at exactly the prices we said we would." investdrinks wonders whether Boington & Fredericks clients knew of the 15% price spread deduction levied on repayments. If Frederick or his fellow convicted fraudster, Anthony Grant, would like to offer an explanation of this 15% price spread reduction, investdrinks will be happy to publish it
Success for the DTI
City Vintners, Goldman Williams and Boington & Fredericks were wound up in the public interest in the High Court, London on 16th January 2002. Although City Vintners and Goldman Williams had indicated before Christmas that they would contest the petitions, in the end they did not submit a defence. Nor did Boington & Fredericks. Their solicitor rang for a copy of the DTI's evidence but there was no further contact. In less than three minutes Mr Registrar Simmonds ordered the companies to be wound up. This will be done by the Insolvency Service. In the case of Boington & Fredericks the judge commented that there was a prima facie case for closure in the public interest.
'highly profitable vintage wine market' - for whom?
This is the claim in the introductory letter from James Hewitt Associates Ltd. These missives are currently being sent to shareholders in Enterprise Inns and various other companies. Mr Hewitt and his merry band are now offering a case of Lafite 1996 at £5,073 (available from brokers not based at Elmers End, South London for around £2,000). At this price the sale is clearly profitable to the Associates, but to the investor?
investdrinks assumes that James Hewitt Associates Ltd are still camping out in the first floor offices of Liquid Acquistions Ltd at 145-147 Croydon Road. Unfortunately investdrinks has yet to receive a reply to a letter sent on 7th December 2001 to James Hewitt asking for the company's trading address. Perhaps now that Christmas is over, the post in South London will get back to normal.
Return to the High Court
The DTI's attempt to wind up Liquid Acquisitions is expected to return to the High Court soon. Since 3rd December 2001 both parties have been warned to be ready to ready to court at any time.
Last September the website everywine.co.uk contacted Andrew Dunne, company secretary of Liquid Acquisitions, to ask why they were selling Latour 1996 at £4,400 as an investment when it could be bought elsewhere for £1,900.
'We contacted Liquid Acquisitions, and spoke to Andy Dunne, the Company Secretary, who did not deny that they had offered wine at the price our reader quoted. However, he denied that he was misleading customers. "Of course our customers will make money", he insisted. "The vast majority of the customers are in for the long term. Some are well aware that they can buy the wine cheaper elsewhere. Many of them have very well paid jobs and have very busy lives ... they're prepared to pay us for the extra service that we offer and the long-term nature of that service."
The company does indeed claim in its letters to clients that "as part of our ongoing service, Liquid Acquisitions tracks and monitors wine prices on the International Market. When an appropriate opportunity arises for you to put your holdings on the market to realise a profit, we shall contact you."
Mr. Dunne explained that he would be "extremely disappointed if our customers didn't get a return after 10 years". On the strength of the initial prices charged by Liquid Acquisitions, it would indeed seem unlikely that any profits would be seen before this point - the investment would have to double in value before the owner could even cover the initial cost of the wine.
When asked if it was not reasonable to warn customers about the length of time it would take to go into profit, he said: "I don't think it would be legal to give any indications of return - all we can give is some idea of past performance."
Throughout our conversation, Mr. Dunne made it clear that he believed the conduct of his company was beyond reproach, and that the company was simply misunderstood. He repeatedly attempted to make comparisons between buying wine for future profit and more traditional financial products. He explained that: "No one with, for example, an endowment, expects to make any money in the first years of the policy." Endowments, pensions and other products, however, have visible management costs which are often paid in the early years of the product's life, thus minimising early profit. Wine purchases have no such management costs - only relatively small costs for appropriate storage of the wine in bonded warehouses.'
(investdrinks comments: if some other drinks investment scams are anything to go by the major management costs of these companies include the commission paid to the sales force and the acquisition of expensive motors by the directors. For full story go to everywine.co.uk)
DTI warning 'Ask & think before you invest in art & drink'
On 20th December the DTI issued a warning saying that they are 'on the trail of investment scams, featuring alleged mis-selling of fine wines and art'. They listed the companies already closed down and warned that there were likely to be further petitions to wind up companies in the near future. They also gave the following advice:
HANDY HINTS FOR WOULD-BE INVESTORS:
(Some of the DTI warning was previewed in the IOS - 16.12.01)
Goldman's joke book
investdrinks is delighted to announce that a slim volume of the best jokes from the claret web scamsters may appear sometime in 2002 - perhaps under the imprint Raun & Sommerville. One joke from November 1999 that will certainly be included is this:
'If you have not already bedded down at least a case of each of the first growth Chateaux it will be well worth contacting your broker at Goldman Williams to check if cases are still available at sensible prices. (ps investdrinks put sensible in bold.)
Here is another possible contender - again from Goldman in November 1999:
'What is very apparent from reading the extensive press coverage is that wine as a capital appreciation tool is now a very popular and credible alternative to traditional markets.'
More on James Hewitt Associates Ltd. - no bonded account
It's not been a good month for 23 year old James Hewitt - exposed in the Financial Mail on Sunday (9.12.01) as a man 'who cheats a charity for sick children just before Christmas'. investdrinks sympathises - there are so many things to think about when you are starting a new business that some things can be so easily be overlooked. The NCYPE sponsorship must have looked to be a good idea at the time - pity you forgot to get the charity's permission first.
Sending out application forms to clients for an account at London Bridge Vaults must have seemed another good idea. Pity you failed to set up an account at London Bridge Vaults. To be fair you had broached the idea but nothing was agreed or signed. Still at least you've got nice, friendly first floor office accommodation at Dudley House in Elmers End, South London. Furthermore there is the wisdom and experience of Andrew Dunne and Thomas Sloan, respectively company secretary and sole director of Liquid Acquisitions Ltd, to fall back on.
James Hewitt Associates Ltd
investdrinks has yet to hear from James Hewitt (see story: 10.12.01). In the absence of a reply it seems reasonable to assume that James Hewitt Associates Ltd is operating from Dudley House, 145-147 Croydon Rd, Beckenham BR3 3RB, the premises of Liquid Acquisitions Ltd. investdrinks has been contacted by several former clients of City Vintners and Goldman Williams who have recently been approached by James Hewitt Associates Ltd.
DTI estimate that claret scam is worth £50 million
The Independent on Sunday (16.12.01) carried an article by Severin Carrell on the clampdown by the DTI on companies selling over-priced wine investments, in particular the closure of Boington & Fredericks, City Vintners, and Goldman Williams and the appointment of a provisional liquidator. In all the DTI are investigating 11 companies.
The IOS reported that Melanie Johnson, the Consumer Affairs minister, issued a warning on Friday about the potential risks. "Some companies are preying on people's naivety about wine as an investment." Ms Johnson said that investors should take great care in getting independent advice about fine wine offers or similar deals for fine art. "As with all investments, if you don't understand it yourself, take advice from an independent expert who does."
The IOS reported that Pinsent Curtis Biddle, solicitors for Andrew Sommerville and Raun Austin said that their clients strongly contested the DTI's claims. They admitted that the DTI had effectively closed their companies but claimed that the department's actions raised 'serious issues" about their human rights because they did not have enough time to fight the order.
The statement from Pinsent Curtis Biddle said: The businesses are dead in the circumstances where there has been no hearing on the merits of the DTI case, no opportunity for the companies to challenge the appointment of a provisional liquidator and no claim for damages in the event that the DTI is wrong on its case."
investdrinks is sure that the clampdown by the DTI on these scams was influenced by the number of disillusioned clients of these companies who contacted the DTI and told their story. The pledge by 34 merchants not to supply the claret web was also a significant signal that legitimate merchants were not prepared to see the public misled, the image of the wine trade tarnished and that they were not prepared to profit by supplying while the public was ripped off.
DTI move against Boington & Fredericks, City Vintners
and Goldman Williams
The DTI have moved to smash the claret web. On the afternoon Thursday 29th November the DTI successfully lodged petitions in the High Court, London to close down Boington & Fredericks Ltd, City Vintners Ltd and Goldman Williams Ltd in the public interest. The Insolvency Service was appointed as the provisional liquidator. The next morning the liquidator accompanied by bailiffs moved in, seizing assets and changing the locks on the offices.
I was alerted that something was up when from Monday 3rd December emails started arriving through investdrinks from clients of Boington & Fredericks, City Vintners and Goldman Williams wanting to know why they were getting no reply when they phoned them. Nor could I get any reply, so Thursday 6th December I went to visit the companies' offices.
At New Roman House, 10-26 East Road, London N1 6AD close to Old Street I was told by the security guard that the Provisional Liquidator (The Insolvency Service) had closed the offices of City Vintners and Goldman Williams on Friday 30th November. He had been told to refer anyone to Cheryl Lambert, senior examiner at the Public Interest Unit of The Insolvency Service. She confirmed that a provisional liquidator had been appointed and that the companies had ceased trading on Friday. City Vintners and Goldman Williams were, however, challenging the appointment of the provisional liquidator.
I was told by the security guard at Roman House that City and Goldman were contesting the petition and this was confirmed by The Insolvency Service. Their appeal took up the whole of Friday and judgement was given on Monday. They lost - the petitions stand as does the appointment of the provisional liquidator. City Vintners and Goldman Williams may still fight the winding up order when it gets to court sometime next year. However, whatever the result these businesses are effectively now finished.
Boington & Fredericks have not appealed and, given the two directors' previous convictions for fraud, they may well not contest the winding up order, so their closure is likely to be confirmed early next year.
City Vintners and Goldman Williams were much the biggest of the companies involved in the wine investment scams. Unfortunately there will be a lot of losers: jointly they had just over 1,450 clients with some £18 million's worth of wine at London City Bond. This what the investors paid, not its market value, which will be between a third and a half of this. The full figure is likely to be closer to £19 million as it is probable that the wine from very recent orders that City and Goldman took may not have yet reached LCB.
Boington & Fredericks was a much smaller operation. It is thought that they had around 40 clients who have some £150,000 worth of wine at Trapps Cellars. Unfortunately it appears that not all the orders were met. John Davis, managing director of Trapps, has told investdrinks that there are gaps between what was allocated to clients and those actually in Trapps. In particular up to 10 cases of Margaux 1990 were sold by Boington & Fredericks at £6820 each (available elsewhere for between £3,350 and £3,450) are not in Trapps.
During this past week investdrinks received a number of enquiries from these companies' clients, who were unable to contact them by phone. investdrinks visited the offices of all three companies on Thursday (6th December). The three are not trading at present and the Public Interest Unit of the Insolvency Service said that the Insolvency Service have been appointed as the provisional liquidator.
investdrinks understands that City Vintners and Goldman Williams are contesting these petitions. Boington & Fredericks are thought not to have lodged an appeal. If this remains the case, Boington & Fredericks Ltd are likely to be wound up in the High Court early in 2002. investdrinks hopes to carry a fuller report soon.
More news on James Hewitt Associates
Financial Mail on Sunday (9/12/2001) savages Hewitt
'Wine deal's a sick trick - a vintage rip-off merchant uses children's charity as cover for costly investment' by Tony Hetherington, the Readers' Champion.
Hetherington responded to DH who said 'I was offered 2 cases of Château Latour 1996 for £8815 as an investment which might appreciate at 30% a year. I have since found out that this is about two and half times the market price. This outfit claims to be a sponsor of the National Centre for Young People with Epilepsy. I wonder if this (legitimate) organisation knows the nature of this particular sponsor?'
Some extracts from Hetherington's response:
'But now up pops James Hewitt Associates. This new company, located not a million miles away from the stricken Liquid Acquisitions, simply helped itself to the charity's name and logo and now proudly displays it on its notepaper in an attempt to look respectable.
The NCYPE's Sue Virgo has written to James Hewitt Associates.
She told me: "We have requested sight of the material using the charity's name as a matter of urgency and made it clear our concern that our name has been used without consent in connection with a company of which we have no knowledge."
She added: "No money has been received by this charity in connection with this venture."
'The man behind James Hewitt Associates is 23-year-old James Hewitt, of Blenheim Road, Bromley.
Perhaps not surprisingly for a man who cheats a charity for sick children just before Christmas, Hewitt did not respond to my invitations to explain himself.
Well, bah humbug to you, Mr Hewitt. I hope your wine turns sour, and I hope you are next on the hit list of the Department of Trade and Industry.'
investdrinks was phoned by James Hewitt very late one evening this week. He would only answer written questions sent to the registered office and was not even prepared to reveal, over the phone, where James Hewitt are trading. Hewitt did say that he had 'relocated' from the parental home in Bickley, Kent to Millennium Quay in Greenwich where one bedroom flats go for £177,000.
Given the use of the charity logo, the marked similarity between much of the content in the James Hewitt brochure and other material being sent out with that of Liquid Acquisitions Ltd, it is reasonable to assume that James Hewitt Associates Ltd is Liquid Acquisitions Mark 2.
The NCYPE have dissociated themselves from Andrew Dunne (LA's company secretary), Liquid Acquisitions and James Hewitt Associates Ltd. investdrinks urges everyone to follow the NCYPE's excellent advice and have nothing to do with this outfit, who should added to the DTI's growing list of companies they have petitioned the High Court to wind up.
Past fraud convictions: Frederick Achom and Anthony Grant (Boington & Fredericks)
Setting up and running Boington & Fredericks Ltd, a company offering over-priced wine investments, cannot have been an easy task for Frederick Achom and Anthony Grant. The company was set up on 19th April 2000. Less than three weeks earlier (31st March) the pair, along with three others, had been arraigned for trial at Southwark Crown Court charged with conspiracy to defraud various businesses by claiming that they were able to help get EU grants if they were paid suitable advance fees for their trouble. They had been committed for trial at Bow Street Magistrates Court the previous year (July 2nd 1999) . Apparently the investigation was carried out by the Metropolitan Fraud Squad.
Soon their attention was presumably distracted by their trial that started on June 5th and ran until July 7th. Found guilty of fraud, Achom and Grant were sentenced on September 1st to a year in prison. Leave to appeal was refused. Apparently they were released in March 2001. Purchase orders show that Grant was keen to return to work - on 30th March he sold two cases of Lafite 1996 as an investment for £4,300 each (available elsewhere for £2,100) and on 26th April four cases of Mouton-Rothschild at £3,300 each (available elsewhere for £1,200).
investdrinks is very grateful to the ex-employee of City Vintners for the tip that Achom and Grant are convicted fraudsters. Relationships between Boington & Fredericks and City Vintners do seem to be rather frosty. Not long ago investdrinks was contacted by a client of B&F who had been warned by a City Vintners broker that B&F 'was suspect and had been charging double what the wine was worth'. The broker kindly advised the client to look at investdrinks immediately. The client subsequently received some of their money back from B&F.
Any clients, who feel that they have been misled over the investment claims made by Boington & Fredericks Ltd, may well wish to contract the police.
DTI move against Liquid Acquisitions Ltd
investdrinks understands that the DTI has begun legal moves to close down this company in the public interest. 'Expect official confirmation in the next few days that the DTI is to ask the High Court to wind up Liquid Acquisitions in the public interest' reported The Financial Mail on Sunday (28th October 2001). A Nottingham client of Liquid Acquisitions, who has claimed a refund under the Consumer Protection Regulations, was told on 22nd November by Thomas Sloan, the company's sole director, that they have had a prohibition notice served on the company by the DTI and as such are waiting for a response to their request for a validation order to enable them to release payment. Andrew Dunne, Liquid Acquisitions' company secretary, has also told The National Centre for Young Children with Epilepsy that Liquid Acquisitions are under investigation by the DTI. (see James Hewitt story below).
The two new entrants (further news)
James Hewitt Associates Ltd was founded in June 2001 and on 7th November the registered office changed from a private address in Bickley, near Bromley, to Berkeley House, Elmfield Road, Bromley. The Associates are offering a case of Latour 1996 for £4,408 - available elsewhere for between £1,770 and £1,900 a case. The sole director is James Hewitt (DOB: 10.10.1978). Berkeley House is just the registered office and a mail address for the company. James Hewitt Associates Ltd trading address is not known, although given the apparently unauthorised use of NCYPE logo, it is possible that it is not a million miles from Liquid Acquisitions address in Beckenham.
The company claims to be a sponsor of The National Centre for Young Children with Epilepsy (NCYPE) in Lingfield, Surrey. This is news to NCYPE. "We have never heard of this company," says Mike Carter, a fund-raising officer for the charity. "They do not have permission to use our logo or claim to be sponsors. We have had contact with Andy Dunne of Liquid Acquisitions Ltd. He was introduced to us by one of our key fundraisers from a very reputable company. Dunne came to visit the Centre and it was agreed that Liquid Acquisitions Ltd would be a sponsor and pay the charity £1 for every brochure that the company sent out."
Later Andy Dunne told the charity that Liquid Acquisitions was under investigation by the DTI. Carter continues. "Dunne was told that Liquid Acquisitions' sponsorship arrangements would have to stop until their problem with the DTI was sorted out. We are very unhappy that our logo has been used by a company we have never heard of. We will be contacting Dunne and taking legal action to stop our logo being used by James Hewitt Associates."
investdrinks has tried without success to contact both Andy Dunne and the 23 year old James Hewitt to discuss this.
Drysberg & Nash
On Tuesday 27th November investdrinks tried to visit the company's premise at the City Business Centre, Rotherhithe to pick up a brochure and price list but was unfortunately refused entry. This meant it was impossible to find out who the proprietors are. Under the Business Names Act 1985 this information has to be displayed on the premises if someone is not trading under their own name. Nor is this information on their introductory flier as required under the act.
Subsequent to the abortive visit, investdrinks did receive a couple of emails from Michael Fuller of Drysberg.& Nash assuring me this is an 'honest and professional company' and that the newly formed company had sold a case of Lafite 1996 to their first client on 26th November 2001 at £2,445 a 'very competitive' price. £2,445 is not excessive but is hardly 'very competive' as lafite can be had for £2,100 elsewhere. D&N may well be 'honest and professional' but they need to comply with the Business Names Act. investdrinks has wonder why are they so reluctant to reveal the name of the company's proprietor(s).
Raun's age: mystery partly solved
For over 18 months investdrinks has been trying to ascertain which of the three DOBs Raun uses at Companies House is the real one. Despite a number of appeals to Raun for information, no light could be shed on the mystery. investdrinks was beginning to wonder whether Raun or Rayn, as he also listed at Companies House, is a rare example of a triple birth: once in 1961 and twice in 1967. Now an anonymous message has reached investdrinks to say that Raun is 34, so born in 1967. Unfortunately that still leaves a puzzle: do you blow the candles out on
investdrinks' ISP in Canada
investdrinks was highly entertained by an account of lengthy attempts of Richard Williams, an indefatigable broker with City Vintners, to sell a case of Lafite 1996 for £5K when the potential client was well aware that he could buy the same wine for £2,100 from Fine & Rare. Naturally Mr Williams praised and polished the truly splendid Guarented Nonsense article in Sunday Business but sadly to little avail.
Finally Mr Williams asked where have you been getting all this information from, have you been on Jim Budd's website, someone who has a Canadian Web site because he is banned in the UK. Shortly afterwards Mr Williams at last realised that there is only one winner when head-butting a brick wall and put the phone down.
It is perfectly true that investdrinks' ISP is in Canada. It is no secret. I wrote to Raun Austin, one of the directors of both City and Goldman, when I set the site up in April 2000. It is in Canada because of the absurd law here that treats ISPs as publishers. In Canada as elsewhere they are treated more as telephone companies. I am certainly not banned from the UK, although following the Demon libel settlement in late March last year I did have to remove material from a friend's site. Not because the ISP doubted its truth but just that he could not take the risk, which I entirely understand.
Although my ISP is in Canada, City or anyone can sue me for libel in the UK as the site can be accessed here. My ISP is in Canada to protect them not me. Furthermore if the scamsters could show what was on the site was untrue my ISP would rightly close down my site. My promise to change anything on investdrinks that is shown to be inaccurate as soon as possible stands.
Two new entrants
Dryberg & Nash and James Hewitt Associates Ltd are two new companies keen to offer clients the benefit of their investment advice.
Drysberg & Nash is decidedly shadowy - not registered with Companies House, no telephone number listed and no address on their introductory letter but is signed by a Simon Hargreaves The reply envelope goes to 44 St Olavs Court, Lower Road, London SE16.
James Hewitt Associates was founded in June 2001 and on 7th November the registered office changed from a private address in Bickley, near Bromley, to Berkeley House, Elmfield Road, Bromley. The Associates are offering a case of Latour 1996 for £4,408 - available elsewhere for between £1,770 and £1,900 a case.
Further details of the two companies in the Directory.
investdrinks is delighted to learn that several 'investors' with Goldman have had their money refunded in full under the Consumer protection (Distance Selling) Regulations 2000. As Goldman's terms and conditions now include reference to the statutory seven day cooling off period once the goods have been put into the client's name at the bonded warehouse, clients will have less time in which to claim a refund.
Invest £21,800 with Boington & Fredericks - get back £17,790
Earlier this year a retired Scottish doctor invested in several cases of Mouton-Rothschild priced at £3,300 from Boington & Fredericks Ltd (widely available elsewhere for around £1,200) and a couple of cases of Lafite 1996 for £4,300 (available elsewhere for around £2,100). In all the doctor spent £21,800. By early October he discovered that he had been misled as to their investment potential because of the excessive prices charged. He asked Anthony Grant, a broker at Boington & Fredericks, to value his wine and to sell them for him. On 16th October Grant told him that the current price for the Lafite was now £4,600 and the Mouton £3,600, so his portfolio of wines was now worth £23,600. investdrinks assumes that either Anthony Grant shares part of his name with Grant Boington, one of the company's directors, or that they are more closely related.
You might imagine that this tale would end happily with the doctor receiving the 'current value of his portfolio' - £23,600 or at least his original sum back. Sadly these boys are skilful filleters. From the £23,600 - 7.5% commission plus vat was deducted. Then a quick flash of the blade - a whopping 15% deducted from the £23,600 for 'spread of current prices' - and the sum was slashed to £17,980. As B&F's valuation bears no relation to current prices, it would be understandable if the doctor feels he has been defrauded. Furthermore the Boington & Fredericks' website makes no mention of the '15% spread of current prices'. Only the 7.5% levy is mentioned: 'Boington & Fredericks of London levy a charge of 7.5% of the gross sale proceeds by way of commission on the sale.'
investdrinks would be interested to know if Boington & Fredericks' directors, Frederick Achom and Grant Boington, started setting up B&F immediately after they left City Vintners or whether they worked briefly for another company.
Goldman Williams Price Changes for 1996 First Growths
Cold called by Marc Woolf of Goldman Williams, one quick thinking target asked Woolf to send him 'details of the price movements of First Growths over the last two years'. What he received wasn't quite the information he had asked for as he explains: 'He sent me details of what Goldman Williams' prices have been since January 2000. Not quite the same thing. They were claiming an increase of between 17% and 27% over that period. No doubt their prices have increased to that extent..'
According to Goldman's chart the Goldman price of Lafite 1996 has gone from £3,950 (Goldman's commission is not included) in January 2000 to £4,950 in September 2001 an increase of 25.32%, Latour from £3,500 to £4,300 (25.6%), Margaux from £3,900 to £4,900 (25.6%), Mouton from£2,900 to £3,700 (27.6%), Haut-Brion from £3,100 to £3,650 (17.8%) and Cheval Blanc from £3,050 to £3,650. Out in the real world in January 2000 both Lafite and Margaux were around £1,600, Latour about £1,400, Mouton around £1,150, Haut-Brion £1,000 and Cheval Blanc £950. Now Lafite is around £2,100 (31% increase), Latour £1,900 (35%), Margaux about £2,200 (37.5%), Mouton - £1,200 (4.3%), Cheval Blanc - £1,200 (26.3%) and Haut-Brion £1,100 (10%).
investdrinks suggests that Goldman's directors and sales staff should have a look at the professional version of winesearcher which will help them to track how fine wine prices have moved in the real world over the past two years. I am sure that they will find it useful.
Greaves & Associates
investdrinks is distressed to discover that Greaves & Associates Ltd was wound up in the High Court on petition of the Inland Revenue on 14th June 2000. The petition was not contested. One of the company directors is Claude Greaves (DOB: 15.3.1957 and described as a tax consultant) who was a previous director of Triple Check Ltd. Greaves is now based at 16 Grosvenor Place, London SW1. Previously his office was at 368 City Road, London EC1. Allen & Greaves Ltd, 368 City Road, London EC1 audited the accounts to 30th April 2000 for City Vintners Ltd and Goldman Williams Ltd. The good news is that Greaves continues to trade as Greaves & Associates 'Tax Consultants, Practitioners and Accountants'. " More than just accountants, we're your partners in business " says the website - greaves-associates.co.uk. The section on tax services helpfully advises that 'Tax services are the routine administ ration that needs to be carried out so that your company meets with government rules, and of course enables you to pay your tax on time.'
Tony Hetherington in the Financial Mail on Sunday (28/10/01) reports in an item on Liquid Acquisitions Ltd that:
'Department of Trade & Industry investigators have been making huge efforts to clamp down on a whole network of shady investment companies offering overpriced wine. Expect official confirmation in the next few days that the DTI is to ask the High Court to wind up Liquid Acquisitions in the public interest. Meanwhile, don't send a single penny to this bunch.'
I can confirm that the DTI have been clamping down on the claret web. Already this year Ashley Witter, Ashley White and Harley Fine Wine have been closed down in the public interest.
Heard from Aurora Menon?
While on the subject of Ashley White and Harley Fine Wine, if anyone is contacted by Ms Menon (previously a broker with Ashley White and a director of Harley Fine Wine) investdrinks would like to know. On past form Ms Menon's companies have an unfortunate habit of neglecting to buy the wines they sell.
More cancellation successes
investdrinks is delighted to learn that two further investors have received full refunds under the Distance Selling Regulations 2000 - one from Goldman Williams and the other from Liquid Acquisitions.
Vintage Assets International Ltd - launch soon
A new company in the City Vintners/ Goldman Williams stable is due to launch soon. Vintage Assets International Ltd was formed on 12th October 2001. Its registered office is 16 Grosvenor Place, London SW1X with Roman House, 10-26 East Road, London N1 6AD as the trading address. City Vintners and Goldman Williams also trade from Roman House. Mark Blackburn is understood to be the MD of the new company which is likely to feature first growth Bordeaux. Blackburn has been a broker with Goldman Williams Ltd. investdrinks has copies of invoices from June and July 2000 showing that Blackburn sold Château Margaux 1996 for £4,202.50 and Lafite 1996 for £4,869.26.
Keen followers of the tactics and pricing adopted by the claret web companies and the adverse publicity that this has received in various section of the Press will have read with some surprise and considerable hilarity a laudatory article entitled 'Uncorking a new sort of wine seller' on City Vintners and Goldman Williams in Sunday Business (14.10.2001) by Matthew Guarente.
The article is hilarious. I particularly enjoyed the sub-headline - 'City vintners bring a fresh bouquet to an industry hidebound by tradition'. guarente appears to have swallowed what he was told by David Jackson and Mark Sommerville, described as directors of City Vintners and Goldman Williams. Incidentally they are not: Jackson is the general manager of Goldman Williams, while Sommerville is understood to be general manager of City Vintners. The two directors of City Vintners and Goldman Williams are Andrew John Conyers Sommerville, Mark's father, and Raun Austin.
Guarente continues. 'The company has been criticised for selling these wines at high prices, and has even been tarred with the same brush as the well-chronicled investment scams where unwitting punters were sold wines that did not exist.'
Guarente goes on: 'How do they justify their business model? 'Wine is a business as well as an enthusiast's pursuit," says Jackson. "The industry says 'We'll get the client the wine at the best price'. That suits those who are passionate about wine, but there are so many people out there who are potentially passionate about wine - and the others' approach may not encompass them." (If investdrinks follows Jackson's tortured logic, he is saying that those who are 'potentially passionate' about wine are happy to pay twice and three times the price through City and Goldman.)
'The company's brokers bring new clients the idea of wine investment, although they steer clear of using the word. "We make it easy for them to look at wine as an alternative area in which they can speculate," says Sommerville. "We introduce them, explain how wine values have appreciated in the past, and tell them what to buy, how much, and how to store it, and when to sell it. It is a complete package."
guarente fails entirely to examine either this complete package claim or to look at the companies' pricing and whether investors could reasonably expect to see their wines accrue in value when bought at the prices charged.
guarente makes a brief and shallow attempt to look at the high prices charged by the two companies. He mentions that two companies on Winesearcher offer 'bottles of Pétrus 1945; one has it for £250, and the other £925. It is not clear whether guarente searched or whether this is what he has been told by Gary Boom of Bordeaux Index who is cited earlier on in the paragraph. Whatever he must have either misheard Boom or searched for the wrong wine or vintage. Winesearcher does have Pétrus 1945 but the bottle price varies from £1,972.79 for a Belgian bottling to £5,900 (duty and vat paid). Admittedly this is a wide range but the prices are published, there is no indication that the Pétrus is being promoted as an investment and at this age there many well be a big difference in the level of wine between bottles.
The light of what he was told and view of the following claim on their Web site 'Goldman Williams has a strong tradition in advising their clients on the most astute acquisitions; especially Bordeaux vintages.', there are a number of questions that should have been asked.
Questions that Michael Guarente should have asked, but didn't:
investdrinks would be happy to post responses to these from Raun Austin, David Jackson, Andrew Sommerville and Mark Sommerville on the site.
The threatened recession and the attacks on America may reduce the price of fine wine. The few auctions that have occurred since September 11th suggest that, although the price of rare and mature wines have held steady or increased, the price of younger wines is starting to soften. "We have held two sales since September 11th," says Thomas Hudson of Christie's. "Over the two 78% of the lots sold which is disappointing. More than 85% is good with 90% and above excellent. The current uncertainty kills the wine market, so there has been some softening of prices but this has not been dramatic. The decline in prices has been more pronounced with young wines."
Liquid Acquisition's recently lost customers
investdrinks was intrigued to learn that Andy Dunne, Liquid Acquisitions's company secretary, believes that "busy people like our service". Whether busy investors like the service sufficiently to pay, for example, £4,407.50 for a case of Latour 1996 when they find that it can be bought elsewhere for £1,800 - £1,850 is another matter.
In investdrinks experience as soon as clients of Liquid Acquisitions find that the company's prices are excessively high they either want to cancel their purchase or, if this is too late, to get their money back. Take one investor, who was persuaded only last week to consider buying a case of Latour 1996 for £4,407.50. The 'broker' from Liquid Acquisitions told them that the wine would increase by 30-40% a year and that this was a three to five year investment. Robert Parker would be retasting this wine next Spring and the word was that Parker would be increasing the score to 100. They were also told that Parker never lowers his scores. The client was told that they needed to make up their mind quickly as Liquid Acquisitions only had nine case of the Latour and that they could have no more than two.
It is not clear how Liquid Acquisitions can have knowledge of how Parker will reassess the Latour if and when he next tastes it. It is equally unlikely that Parker is aware of the existence of Liquid Acquisitions. It is also puzzling why LA's terms and conditions allow themselves up to 60 days to purchase the wine, when this conversation suggests that they already hold the wine.
Liquid Acquisitions are certainly speedy in getting out their contract notes. This client agreed to consider purchasing the Latour around 5pm and the contract note arrived by post the next morning. Fortunately the client had doubts. "It all sounded too good." A search on the net soon revealed that La's price was ridiculously high. The client will not be buying from LA - one busy person who does not like their service.
'I was nearly a new investor in the fine wine market. However, with much thanks to you, I have saved £2,500 which I was going to spend on a half case of Chateau Margaux 1996. They sent me a very flash brochure in an effort to persuade me to buy, plus numerous telephone calls. Thanks, great site!'
(A full case of Margaux 1996 can be bought elsewhere for between £2,000 - £2,200 in bond.)
Liquid Acquisitions exploit terror raids
'The American terrorist attacks are good news for wine investors' a putative investor was allegedly told by Henry Churchill, a broker for Liquid Acquisitions, last week. The investor reported the conversation in a brief email message to investdrinks. This was subsequently confirmed on the phone.
Quite apart from the disgust one naturally feels that someone is prepared to take advantage of the terrible events in New York, it is highly unlikely to be true. Historically the price of fine wine has fallen in times of recession. The economic aftershocks of the 11th September are far more likely to drive down the price of fine wine. In 1932, at the height of the Depression, there was only 4.5 million bottles of Champagne sold. This compares to the over 300 million bottles sold during 2000.
investdrinks invited Thomas Sloan of Liquid Acquisitions Ltd to comment but there has been no response as yet.
Fretwell another refund
investdrinks is delighted to learn that Peter Fretwell has finally refunded the family of the elderly doctor suffering from Alzheimer's who was 'sold' half a case of ??? from Harrington Ross. Unfortunately Fretwell neglected to buy the wine. The refund included 6% interest - details.
Liquid Acquisitions refunds investor
investdrinks is delighted to learn that an investor with Liquid Acquisitions Ltd has received a full refund through the Consumer Protection (Distance Selling) Regulations 2000.
In early July the investor paid £3,741.25 for a case of 1996 Haut-Brion. The investor soon discovered, however, that a case can bought elsewhere for around £1,150. The investor had queried the price before purchasing and allegedly was told that the high price of the Haut Brion through Liquid Acquisitions Ltd was because it was bottled at the châteaux and guarenteed pure so suitable for investment. The wine sold by other merchants at a cheaper price was for drinking and would not appreciate in value. If the investor was told this by a salesman at LA, he soon discovered that this tale was utter crap.
On 8th August 2001 an investor with Liquid Acquisitions Ltd wrote to the company cancelling an order for the case of 1996 Haut Brion and asked for a refund. On 13th August Thomas Sloan, the sole director of Liquid Acquisitions Ltd, told the investor that LA would not be refunding the money. investdrinks presumes that Sloan was not then aware of the right to cancel and statutory refund that The Consumer Protection (Distance Selling) Regulations 2000 allows.
Raun Austin Corresponds
On the 4th September Raun Austin, aged either 40 or 34 and a director of City Vintners Ltd and Goldman Williams Ltd, wrote to a number of the wine brokers/ companies who have pledged not to supply the claret web. Here are some extracts from one of the letters:
'I write to you in my capacity as a director of two wine companies: Goldman Williams Limited and City Vintners Limited.
My attention has been drawn to a Web site, hosted curiously in Canada and entitled "investdrinks" (www.investdrinks.org) containing investment advice. Mr Jim Budd writes, and is responsible for, the material appearing on this Web site The site contains a list of 35 wine brokers and merchants which, it is claimed, have pledged not to supply certain companies including the two companies of which I am a director. I am concerned about these claims and would like to know whether they are true.
Your company is included in the list of 35 companies who have apparently agreed not to supply my companies with wine. [I find this surprising as to the best of my knowledge our companies have never had any dealings whatsoever.] Should I find that either of my companies and their trading activities have been misrepresented to you in any way then I would wish to have the opportunity to write to you responding to any adverse information you may have received.'
Raun went on request information about the pledge not to supply and how it came about.
The following day investdrinks was contacted by several of the companies who had received Raun's letter. Wishing to supply what information I could, I faxed Raun an example of one of the letters sent to the companies who have pledged not to supply the claret web. I took the opportunity to raise several other matters with Raun:
'I am a little surprised to read that 'Your attention has been drawn to a Web site, hosted curiously in Canada and entitled "investdrinks" (www.investdrinks.org) containing drinks investment advice.' You will remember that I told you in a fax on 9th April 2000 that I had just launched investdrinks and I received a letter from your solicitors Saunders Bearman on 13th April 2000. To the best of my knowledge neither you, City Vintners or Goldman Williams have taken up the request made by Terabyte, investdrinks ISP in Canada to inform them of any inaccuracies on the investdrinks site.
Once again may I remind you of my undertaking to make corrections to material that I publish both in print and on the investdrinks site. Furthermore I am happy to offer you, City Vintners and Goldman Williams the opportunity to explain your wine investment business and pricing policy both on investdrinks and in Circle Update, the newsletter of the Circle of Wine Writers, that I edit.
It would be good to take this opportunity to clear up the mystery over your date of birth which I first raised with you in a fax on 16th February 2000. Which of the three dates given on Companies House records is the correct one?
I note in unsolicited letters sent by Goldman Williams to potential 'investors' in June 2001 and August 2001 that you make the claim 'As a market leader in the Wine business, Goldman Williams would like to offer you up to the minute information on this exciting market.' In which sector of the wine business are you 'a market leader'? In the over-priced wine investments sector perhaps?
If your information is indeed 'up to the minute' why are the wines you sell so excessively overpriced? May I commend to you a couple of sites that will show you the spread of prices in the fine wine market - www.financialwines.com and www.winesearcher.com. These will show you the sort of prices you should be charging if your investment clients are indeed to 'exceed the returns of more traditional markets' and to have any realistic hope of making a return on the wines they invest in.
I would also be grateful if you would let me know when your terms and conditions and literature will be amended to conform with the Consumer Protection (Distance Selling) Regulations 2000.'
I received a prompt faxed reply from Raun:
'You are correct I have written to some wine companies. You will note that I have written to them, not you.'
Although Raun's reply was somewhat brusque (due to any indigestible lunch perhaps?), investdrinks looks forward to receiving a fuller and more considered reply soon.
A chance to cancel and get a full refund?
The trading terms and conditions of the claret web companies do not appear to have incorporated the provisions of the Consumer Protection (Distance Selling) Regulations 2000 that became law on 31st October 2000.
Take, for example, the terms and conditions of Goldman Williams and Liquid Acquisitions:
2.2 Due to the unique nature of this product once you have returned the Purchase Order to us, generally it cannot be cancelled. However if you notify us that you wish to cancel the Purchase Order before we are committed to purchasing the product from the supplier we can cancel the Purchase Order and return any payment to you.
Taken from Goldman Williams Web site (26/8/01):
2.2 Due to the unique nature of this product once you have returned the sales order to us, generally it cannot be cancelled. However, if you notify us that you wish to cancel the sales order before we are committed to purchasing the product from the supplier we can cancel the sales order and return any payment to you.
Liquid Acquisitions July 2001
These two, intriguingly identical, clauses fail to comply with the new regulations. Under the new regulations anyone buying at a distance, for example over the telephone or on-line, has an automatic right to a seven working days cancellation period with full refund. The cancellation period starts from the day after the purchaser receives their goods. In the case of wine in a bonded warehouse, the cancellation period starts from the day after the wine has been transferred into the client's account.
If the purchaser is not informed of their rights then the cancellation period is extended by three months plus the seven working days. In Great Britain it is the responsibility of the Office of Fair Trading to enforce these regulations, while in northern Ireland it belongs to the Department of Enterprise, Trade and Investment. They have the power to bring injunctions against companies responsible for breaches of the regulations.
A sharp lawyer might well argue that as the 2.2 clause in the terms and conditions of both Goldman Williams and Liquid Acquisitions does not comply with the Consumer Protection Regulations 2000 the whole contract is null and void.
In any event anyone who has bought wine within the last three months and seven working days from Goldman Williams Ltd, Liquid Acquisitions or one of the other claret investment companies has a statutory right of cancellation and refund unless they were told in writing of their rights under the new regulations. Calculated on 27th August 2001, this means at the very least a purchase on 16th May 2001, assuming that the wine was transferred on that day to the purchaser's account. In practice it is likely that there will be clients, who bought from these companies prior to 16th May 2001, who are still entitled to cancel and to get their money back in full as the claret web companies tend to allow themselves the luxury of up 60 days to purchase wine ordered,
The first thing to do is to establish as soon as possible from the bonded warehouse where your wine is stored when the wine was transferred into your name.
A purchaser should give notice of cancellation 'in writing or in another durable medium available'. This means that notice can be give by letter, fax or email. In all cases the date of the cancellation is from the date that the message is sent so, for a letter, it is from the date of posting not from the date the company receives the letter.
The full refund must be paid within 30 days. The 30 day period starts the day after the cancellation notice has been sent.
The regulations come from the European parliament, so all EU members states will have similar legislation. The UK regulations can be found on www.hmso.gov.uk/si/si2000/20002334.htm and the DTI provides a short explanation for businesses on dti.gov.uk/CACP/ca/policy/distanceselling/newregs.htm.
Fretwell pays up
investdrinks is delighted that Peter Fretwell has at last refunded another of his customers (from Pembridge Villiers) for whom he failed to source wine. Now Peter there is just the little matter of sorting out compensation.
City Vintners recruitment drive?
investdrinks understands Ann Marie Tynan, the senior wine broker for City Vintners, strolled into Corney and Barrow's branch in Notting Hill Gate and asked about Pétrus. During a brief conversation with the shop manager she asked whether he would be interested in a job at City Vintners and whether he had a copy of his CV. investdrinks suspects that her enquiry was in vain since Corney & Barrow are one of the 35 companies who have pledged not to supply City Vintners and the other companies in the claret web.
Liquid Acquisitions have moved to: Dudley House, 145-147 Croydon Rd, Beckenham BR3 3RB. Tel: 020 8650 8833; fax 020 8650 8837.
Having refused to refund a client, director Thomas Sloan may now be in breach of The Consumer Protection (Distance Selling) Regulations 2000. As the wine ordered has yet to be transferred into the client's name at London Bridge Vaults, the client would appear to have a statutory right to a full refund. See details of regulations on main page.
Harley Fine Wine closed by DTI
On 8th August Harley Fine Wine Ltd was wound up in the public interest in the High Court following a petition from the DTI. The petition was not defended. investdrinks is delighted to see that the DTI has acted swiftly to close this company. Lynton Guest's previous claret investment company, which also involved Aurora Menon (a director of Harley Fine Wine), was closed by the DTI in January 2001 as the company failed to buy all the wine that it sold. As of 8th August no wine belonging to the company or its clients has been traced. Investigations are continuing.
investdrinks has been contacted by an investor who bought initially from Ashley Witter and who was then contacted by The Burbridge King Group early this year. Burbridge had details of the investor's Ashley Witter purchase. Having bought more wine from Burbridge King Group (stratospherically over-priced 1996 Troplong Mondot) were referred to Forrester & King Group as 'an execution only broker'. investdrinks is not clear whether 'execution' refers to the damage being inflicted on the investor's wallet.
It is curious that Peter Fretwell has decided not to limit his liability by registering The Burbridge King group as a registered company. Nor is The Forrester & Beck's Group registered. This company's paperwork is virtually identical to that of The Burbridge King Group.
Robert Parker claim - more rubbish from LA
investdrinks recently received a message from a putative client of Liquid Acquisitions. The sales pitch included the following high unlikely claim: 'They offered me a case of 96 Latour at £4,408 saying they had knowledge that Robert Parker would shortly award it 100 points and I could imagine what that would do to the price. (they rely a lot on Parker).'
Robert Parker is fiercely independent. It is absurd to think that LA would have any idea if Parker was about to revise his score on the Latour 1996.
Another putative investor with LA was told: 'At the moment we have no available wine. But our buyer is going to Bordeaux this weekend and it is possible he will be able to purchase.' investdrinks hopes that this means that Liquid Acquisitions are finding it hard to source wine in the UK because of the number of companies pledged not to supply. Today fine wine brokers conduct their business by phone, fax and email. They don't need to leave their offices to buy wine. Furthermore there are plenty of stocks of fine wine in London and elsewhere in the world, if the brokers are prepared to do business with you. Apparently the salesman was constantly questioning how much the putative client knew about wine.
Harrington Ross dissolved
Peter Fretwell's company, Harrington Ross, has been dissolved. It was founded in May 1998 and failed to file any returns or accounts. Pembridge Villiers, another company run by Fretwell although he is not a named director, was gazetted in February 2001. This, however, was suspended on 19th June but no returns or accounts have yet been filed so there may be a further gazette issued.
The Burbridge King Group
Peter Fretwell has told investdrinks that the 'Burbridge King Group seeks no further new or existing clients in fine wine'. Fretwell also adds that 'We do however have a very proficient complaints procedure, in that all matters of this nature are being addressed. I am glad that you are pleased to acknowledge the fact that clients from a previous company are being recompensed, albeit far more than their initial stake. This service will continue and we are dealing with all complaints as any company would in a suitable manner.'
This is commendable and investdrinks hopes that claims from clients of Harrington Ross and Pembridge Villiers that investdrinks has taken up with Peter Fretwell will be swiftly and fully resolved.
It emerged at the end of last week that Peter Fretwell is involved in The Burbridge King Group based at Regent Street in central London. Burbridge King are offering 1996 Troplong Mondot (St Emilion) for £4,200 a case which clients are told should increase by 10% in the first year. Highly unlikely as a case of Troplong Mondot can be purchased for £245 elsewhere. Question for Peter Fretwell: why is this investment case 1614% more than it should be?
Fretwell is the sole director of Harrington Ross, which has failed to file any returns or accounts, and ran Pembridge Villiers, which has also failed to file any returns or accounts. Both companies are in breach of UK Company Law and Companies House has issued a first gazette on both companies. Recently Fretwell refunded with interest an investor with Pembridge Villiers who was unable to trace their wine. investdrinks is aware that there are other cases where clients of these companies have been unable to trace their wine and is hopeful that these, too, will be speedily resolved.
Refund success for Liquid Acquisitions client
A client of Liquid Acquisitions Ltd, who was persuaded to buy a case of Mouton-Rothschild 1982 for £8,850 and two cases of Latour 1996 for £7,900, has just received a full refund. The current market price for these wines is around £7,350 making Liquid Acquisitions charge of £16,766.25 an excessive 128% over the odds. The investor was in the process of buying a case of Lafite 1996 for £4,868.75 but, having discovered investdrinks, was able to cancel in time.
Initially Thomas Sloan, Liquid Acquisitions' sole director, offered 72% of the client's money back claiming that was what LA had paid for the wines. Mention of the DTI, SFO and the House of Delacroix trial converted this into a full refund. Sloan, however, denied that the wines were over-priced. He maintained that although they could be bought more cheaply elsewhere, they were sold for a 5 year hold period as an investment and that LA was trying to corner the market in 82s and 96s, a strategy likely to bear fruit in 18-24 months. Apparently he also claimed that overheads were high in Beckenham.
Harley Fine Wine offer 1998s
Lara Miles of Harley has quoted a potential client prices on three 1998s from Bordeaux. These are Pavie-Macquin (£560), Haut-Brion (£1,280) and Margaux for £900. Although it is questionable whether 1998, with certain exceptions in St Emilion and Pomerol, is well suited to an investment punt, these are competitive prices. The wine searcher site shows L'Assemblage having the cheapest prices for all three: £500 (Pavie-Macquin), £1,275 (Haut-Brion) and £870 (Margaux). This would suggest either astute buying by Harley's directors', Lynton Guest and Aurora Menon, or that these wines are being sold at a loss. As Guest's previous wine company Ashley White Ltd was closed by the DTI because it failed to buy all the wine it sold, potential clients of Harley will wish to satisfy themselves that Mr Guest has remembered to buy the wine this time.
Two new entrants
Harley Fine Wine Ltd
This features the return of Lynton Guest and Aurora Menon. Guest was the sole director of Ashley White Ltd and Menon its senior dealer. Ashley White were closed in the public interest in London's High Court in January 2001.
Vaz and Alexander Ltd
This company is another new entrant into the excessive prices claret investment stakes. Founded in October 2000 and trading from 19 Cork Street, London, they are offering a half case of Lafite 1996 for £2,375 (£4,750 for a full case).
Special quality through buying direct?
Faced with their putative clients knowing the true price of the wines being offered some of the scamster companies are now claiming that 'we buy direct from Bordeaux to ensure that the bottles are of higher quality than can be found in the UK'. Newcomers Vaz & Alexander claimed to one putative investor that "they only dealt with Bordeaux direct and each bottle was x-rayed to prove it was the very best and the price was higher because of the guarenteed quality".
This is utter nonsense. Very few of the top châteaux of Bordeaux sell their wine direct. Instead it is sold through the Bordeaux merchants, who then sell it on round the world. Nor is it true that there are special bottlings. Most of the top châteaux bottle all of their grand vin (it) at the same moment.
Hal Babb and William Wallace Fine Wines Ltd
investdrinks was recently contacted by the William Wallace Foundation. They had had dealings with Hal Babb, late of Ashley Witter Ltd closed by the DTI in March. The ever persuasive Hall had told the Foundation that there was a lot of money in fine wine and that he could offer his expertise in setting up a new company (William Wallace Fine Wines Ltd). For a consideration of some £27,000 Hall could supply the necessary addresses, so that they could deal with the Bordeaux châteaux. Fortunately before parting with such a large sum of money they checked the web and came across investdrinks.
Webster Cohen & Galombik Inc
investdrinks' attention has been drawn to this new venture, an integrated research-based retail brokerage, which is based in Fort Jeudy, St George's, Grenada. Webster Cohen & Galombik is a wholly owned subsidiary of Salisbury Merchant Bank. The statement and terms of conditions can be found on the website (http://184.108.40.206/tandc.htm) and have been approved by the directors of the company as well as The Birches Company Ltd, which is based in the UK Andrew Conyers Sommerville, who is a director of City Vintners and Goldman Williams, is a director and company secretary of the Birches Company. investdrinks has been told that Raun Austin has an interest in the new venture.
|ASA reprimands City Vintners|
In a judgement published on 16th May 2001 the Advertising Standards Authority has upheld a complaint against City Vintners. The complainant from Derbyshire contacted the ASA when they had waited nearly six months for a free market report on Bass Group Plc offered by City Vintners Ltd. City Vintners explained that Mackay Financial who provided the reports were no longer in operation and they were 'finalising an agreement with another company that produced similar reports'. Over the past couple of years a number of putative investors with claret web companies have told investdrinks that they nenver received their promised company reports.
It is not clear whether the Mackay Financial is actually McKay Financial Information Ltd. There is no Mackay Financial listed at Companies House. There is no telephone listed for McKay Financial Information Ltd in London, where their previous trading address was or in Sidcup, place of their registered office.
Liv-ex information on real market prices
Liv-ex compiles a bi-monthly list of the best prices offered by the over 30 merchants and brokers that work with them. As this includes many of the top UK merchants this provides detailed information about current 'market prices'. The current list highlights the best offers from over £20 million worth of stock. Before the end of the year this will be going monthly and weekly on line. A subscription costs £100 a year. Further details from James Miles at firstname.lastname@example.org
The Pledge works
Frederic Achom, a director of Boington & Fredericks of London contacted Justerini & Brooks last week looking to buy Lafite 1996 at £1,995 a case. The business was refused because they sell on at £4,300 a case.
Timeless Goldman Williams
Anyone logging onto Goldman's site a looking at the Top Ten Hotshots section will see a report called 'Sotheby's Breaks Record in U.S. about a sale held by Sherry-Lehmanns/Sotheby's New York on April 22nd. Although the year isn't indicated, it would be reasonable to assume the sale was recent. Not so, it was held in 1995.
Stephen Mould of Sotheby's wine department comments. "It doesn't necessarily reflect what would happen now. A figure without a date is misleading."
Sterling & Murray
investdrinks understands from a source close to City Vintners that three brokers at Sterling & Murray are gearing up to a launch by mailshotting and various other marketing techniques.
Good news - Pembridge Villiers client receives £800 'compensation'
investdrinks is delighted to hear that the Yorkshire client of Pembridge Villiers, who bought six bottles of Mouton-Rothschild 1996 for £2,150 in December 1999, last week received a bankers draft from Peter Fretwell. The draft not only included the original sum but also approximately £800 compensation. Fretwell had promised the client a full refund in September 2000. There was no record of this wine at London City Bond. investdrinks is delighted that Fretwell has not only fulfilled his promised but paid generous compensation as well. The market price of Mouton-Rothschild 1996 has not increased since the investor bought it in December 1999. Farr Vintners listed it for £1,250 a case in September 1999. In their April 2001 list it is £1,200 a case.
City Vintners to put Lafite 1996 over £5,000
investdrinks received recently the following message from one of City Vintners' putative investors: 'I have recently been approached by the above, from a share holding I sold at least 3 years ago. They are sending me a contract note for Ch Margaux 1996 @£4,700. It has already gone up 11% this year! They expect to have limited quantities of 96 Lafite @ £5200-5300 in the next couple of months.'
investdrinks' correspondent has kindly sent in the contract note for the Margaux 1996 priced at £4,700 plus 2.5% commission which brings the total to £4,817.50. The covering letter promises 24 hour access to experienced wine specialists on our web site. Strange that these wine specialists appear not to be aware that back in November Farr Vintners were selling Margaux 1996 for £1,900 a case in bond, especially as Farr Vinters are one of the few leading brokers prepared to continue to supply the claret web.
investdrinks recommends that the directors and sales team of City Vintners consult winesearcher.com, a most useful site that lists prices of fine wine around the World. Currently they have cases of Margaux listed from Assemblage (£1720), uvine (£1,945) as well as Magnum Fine Wines (£1,995) and Vermilion (£1,995). If 'City Vintners are committed to providing an efficient and professional service to enable our clients to make knowledgeable decisions when purchasing the world's finest wines', they ought to find out what the rest of the world is charging.
Some might wonder at the 2.5% commission. Clearly the level of wine expertise demonstrated at City Vintners doesn't come cheap. Also investdrinks appreciates that the new hi-tech offices near Old Street are doubtless costly particularly all that sophisticated telephone monitoring equipment.
Two new sources of information
As well as looking at the highly recommended Wine Searcher, City Vintners ought to check out two new sources of fine wine market information.
Financial Wines Ltd has just launched a subscription price information service. Their price index provides the price spreads by region, wine, producer and vintage. Each vintage is listed with the current market prices, available stocks and a further "click" will take you to a listing of which importers or merchants are stocking the wines specified.
Wine trends winetrends.co.uk gives advice on buying at auction and en primeur as well as free information from wine auctions - price trends and which are the most popular wines to come under the hammer. The information is based on auction results at Christie's and Sotheby's since the beginning of 1997.
Anthony Rose on recent sale at Sotheby's
'Once again the 1997 Bordeaux vintage was left out in the cold, with only 13 of the 31 lots finding a buyer. Even the 1996 vintage, considerably superior in terms of its better quality, and less expensive to boot, struggled, with several dozens of Troplong-Mondot, La Fleur de Gay and Montbousquet unsold.' Read the rest of Anthony Rose's report on decanter.com.
Given the stock market difficulties, redundancies in the hi-tech and telecoms and the threat of a global recession, it is quite likely that prices of fine wine will fall. When times get tough it is much easier to cut back on fine wine than bread and potatoes.
Goldman Williams refund
investdrinks is delighted to learn that an investor with Goldman Williams, who bought a case of Lafite 1996 for £4,600 thinking it was an investment, has now had their money refunded. At the time of purchase the investor was unaware that the same wine could be bought for less than £2,000.
New entrant: Boington & Fredericks of London Ltd
investdrinks has been alerted by a putative investor that this company is offering Château Lafite 1996 for £4,300. The company was founded on 19th April 2000 as Redline Investments Ltd. It changed its name of 16th January 2001 to its current sonorous name. The registered office is 16/19 Southampton Place, London WC1A 2AX.
One Press Quote likely to be missed off
Goldman Williams have been keen to quote doctored chunks from Decanter's monthly auction reports. This paragraph from Anthony Rose (May 2001) is unlikely to appear on the Goldman site. Prices are for a case of 12 bottles and come from a recent sale at Christie's.
'There were more swings and roundabouts in the 1996 vintage with Lafite (£1,700), Latour (£1,400), Pichon-Lalande (£638) and Lynch-Bages (£352) all dropping back slightly, while Cos (£462), Durcru (£605), Montrose (£580), and Angelus (£440) along with Grand-Puy-Lacoste (£374), La Lagune (£220) and Gloria (£242) all gained ground.'
In the article Rose has some interesting things to say about the importance of a wine's provenance and its condition and the effects this can have on auction prices.
According to a well placed source, remarkably close to Goldman Williams it would appear that City Vintners and Goldman Williams may be turning over around £700,000 a month. This source has told investdrinks that a star performer at City Vintners generated sales of £230,000 in January 2000 alone. At 15% commission this would have brought the performer £34,500 for a month's work.
Raun Austin (DOB: 10.7.67) has a new company - Sterling and Murray Ltd. He is the sole director with Mark Somerville as company secretary.
Burbridge King go for record rip-off
Miles Halliday, senior dealer with the Burbridge King Group, thought he had sold a case of 1996 Troplong Mondot for £4,200. 'At all times we endeavour to provide you with a fully professional service,' Halliday claimed in his letter thanking the client for the purchase. 'As part of our on going service, Burbridge King Group shall be tracking and monitoring wine prices on the International Market, if we notice an opportunity for you to sell your wine(s) or part of your portfolio to release a gain, we shall contact you.
'A product in great demand, strictly limited in quantity, fine wine can be a source of lucrative financial returns. You don't need to wait for 50 years either!' (Burbridge King Group brochure)
Halliday and his friends at the Burbridge King Group will have many happy years (centuries? an eternity?) fleecing their customers before he needs to contact the Troplong Mondot customer. Farr Vintners have this listed at £245 a case. The low estimate for Sotheby's sale on 11th April is £17.50 a bottle (£210 a case) and a number of brokers list the wine for between £250-£300 a case. Instead of one case at an outrageous price you could buy over 17 cases from Farr.
New Entrant: Burbridge King Group
This is a new claret investment company. Its brochure is rather out of date as it claims that the big Andrew Lloyd Webber auction at Christie's was last year when it was actually held in May 1997 when prices were particularly high just before the economic crisis in Asia-Pacific. This is not a registered company and their address is only a service office in Regent Street.
Goldman's Market Update
Visitors to Goldman's website (goldmanwilliams.com) who look at the Market Update section are doubtless impressed by the auction reports. These are rather coyly introduced by: "The Wine Press recently reported that:"
It is hardly surprising that the pieces are authoritative as much of the content is lifted virtually verbatim from Decanter's monthly auction reports. Decanter is the best known internationally of the British based wine magazines.
There is some judicious filleting, either done due to lack of space or to distort the true picture and to deliberately mislead Goldman clients. Take one example from the Goldman Williams update of January 9th 2001:
'On the other side of the pond, however, our American counterparts were rather more busy. Buyers at a Sotheby's/Auden Cellars auction expressed a stratospheric opinion of the cellar of famous New York restaurant Union Square Café, by spending $343,620 on the 3000 bottles offered. Union Square Café has once again been voted the most popular restaurant in New York by the Zagat Survey for the fifth year running, and has been forced to unload some of it's cellar as it was running out of room.
Many wines bought by the restaurant had soared in value: a case of 1982 Le Pin achieved $24,150 and a superlot containing a mix of 1990 Lafite, Latour, Mouton-Rothschild, Margaux and Cheval Blanc achieved $33,350.'
Reading the original version of the second paragraph by Howard G. Goldberg (Decanter February 2001) is instructive.
'Many wines, bought early in the restaurant's 15-year history, had soared in value: a case of 1982 Le Pin sold for $24,150. The highest price realised was $33,350 for a 1990 superlot: one case each of Lafite, Latour, Mouton-Rothschild, Margaux and Cheval Blanc.'
A rather different picture! Clients of Goldman Williams may well wonder why the changes were made. Why does the Goldman version remove mention of the number of bottles being sold in the 1990 superlot?
investdrinks spoke yesterday to Sarah Kemp, publishing director of Decanter. An evidently angry Kemp said. "I had absolutely no knowledge of this and have never given permission for material from Decanter to be used in this way. I will be seeking legal advice from IPC (owners of Decanter) first thing on Monday morning."
Anthony Rose, whose work has been quoted without acknowledgement, said. "I was dismayed to see that Goldman Williams have quoted verbatim large sections of articles I have had published on auctions without my knowledge or consent, all the more so since, by editing out the less favourable news, they have ended up in some instances distorting what was originally written. It may suit their own purposes, but it won't necessarily give the full picture to their customers or anyone else reading their market reports."
Mr Rose will not need to consult his solicitors as he is a lawyer.
Goldman Williams' broking team day out
'November proved to be a particularly exciting month for Goldman Williams with the broking team attending a rather special wine auction at Christie's in London.'
investdrinks understands from a source at City Vintners that the following are in the Goldman team: Mark Blackburn, Danny Nuttall, Paul Reegan and Thomas Shard. What the Goldman Update did not report is that their brokers could not have bid in Goldman's name at Christie's as Christie's have pledged not to supply Goldman Williams and the other claret web companies.
A helpful suggestion - Goldman's disclaimer:
'Whilst all and every reasonable care has been made to ensure that the information contained herein are correct, accurate and timely, there is no guarentee that such information is accurate as of the date it is received or that it will continue to be accurate in the future.'
In view of the distortions introduced by Goldman's judicious editing of the wine press, perhaps the above should read: "Whilst all and every reasonable care has been made to ensure that investors are misled"... '
Hal Babb - Ashley Witter
It seems very likely that the man calling himself Harold Alexander at Ashley Witter is in reality a Hal Babb, who is a Canadian living in Croydon. It seems quite likely that he is closely related to the Hal Babb of Bradley-Ward, Austin and Babb, a company who offered penny shares and were based on St Vincent.
Unemployed County Antrim man cruelly deceived by Ashley Witter
What he thought was a wise investment for his daughters has turned into a cruel nightmare for Tom, who hasn't worked for the past three years. In July 2000 he was persuaded by Charlie Stimpson, senior dealer for Ashley Witter, to buy six bottles of Cheval Blanc 1996 for £1,600 (market price around £900 for case of 12 bottles). In September Tom bought six bottles of Mouton-Rothschild 1996 market price around £1,200 for case of 12 bottles) for £1,450. Stimpson thanked him for his purchases and promised that 'at all times we endeavour to provide you with fully professional service'.
Ashley Witter cannot have tried very hard. Tom's wine was supposed to be stored at the Cargo Bonding Company in Burton-on-Trent and he should have received storage details from them. Tom received no such documentation.Cargo Bonding Company told investdrinks drinks on 20th February 2001 that: "We have no records of any wine stored in bond, or an account in the name of Tom". Either Ashley Witter pocketed Tom's money or failed to transfer the wine into his name.
Concerned that he had received no documentation Tom contacted Stimpson. He was told that Cargo Bonding had made a mistake. In December Tom asked Stimpson to sell his wine. Nothing happened so, in January, he contacted Harold Alexander, who is believed to be in charge of the Ashley Witter office. Alexander eventually agreed to refund Tom his money (£3,050 less a £50 administration fee). The cheque for £3,000 drawn from an HSBC account at Gerrard Street, London W1 was sent on 31st January 2001. 'I hope this has brought the matter to an end,' wrote Alexander.
It didn't. Whether by mistake or design the cheque was dated 31st January 2000. It bounced. When Tom contacted Alexander he was told that Ashley Witter was being wound up. Tom made further calls. Alexander was not available but a Mr Babb was. Curiously Babb sounded to Tom remarkably like Alexander. On 22nd and 23rd February there was no response from Ashley Witter's offices. Perhaps Ashley Witter are being wound up. The question is - by whom?
DTI closes Ashley White
Ashley White Ltd, one of the claret web companies, were wound up in the public interest in the High Court in London on 24th January following a petition from the Department of Trade and Industry. It is clear from the Insolvency Service that the petition was granted because that the company failed to fulfil many of the orders placed and that they did not have sufficient finance to support the business.
False claim by leaderless company
Liquid Acquisitions Ltd, who still have no director or company secretary, are making absurd claims. In a letter to shareholders of Rio Tinto plc they claim that 'the vintage fine wine market is an excellent alternative to stocks and shares to complement your existing arrangements'. As an example they cite Château Margaux and Château Latour 1995 as examples which have 'comfortably doubled in value in the last two years'. Either Liquid Acquistions Ltd have no knowledge of the fine wine market or this is a lie. Very far from doubling 'comfortably in value' these two wines have performed miserably for investors since January 1998. Even the most sluggish building society account has out performed these two wines over the past three years. In January 1998 Farr Vintners were selling Latour at £1500 a case. Today's price (Jan 2001) is £1,450. Margaux is now the same price as it was in January 1998: £1650. The only people to have made any money on these tw o wi n es so far are those who bought en primeur in 1996.
Liquid Acquisitions Ltd
Recently Liquid Acquisitions were offering 1996 Haut-Brion at £3,280 and Latour 1996 at £3,843.75 both inclusive of 5 year storage and insurance. Potential buyers looking for a keener price might consider looking elsewhere as Latour 96 is currently available for £1,650 and Haut-Brion 1996 at £1,100. LA's price for the Haut Brion is 198% over the odds, while the Latour is a more modest 132%.
Anyone wishing to complain to a director of Liquid Acquisitions will be out of luck. There are no directors unless there have been some very recent appointments. LA are trading illegally as UK company law requires at least one director and a company secretary.
Financial Mail on Sunday: 14.1.2001
Liquid Acquisitions Ltd featured in Tony Hetherington's Questions of Cash column. Hetherington pointed out that the company has no directors or company secretary which is unlawful and is offering wine as an investment that 'are so overpriced that profit becomes unlikely or impossible'. investdrinks understands that Hetherington was told that a Tom Sloan (Sloane?) is in charge of the company. Apparently when he phoned up to speak to Sloan he was told that Sloan was busy in a meeting with someone from the Department of Trade of Industry. If this was indeed the case, investdrinks hopes that Mr Sloan furnished the DTI with very good reasons why the company is breaking company law.
£13,000 Château Pétrus 1995 from Goldman
News reaches investdrinks that Goldman Williams have been offering Pétrus 1995 for £13,000 a case. Doubtless over time this will accrue in value but anyone buying from Goldman will have to be very patient before they have any chance of seeing a profit. Corney & Barrow, the château's UK agents, have this available for £5,400 a case. Doubtless the £7,600 difference is explained by Goldman's unique level of service.
Ransby Hoare Associates in liquidation
On 11th December 2000 Ransby Hoare went into voluntary liquidation. Guy Harrison, Rutland House, 44 Masons Hill, Bromley, Kent BR2 9EQ has been appointed as liquidator. The company's total assets are estimated to be just £1,569.37, while the total debts are £99,837. This leaves an estimated deficiency of £98,270.13.
Apart from £13,900 owed to Geoffrey Ransby, the company secretary and a director as well as father of Alex Ransby who ran the company, £85,937.50 is owed to trade creditors. Most of the creditors actually appear to be private individuals, quite probably investors who had ordered and paid for wine. They are owed £68,124.26.
The activities of Ransby Hoare Associates Ltd was featured on the Liquid Companion (Radio 4) on August 5th 2000 and in late October/ early November on BBC Breakfast TV. They were also covered by the Financial Mail on Sunday. Among the other 'claret web' companies, Harrington Ross and Pembridge Villiers have effectively ceased trading, while Liquid Acquisitions Ltd continues to trade despite having no company secretary or director since 30th June 2000. This contravenes UK company law.
UK DTI close Croft & Dupont
Stephen Byers, the British Secretary of State for Trade & Industry,has petitioned in the High Court in London for Croft & Dupont to be wound up in the public interest. On 7th March the Court appointed the Official Receiver as provisional liquidator pending the hearing of the petition on 12th April.
Croft & Dupont, which offered red Bordeaux as an investment and operated mainly in Ireland, was founded on 8th February 1998. Joe McConville was the sole director and Mark Kenneth Butt, the company secretary. McConville used to be a salesman with the Napier Spirit Company, closed in the public interest by the DTI in 1997. Five directors of the Napier Spirit Company (Stephen Cleeve, Alison Dunne, Stephen Dunne, James Gourlay and David Haley have been disqualified as directors for terms varying from October 2003 to June 2012. McConville was a director of Connaught Belgravia, closed by the DTI on October 7th 1997. Connaught Belgravia had the distinction of offering a Champagne as an investment that had not been approved by the CIVC. Butt was a director of Montrose of St James's, a Champagne investment company that has now ceased trading.
The DTI's inquiry into Croft & Dupont revealed that 'a substantial proportion of the wine ordered by customers has not been purchased by the company which appears to have ceased trading and vacated its trading premises'. Croft & Dupont also sold personalised bottles of Champagne.
Vintage Wines BV, based in Amsterdam, has also been offering red Bordeaux as an investment at prices well over the market value. Sources have indicated that there may well be links between the two companies.
The Claret Investment Web
Current Goldman Williams prices
investdrinks understands from a putative investor that Goldman are currently offering Château Lafite 1996 at £4,730 and Château Margaux at £4,350 per case. The current broking price is around £1,900 a case.
Ransby Hoare and Pembridge Villiers on BBC Breakfast TV
On 31st October, BBC Breakfast TV ran a piece on the claret web based on the experiences of two clients of these companies. Chander Uberoi paid £4,160 for a case of Lafite 1996. investdrinks understands that Uberoi has been offered a full refund and looks forward to being able to report that he has received his money. The other client had dealt with Pembridge Villiers (not named) but his wine was never bought. Peter Fretwell has personally offered a full refund but this has yet to appear.
Peter Fretwell: Time to fulfil your promise
On 16th December 1999 a Yorkshire client of Pembridge Villiers Ltd bought 6 bottles of Lafite 1996 from the company for £2,150. Unfortunately it appears that Pembridge Villers never purchased the wine as there is no record of this client's wine lying at London City Bond.
On 6th September 2000 Peter Fretwell wrote to this client saying that he thought the normal documents and rotation number had not been sent. 'I ask for a few days to retrieve my records, as they are in storage, upon which you will receive full documentation of your purchase'. Fretwell then promised 'if you are still unhappy with the treatment you have received I will send you a full refund of £2,150.00.' As Pembridge Villers has apparently 'ceased trading' Fretwell sent this as a personal letter. On 9th September the victim accepted the refund and asked for 10 months interest. Nothing has since been heard from Fretwell.
investdrinks has confirmation that there is no Lafite in this client's name at London City Bond, so Mr Fretwell it is time to honour your pledge.
Message from a near victim who nearly bought a case of Lafite 1996 at £4,561.25
'As I have already explained during our telephone conversation I feel very foolish and gullible but more importantly angry that innocent people like myself are being "conned" into purchasing wine at almost two and half times the normal retail price. I wish you every success and good fortune in your endeavour to clamp down on the 'racketeers' bringing shame to your industry.'
If you believe that you have been "conned", please do write to John Gardner at the DTI and complain, giving full details of prices and what you were told.
John Gardner, Director and Deputy Inspector of Companies, Department of Trade and Industry, 10 Victoria Street, London SW1H 0NN. Send a copy of your complaint to your local MP.
Raun Austin Exposed in the Mail on Sunday
In the Financial Mail on Sunday (1st October 2000) Tony Hetherington exposed the activities of Raun Austin and his links to Stanley Riebeck Corporation of Grenada and Goldberg Kravitz of Barcelona. Both companies offer investment advice. The article also looked at Ransby Hoare Associates as curiously (probably a coincidence!) all three companies had offered a putative investor a free market report into MV Sports.
(investdrinks would welcome any information about a company called Bradley-Ward, Austin and Babb that was based in St Vincent and offered penny shares and a 'private placement'. The company's UK arm was apparently called BA&B Services Ltd.)
Some of the claret web companies are becoming hard to find:
Ashley Witter Ltd have changed their registered office from 72 New Bond Street to 42 Station Road, London SE20 7BJ. Although the Park Royal Business Centre has confirmed that Ashley Witter are still tenants, their phone is not answered at the centre. BT do not have any listing for Ashley Witter Ltd anywhere in London.
Ransby Hoare Associates Ltd moves to East Dulwich
Ranby's new address is 1a Playfield Crescent, East Dulwich, London SE22 8QR. 1a is part of the first of a row of terraced houses in a quiet residential street just off Lordship Lane. The new phone number is 020-8693 3383; fax: 020-8693 1809.
Pembridge Villiers have apparently moved to Unit 42, 145 Seymour Place, London W1H 5TL. However, BT have no number listed for Pembridge Villiers nor Peter Fretwell at this address.
Anyone seen Ransby?
investdrinks understands that Ransby Hoare left their premises at the Lombard Business Centre in Wimbledon about a month ago. The management of the business centre have no forwarding address or phone number. Nor have Ransby Hoare Associates informed Companies House that their registered office is no longer the Lombard Business Centre.
investdrinks has obtained some new contact numbers for Ransby. The new phone number is 020-8693 3383; fax: 020-8693 1809. These numbers are in the Dulwich/ Camberwell area of South London.
Message to Alex Ransby: please send investdrinks your new address, so that our records can be updated.
Ransby Hoare Associates Ltd plus other aspects of the claret web featured in the Financial Mail on Sunday 1st October.
More porkies from City Vintners and Goldman Williams
Two recently received emails give a flavour of how clients are being misled over the value of the wines offered:
I stupidly bought a case of Châteaux Margaux from Goldman Williams in the spring of this year. I was informed that fine wine was a good investment and thatthe wine which I was purchasing was expected to make considerable returns in the next few years.The representation made to me was that the wine was worth £3900 when clearly it was worth significantly less. I'll have to wait a long time for any increase from its true value. At no time wasI informed that the wine could be bought elsewhere for a fraction of the price. This week I was again contacted by Goldman Williams in order to persuade me to buy Haut Brion at a massive over value and the representative informed me that my wine was now worth £4,350!!!! that cannot be as it is available for sale at £210 a bottle in London.
(The £210 for bottle of Margaux presumably includes duty and vat, Goldmans prices are in bond without duty and vat. If Goldman Williams can show evidence of how they valued the Château Margaux 1996 at £4,350, investdrinks will publish this.)
After being approached by City Vinters Ltd, regarding buying 5 cases of each of these wines (Lafite 1996 and Margaux 1996) for just under £50,000, I decided to do some research, the brokers assured me that the Lafite would "quite conservatively double from £4,500 in 20 months. I asked him if these returns are realistic then why isnt everyone doing it, his answer was it is a very exclusive offer. This obviously made me suspicious.
The broker also told me that they were'in Bordeaux' trying toget some Pétrus & Chateau Blanc (presumably Cheval Blanc). Hesaid that their contacts allowed them to securePetrus below its market value of £19,500. They told me they could offer it to me at about £12,000 so I would be in automatic profit, they advised me10 cases and asked if this was in my budget, I said it was but I wasn't willing to invest any morethan £20,000-£30,000until I was sure of the market. He then spoke of having the best 1st & 2nd growth wines on my portfolio would give me between 15%-20% extra.
Here is a summary of my predicted returns:
Total in: £163,000; total out:£1,852,000. Not bad for 5 years! Thank you for taking the time to put this website on line it has saved me an awful lot of money.
: according to the winesearcher site Seckford Wines Ltd have the Pétrus 1996 at £4,200 a case ib and James Tait listed it at the beginning of August for £4,250 a case ib. Seckfords price is a mere £15,300 below the market value claimed by City Vintners.
A work of fiction?
No person selling wine from the offices of Goldman Williams may give a guarantee of performance in terms of capital appreciation at any time, or under any circumstance. Furthermore, no prediction, expectation, suggestion or 'guess' as to the likely performance may be given.
Brokers Manual, Goldman Williams
Since Goldman Williams and City Vintners have the same directors (Raun Austin and Andrew John Conyers Sommerville) assumes that the brokers manual for City Vintners will be similar to Goldmans. It is clear that brokers routinely ignore its instructions.
A busy time!
From the number of messages investdrinks has received recently the claret web companies, especially Goldman Williams, have clearly been very busy of late. Here are extracts from two emails.
A company called Goldman Williams contacted me recently to ask if I would be interested in buying vintage wine. I don't know where they got my details from but they knew that I invested in the stockmarket and what type of shares I invested in.
Goldman Williams are constantly calling me trying to get me to purchase half a case of Chateau Latour 1996 (rating 99) for a cost of £2,050. On top of this is a 2.5 percent commission charge and the same to sell. I have been told that in 20 months I could get a return of 300%. Do you have any advice.
This is a scam. The current market price for a case of Latour 1996 is around £1,550. Goldman Williams are asking the equivalent of £4,202.50. A return of 300% in 20 months is highly unlikely at the market price. At Goldmans exorbitant price a return of 300% would mean the Lafite 1996 costing £12,807.50! No chance - seeing a squad of pigs flying up the Thames would be much more likely. You should write to John Gardner at the DTI and complain.
Recently, I was approached by a company called Goldman Williams who are Wine Auctioneers and Brokers. One of their Brokers convinced me that the Wine Market as an alternative investment is a lucrative and generally secure one. I had been looking at the market prior and had read a lot about it and was keen to make a start with a small investment. The broker had told me that the Château Margaux 1996 had recently been given a 99/100 rating by Robert Parker and that it's value would show a solid growth and be much sought after in a few years. To be honest this sounded very attractive and as the Broker sounded very knowledgeable, I decided to go ahead and buy one case.
The case cost approx. £4100 plus a 2.5% commission charge to Goldman Williams. This includes 5 years of storage and insurance at London City Bond.
However, some research by the putative investor soon shed a different light on Goldman Williams prices and marketing techniques.
However, it seems that the average price of the Margaux is between £1600 to £1850 a case. When I asked the Broker the reason for this, his answer was that the Wines they handle are specifically for the investment and collectors markets and are stored at the right temperatures and in the right conditions. Therefore, I could expect a premium price because it would be in perfect condition when I looked to sell via auction.
London City Bond is one of the largest bonded warehouses in the UK. It is used by a large number of UK wine merchants including many of those companies pledged not to supply the claret web. Wine owned by clients of Goldman Williams are stored in precisely the same conditions as anyone else. The claim by the broker at Goldman Williams is completely rubbish or crap for short.
A Common Curriculum?
investdrinks has obtained copies of the Brokers Manual for Goldman Williams (July 1999) and Ransby Hoare Associates (September 1999). There is clearly very broad agreement between the two firms as the two manuals are virtually identical.
First here is a brief taster from the Ransby Hoare manual, then investdrinks prints the full Goldman Williams version.
'This document outlines the Company's policy when dealing with clients or potential clients who consider themselves as investors. This manual must be visible on the broker's desk whenever communicating with a client.' Ransby Hoare Associates
Company policy when dealing with clients or prospective clients who consider themselves as investors. This manual must be visible on a broker's desk whenever client liaison is in progress.
Goldman Williams sells only the finest Bordeaux clarets. The benefits of investing' in wine has been widely reported in press recently, and the area of the market place in which Goldman Williams operates is the primary focus for investment activities. Inevitably, clients of Goldman Williams are buying wine for this purpose.
Wine, however, falls outside of the scope of the Financial Services Authority (FSA) and does not hold official status as an investment. This means that there is no regulatory body for the industry. Much as it would be ideal for Goldman Williams to be licensed to provide investment advice, in the absence of a regulator this is not possible.
The purpose of this document is to provide all brokers selling wine from the offices of Goldman Williams with a clear understanding of how to approach such clients. By quoting facts rather than speculation, clients may be dealt with in a professional manner, and placed in a position to make an informed decision themselves as to whether a particular wine would be appropriate for them to purchase.
1. Use of the word 'Investment'
Regardless of its ability to appreciate in value, wine does not hold the status of investment and does not therefore fall within the scope of the Financial Services Authority (FSA). As such:-
No person selling wine from the offices of Goldman Williams may use the word 'investment' in relation to that wine at any time, or under any circumstance.
The use of the word "investment" is misleading to clients, and suggests the presence of a regulator. Clients of Goldman Williams do not fall under the umbrella of the Investors compensation scheme. Due to the nature of the product sold by Goldman Williams, it is accepted that clients are likely to consider their purchase as an investment, and therefore the following guidelines must be used when speaking to clients:-
· Prior to a client buying stock, it must be explained that wine holds the status of 'Wasting Chattel' with the Inland Revenue, rather than that of an investment.
· It is acceptable to explain that due to the Wasting Chattel status, any profits are generally free from capital gains tax (CGT). However, no guarantee of this may be given, as CGT may be payable under certain circumstances. Clients will need to consult an accountant if they require confirmation.
· If a client uses the word 'investment' to describe wine to a broker, then they must be corrected and re-informed of the status of wine as a Wasting Chattel.
· The word investment may only be used with reference to a client's share portfolio
· Use of the phrase 'bedding down wine for capital appreciation', or similar, is acceptable.
2. Performance Expectations
No person selling wine from the offices of Goldman Williams may give a guarantee of performance in terms of capital appreciation at any time, or under any circumstance. Furthermore, no prediction, expectation, suggestion or 'guess' as to the likely performance may be given.
It is likely that clients who are purely bedding down the wine for capital appreciation will request an opinion on the possible performance. The following guidelines should be used in such circumstances:-
· When discussing a wine, only incontrovertible statements of fact may be used (ie. If the same wine from a previous vintage performed well, then this may be stated. Equally, if that wine held lower grade then this is acceptable content).
· No suggestion may be made that such facts dictate equal or improved performance in terms of capital appreciation.
· If a potential client continues to push for a prediction on performance then brokers may choose to read the first paragraph of this page to the client in it's entirety.
3. 'Market' Price
The price of wine(s) sold by Goldman Williams are determined in-house, and clients may be able to find an identical wine at a different price elsewhere. Due to the wide range of pricing throughout the industry, it is difficult to determine the 'market' price, and therefore a client could argue that they were misled if such a statement is used. As such:-
No person selling wine from the offices of Goldman Williams shall state at any time that Goldman Williams charges the 'market price' for the wine, or imply that the client could not find the wine at a different price elsewhere.
Apart from substituting Ransby Hoare Associates for Goldman Williams, the wording of manuals is identical. It is highly unusual for investdrinks to agree with either of these two companies but we must applaud that they think it would be ideal if it were possible for companies to be licensed to provide investment advice. investdrinks would be very happy to explore with the claret web companies how we can persuade the Government to include drinks investments under the scope of the Financial Services Act.
How any client can make 'an informed decision' based on 'facts rather than speculation' and conclude that it would be 'appropriate for them to purchase' Lafite 1996, for example, in excess of £4,000 instead of for around £1,600 - £1,700, especially as the manuals admit that it is likely to be as an investment, is a considerable mystery. investdrinks would welcome any explanations.
investdrinks has to wonder brokers from Goldman Williams selling any wine if they have to bang on about wasting chattels let alone around £250,000 worth a month. From the emails and other evidence received either staff training at Goldman and Ransby Hoare leaves much to be desired or these manuals are a sham.
Well done Raun!
A couple of months ago investdrinks reported that the claret web companies had failed to file a number of items of statutory information with Companies House. It is pleasing to report that annual returns for Catchensure Marketing Consultancy Ltd and City Vintners have now been filed, while those for Goldman Williams are pending. Unfortunately the returns for Pembridge Villiers (30.6.2000) and Harrington Ross (16.9.1999) remain overdue as are the latters accounts (19.3.2000).
Instead of thanking investdrinks for the timely reminder, Raun would be best advised to run some staff training based around the brokers manual.
It would seem that those running Liquid Acquisitions Ltd are great admirers of Ransby Hoare Associates Ltd as the following quotation from a Liquid Acquisitions letter shows:
'Thank you for your time on the telephone, it was appreciated. Your interest in the exclusive, Vintage Fine Wine Market is the first step in a shrewd acquisition. The market for the very finest Bordeaux clarets is truly International where collectors from all around the world have seen some incredible returns. As discussed we have included a press article from the London Evening Standard for Your Perusal. The benefits from dealing with Ransby Hoare Associates in this very special market are:'
The Ransby version is identical except for:
'The benefits from dealing with Ransby Hoare Associates in this very special market are:'
Both companies send out the same three newspaper articles: Evening Standard 12th January 1998; Evening Standard 14th July 1999; Sunday Times Money 19th September 1999.
Liquid Acquisitions Ltd
Here is a new entrant to the selling of over-priced claret investments: Liquid Acquisitions Ltd, 50 Burnhill Road, Beckenham, Kent BR3 3LA. Tel: 020-8249 6086; fax: 020-8249 6029. Incorporated 23.6.2000. Companies House have no director or company secretary listed. I have been emailed by someone who was offered Lafite 1996 in excess of £4,000 and Lynch Bages 1996 at £835 a case (currently £330-340 at Fine & Rare Wines). The company has sent out letters offering a free market report and extolling the advantages of the 'vintage fine wine market' as 'an excellent alternative to stocks and shares to compliment (sic) your existing arrangements'. Apparently the company is run by an Andy Dunne. investdrinks has asked Mr Dunne for details of directors and company secretary but have not yet received a reply.
Ransby Hoare Associates growth claim
'Top 100 clarets have returned on average more than 30 to 40% annually for the last 20 years.' - Ransby Hoare Associates brochure
How accurate this claim is depends upon whether the increase is interpreted as a simple increase or compounded each year. If it is compounded, then it is nonsense. At 30% annual growth compounded on a case of Château Mouton-Rothschild 1982 bought en primeur for £300 would now be worth £25,951.39 and £57,015.21 in 2003.
At 40% annual growth, the value would be an even more extraordinary £91,473.87 now and £251,004.77 by 2003. If, however, the historic price increase of Mouton Rothschild 1982 from £300 in 1983 to £3,600 now is considered as a simple increase, it has risen by 1,100% over 17 years which averages out at 64.71% a year - a simple but not compound increase.
It is also not clear which properties Ransby Hoare counts as the 100 top châteaux. Decanter's Bordeaux index is based on the performance of 64 leading châteaux. It is clear from the Decanter index that the price performance of the lesser châteaux is much more modest than the leading châteaux - First Growths + the top properties of St Emilion and Pomerol.
Ashley Witter - Cheval Blanc 1996
Ashley Witter are currently offering a half case of Cheval Blanc 1996 for £1,500. The market price for a full case is around £1,100. Furthermore when looking to buy wine as an investment it is always best to buy a full case, which for Bordeaux is 12 bottles. Split cases are likely to be worth less and more difficult to sell.
Ransby Hoare Associates Exposed
As part of its look at fine wine, The Liquid Companion on Radio 4 (Saturday 5th August) investigated Ransby Hoare Associates Ltd. Phoned by Will Yates, posing as a potential investor, one of Ransby's salesmen talked of a basic capital increase of between 30%-40% per annum. Yates was quoted £4,166 for a case of Château Margaux 1996. The salesman also claimed that Ransby Hoare was the cheapest broker in London and that 1996 is the best vintage since 1945. He assured Yates that the value of the wine would not go down. He also claimed that French regulations mean that a Bordeaux château can only produce a maximum of 15,000 cases a year.
All of these claims are incorrect:
The current market price of Margaux 1996 is around £1,800.
Although 1996 is a good vintage, it is certainly not considered the best since 1945.
Prices of fine wines do go down - the Asian crisis of 1997 is one example.
The limit of 15,000 cases annually is nonsense. French appellation rules do control the amount of grapes that can be produced from each hectare. In the Haut-Médoc the basic yield allowed is 43 hectolitres per hectare, which is the equivalent of 5,375 bottles per hectare. For the communes (Margaux, Pauillac, St Estéphe and St Julien) it is 40 hls/ha - the equivalent of 5,000 bottles per hectare. The amount a chateau can produce depends upon its size. There are about 20,000 cases of Lafite produced annually, while production of the much smaller Pétrus is between 2,500 and 3,500 cases.
If Ransby's salesman is correct about 'the capital increase', the case of Margaux 1996 will be worth £15,468 by 2005 assuming an annual growth of 30%. On 40% per annum, this would total £22,406 by 2005. All things are possible but I would bet on seeing a squadron of flying pigs first.
Alexander Ransby, one of the directors of Ransy Hoare, was invited to come in to discuss t he programme 's findings. He declined but did send in the company's training manual which forbids any claims of capital appreciation and acknowledges that Ransby Hoare's wines are above the market price. It would seem that either Ransby Hoare's training methods are either ineffectual or tend to be ignored by their sales force.
Certainly Will Yates' experience is matched by that of the putative investor who had contacted Andrew Jefford, presenter of The Liquid Companion. The evidence provided by The Liquid Companion helps to confirm that there are good grounds for believing that Ransby Hoare and other members of the claret web set out to mislead the public as to the value of the wines they are selling and their investment potential.
There is anecdotal evidence from various investors who have been in contact with the claret web that the claims of investment potential made to Yates are not unusual. Furthermore letters and brochures from the claret web emphasise investment potential. Were Ransby Hoare's training manual and guidelines to be strictly enforced, investdrinks wonders what unique selling proposition Ransby Hoare Associates Ltd could make that would persuade the public to buy overpriced claret. Many of whom had not previously considered buying First Growth claret before they received the shareholder letter from Ransby Hoare Associates.
Fine Bordeaux now worth less than in 1996
According to the revamped Decanter Fine Wine Index, the average price of fine Bordeaux is now 11.04% less than it was in December 1996. In August 2000 it stands at 88.96 from a starting point of 100. This reflects the effects the Asia-Pacific economic crisis had on the price of fine wine in the second half of 1997 and which continued into 1998. Prices have since recovered since then but not yet to the level of 1996.
The Decanter Fine Wine Index was started in August 1998 with a starting point of 100. In July 2000 the old Bordeaux Index stood at 1155.05. The index has now been recalculated from December 1996 and includes vintages up to 1996. The considerable growth of the old index reflects both the increase in value of top Bordeaux over the last 22 years but also some periods of very high general price inflation.
In a letter headed 'Welcome On Board' Ransby Hoare's claim that Bordeaux prices have risen by approximately 47% since January 1999.
This is rubbish. Decanter's old Bordeaux index shows that the rise has been considerably more modest. Decanter's Bordeaux Index has risen by 15.7% between January 1999 (998.46) and July 2000 (1155.05). The index tracks auction prices of 64 top Bordeaux wines from best years (20 vintages) between 1961 to 1990.
Chart showing price movements on Margaux and Lafite
'What cannot be obtained is the quality of service our clients provide.' (Saunders Bearman, Soho solicitors 13.4.2000)
City Vintners and Goldman Williams service claims are bogus.
These two companies claim to offer 'added benefits of a high-level of service'. 'Much like hiring a personal shopper or going to a famous dress designer, clients know that they may be able to buy the wine elsewhere at a lower price, but they are happy to buy cases at this price because of the added value they receive'. They are, however, totally unable to substantiate these ludicrous claims.
On May 24th I faxed Jane Nead, the PR appointed by Goldman Williams and City Vintners, the following two questions:
To outline the services that the two companies offered that cannot be obtained through a traditional wine merchant or broker. Whether their clients were aware at the time of purchase that they could buy the wines very substantially cheaper elsewhere.
Despite Jane Nead's repeated efforts and promises that a reply would soon be forthcoming, she was unable to coax any response from either City Vintners or Goldman Williams to my fax of May 24th.
I received this email from her on 12th June:
Apologies for the delay in responding to your fax.
I regret to inform you that both Goldman Williams and City Vintners are unable to provide any comment or response to your questions at this time.
It is clear that City Vintners and Goldman Williams are unable to offer any justification for their absurdly overpriced claret investments. Unfortunately people are being fooled by the unwarranted claims made by these companies.
It is high time that the UK Department of Trade & Industry closed down these scams in the public interest.
The claret web companies claim to offer a remarkable level of service that cannot be obtained from other companies. They may do so. Whether it is worth the substantial price premium their customers have to pay is another matter. It is also not known whether their customers are aware at the time of purchase of the substantial premium they are paying for 'the quality of service our clients provide' that apparently cannot be obtained elsewhere.
Goldman Williams Ltd and City Vintners Ltd have appointed Jane Nead PR and Marketing to act for them. On 24th May I faxed the following two questions to Jane Nead.
Although I have had a number of promises of a reply, I am still awaiting (7th June) for any response to these questions. I can only assume that the service offered by the two companies is either so comprehensive that it takes at least two weeks to furnish the details or that they actually offer a similar or less comprehensive service than a traditional merchant or broker.
Here are details of the service three well established brokers offer:
Corney & Barrow
Corney & Barrow Broker Services is available to help customers buy and sell fine wines, and to offer professional advice on national and international market trends.
As a buyer, we would expect to match or better prices achievable elsewhere, either on immediate payment or broking terms. We welcome odd bottles as well as whole cases.
As a seller, the service has the unique feature that a large part of the wines for sale are offered on behalf of our own customers from their reserves, and have been in our cellars from the time when they were shipped.
Fine & Rare Wines Ltd
We offer free valuation on wines customers have purchased from us or other suppliers.
Advice on market conditions and trends.
Free use of out Internet site to watch price movements.
Introduction to London City Bond Limited who will open a rental account under their names, charges to be confirmed by LCB.
Personal service and recommendations. We are always looking to offer the best service to our customers and the best possible prices.
Seckford Wines Ltd
What we at Seckford do is very simple as regards our service for people who wish to invest in wines. Firstly we advise people as to the best wines to invest in and/or whether it is indeed a good/bad time to start speculating. We then sell them the wine at our list price, which is generally perceived as 'market price' and is comparable with our competitors on the open market.
What really sets us apart is that we can then store the wine in bond on behalf of the customer in our own temperature-controlled bonded warehouse, which like all bonded warehouses is overseen by HM Customs & Excise. The wine is clearly labelled as belonging to the customer and is insured at replacement value. The customer can of course visit his/her wine anytime he/she wishes. We charge £4.75 ex VAT per case (or part thereof) per annum for storage.
Finally should the customer wish to liquidate the asset we sell the wine on their behalf by putting it on our list and web site at the 'market price' and take a 10% commission. Alternatively we will negotiate a cash price and buy the wine outright, although obviously it is in our interests and the customers' to get the best price and do it on a commission basis. Not complicated but a tried and tested system that has made money in the past.
Buy wine in 60 days!
There is a curious clause in the terms and conditions operated by the claret web. They undertake to buy the wine ordered within 60 days as the example from Goldman Williams shows.
From Goldman Williams' Terms and Conditions:
2.3 Following the receipt by us of the Purchase Order and your payment, we shall purchase the product from a supplier as soon as is reasonably possible and, subject to the other provisions of these conditions, within 60 days of receipt.
I asked a reputable dealer how long it would take him to purchase a wine a customer had ordered. "About 40 seconds, the time it takes to make the phone call," was his reply. Yet Goldman Williams ask for 60 days! One would have thought that a company which claims that 'as part of our ongoing service, Goldman Williams tracks and monitors Wine prices on the International Market' would know that all it takes is a phone call. Perhaps this possible delay in purchasing is part of 'the quality of service our clients provide' (Saunders Bearman, Soho solicitors: 13th April 2000)
On January 10th 2000 Goldman Williams claimed in a letter headed Welcome to a new investor that 'Bordeaux prices have already increased approximately 15% since the beginning of this year!' This is also rubbish as Decanter's index makes clear.
Pembridge Villiers too fails to buy wine
Unfortunately following news of the failure of Harrington Ross to buy six bottles of Mouton-Rothschild 1996, investdrinks has learnt that Pembridge Villiers failed to purchase a case of Lafite 1996 for an investor.
Although there were no named individual directors for Pembridge Villiers, the brochures for Harrington Ross, Goldman Williams and Pembridge Villiers are virtually identical. investdrinks is looking into the possibility of running a spot the difference competition.
It appears likely that Peter Fretwell (Harrington Ross/ Pembridge Villiers) got into a terrible panic in the autumn 1999 when he was aware that the DTI were looking into the affairs of Harrington Ross. As Harrington Ross had bought little, if any, of the wine ordered since it began operation the year before, Fretwell rushed round buying wine to meet the orders. Then there was the problem of allocating the wine and Fretwell discovered that he had not bought sufficient wine to cover the orders.
Appeal to Peter Fretwell
Peter please get in touch with London City Bond on 020-7474 0505 and make arrangements to transfer the missing wine immediately. That will be six bottles of 1996 Mouton Rothschild and a case of Lafite-Rothschild 1996.
An even smarter move would be to refund both of these investors in full with something on top for the grief you have caused them. If need be, I imagine that London City Bond would be happy to supply you with details of the investors' addresses.
investdrinks undertakes to post news of either of the arrival of the outstanding wines or of full refund which will get even more prominence.
Return to the roots?
Millennium International Wine Sales Ltd changed its name to Catchensure Marketing Consultancy Ltd on 14th April 2000. The company started life as Catchensure Ltd.
Raun - time to get a grip!
Numbers never seem to have been Raun Austin's strong point. We still don't know his correct date of birth as sadly Raun has never disclosed which of the three used at Companies House is the correct one. More significantly you are not keeping up with the requirements laid down for limited companies. Many of the companies in the claret web are late in filing statutory information with Companies House.
Realising that Raun is a busy man, here is a list of what information is overdue at Companies House with dates when they should have been submitted:
Catchensure Marketing Consultancy Ltd (previously Millennuim International Wine Sales Ltd): annual return: overdue (20.5.2000)
City Vintners Ltd: annual return: overdue (15.5.2000).
Goldman Williams Ltd: annual return: overdue (19.5.2000)
Harrington Ross Ltd: annual return: overdue (16.6.99); accounts: overdue (19.3.2000)
You still have some 6 months left in which to submit accounts.
Pembridge Villiers Ltd: annual return: overdue (30.6.2000)
Hurry! There is still time to get this in within the 28 days grace.
Raun - Companies House have a useful free booklet entitled Annual Return. It warns:
Remember: It is a criminal offence not to deliver the company's annual return within 28 days of the made-up date, for which company secretaries and directors may be prosecuted.
Investdrinks' advice to Raun is to delegate. Your fellow director Andrew John Conyers Sommerville of Cadogan Square is a chartered accountant. He ought to be able to sort this out.
Telepathy is a wonderful thing
A shareholder in Pacific Media plc received a letter in late March from Ashley Witter offering a free market report into the company and extolling the advantages of the vintage fine wine market. 'Ashley Witter would like to take a few moments of your time to introduce you to this profitable market. As an investor, you may hold a diversified portfolio to maximise the returns on your capital. Profit made from Vintage Fine Wines are tax-free and as such can offer a very attractive alternative in your portfolio.'
The shareholder accepted Ashley Witter's invitation to find out 'how you could benefit from this attractive market'. He was quoted £3,750 for a case of 1996 Lafite. Curiously he was contacted shortly after by both City Vintners and Stanley Knight, although he had made no approach to either company. A Henry Wood of Stanley Knight quoted a case of Lafite 1996 for £4,048, while City Vintners matched the Ashley Witter price. He decided to buy a case from Ashley Witter. Fortunately the putative investor contacted the Malt Whisky Helpline and the order has now been cancelled.
Either Ashley Witter, City Vintners and Stanley Knight are all working in concert or this is an extraordinary example of the power of telepathy. investdrinks has decided to elect Ashley Witter and Stanley Knight to the claret web.
Harrington Ross - a clear case of fraud?
Alzheimer victim cheated
investdrinks has learnt that an elderly man, in the early stages of Alzheimer's disease, was persuaded by Harrington Ross in October 1998 to invest in six bottles of Château Mouton-Rothschild 1996 for £1,450. Fine & Rare Wines Ltd were recently offering a case (12 bottles) for £1,170. Even more shocking, it appears that despite the huge mark-up Harrington Ross never bought the wine.
In October 1999 Harrington Ross sent a large list of transfers to London City Bond among them the 6 bottles of Mouton 1996. This was 12 months after the Mouton had been ordered and paid for. However, enquiries by the family reveal that Harrington Ross failed to provide wine for this particular transfer. London City Bond informed Harrington Ross in November 1999 that they had not received the six bottles of Mouton. No explanation or wine has been forthcoming.
Attempts to track down Peter Fretwell, sole director of Harrington Ross, have so far been unsuccessful. Apparently he moved from 27 Fordwych Court, Shoot Up Hill, London NW2 3PH some nine months ago.
This gives some substance to the rumours that despite taking orders Harrington Ross (founded 19th May 1998) bought no wine in the first 12 months of trading. investdrinks has been told by well placed sources in the trade that in autumn 1999, knowing that the Department of Trade & Industry were investigating, Peter Fretwell rushed round trying to acquire the wines that Harrington Ross had already sold as an investment.
The Department of Trade & Industry have informed the family that Harrington Ross have ceased trading. Records at Companies House, however, show that Harrington Ross is still active - it is not in liquidation nor has it been dissolved. No return or accounts have ever been filed by the company. The first return was due on 16th June 1999 and accounts should have been filed by 19th March 2000.
It is mystery why the DTI have not moved to close Harrington Ross in the public interest. There appears to be a clear precedent. In June 1998 the House of Lonhroes was wound up in the public interest in the High Court on petition by the DTI because they were selling red Bordeaux investments with excessively high margins - at least 200%.
It is believed that the DTI investigated Harrington Ross during 1999. investdrinks is forced to wonder how thorough this investigation was.
At present investdrinks does not know whether the missing wine is an isolated incident or whether other investors may have been similarly defrauded. Given the interrelated nature of the claret web investdrinks hopes that this is indeed an isolated case.
investdrinks has now learnt (10/07/00) that Harrington Ross Ltd tried to sell the confused and elderly man more wine. In early December 1998 he was persuaded over the telephone to buy a further six bottles, priced this time at £1,400. Fortunately the man's wife and then son in law intervened and the order was cancelled. On 15th December 1998 the son in law wrote to John Justice at Harrington Ross cancelling the order and emphasising that the purchaser was 'suffering from Alzheimer's disease and has a very poor recent memory and significantly reduced understanding of financial affairs'. Despite the huge mark-up and knowing the elderly man's condition, it would appear that Harrington Ross never bought the wine.
This makes a letter he received from John Justice of Harrington Ross Ltd following his first purchase all the more cruel. Justice thanked him for his purchase and promised that 'at all times we will endeavour to provide you with a fully professional service'.
Stanley Knight Ltd
According to Companies House, Stanley Knight Ltd currently has no company secretary. The previous one resigned in early January. It is a requirement of company law that a limited company has at least one director and a company secretary.
Astonishing sales by City Vintners
A source very close to the claret web has told investdrinks that City Vintners is 'doing around £250,000 of business a month, while Goldman Williams is doing a little less than this'.
Pembridge Villiers account frozen
British Customs and Excise have just frozen Pembridge Villiers warehouse account. Perhaps they weren't impressed by the company's London accommodation address and director in Liberia. I hope this will prompt Customs & Excise to look at the rest of the claret web. And what about the UK's DTI? Surely time, they too, looked at the claret web.
Ransby Hoare quotes
Ransby Hoare Associates Ltd are quoting £3,950 for Lafite 1996 and £5,200 for 1986 Mouton Rothschild. Market price for the Lafite is £1,600-£1,700, while 86 Mouton fetches £2,200 at auction in the UK.
Why don't investors check prices before they buy?
Supply and be Damned?A number of UK fine wine brokers are supplying these companies with wine. Some are well aware of the investment companies' approach and pricing. Should they continue to supply? I am convinced that it is the brokers long term interest that they should refuse to supply. I understand that this can be a difficult commercial decision to make. If X refuses to supply, Y will probably do so. Furthermore the investment companies can use different names when purchasing from brokers. There is, however, a crucial difference between knowingly supplying and unknowingly supplying. If the broker is well aware that the wine is being sold as an overpriced investment and, should the investment company be found guilty of an offence, then it is possible that the broker could be charged as an accessory.
It is probably unlikely that a case would be brought but the chances woul d b e increased if it could be shown that they had either solicited sales from the investment company or had acted as agents for
these investment companies.
Sothebys sale for Harrington Ross clients?
investdrinks understands that a number of Harrington Ross clients have been told that their wines would be placed in a forthcoming Sothebys auction. Apparently they have been informed that the reserve price will be the price they paid for their wine - around £4,000 a case for Lafite 1996 and around £3,000 for Mouton 1996.
A spokesperson for Sothebys said. 'We have not been contacted by Harrington Ross. In any case we would refuse to accept these reserve prices because they are so out of line with the current auction price.'
It seems likely that some of Harrington Ross' clients will not be sleeping so peacefully in their beds as the claret web's promotional material suggests.
The Soho solicitors, Saunders Bearman, who act for Goldman Williams, City Vintners and Raun Austin, claim in their letter of 13th April 2000 that the level of service provided by City Vintners and Goldman Williams cannot be obtained elsewhere.
'Our clients do not accept that the wine they sell is overpriced. It can of course be obtained more cheaply elsewhere. What cannot be obtained is the quality of service our clients provide. This is clearly the attitude of 80% of our clients' customers who represent repeat, satisfied, business.'
investdrinks is intrigued that a level of service can be judged to be so unique that it can warrant a price differential of up to £3,150 on a case of 1996 Château Lafite.
We know about the 'headsplitting returns', the monitoring of the fine wine market and that 'Goldman Williams has a strong tradition in advising their clients on the most astute acquisitions; especially Bordeaux vintages.' (It has to be said that, as Goldman Williams Ltd is just a year old, this strong tradition has been acquired with impressive rapidity.)
Impressive though this service may be, is it worth £3,150? But perhaps investdrinks is missing something. Perhaps the Lafite has been bottled in a special silver plated bottle with a couple of encrusted diamonds?
investdrinks would like to hear either from clients of the claret web companies who are happy to pay £3,150 for the unique service or from the companies themselves to explain the nature of their unique service. Please click here to email us.
Goldman Williams have claimed to investdrinks' internet provider that the company is doing £2 million of business a month. Sources close to the company indicate that this claim is unlikely. Should it be correct, however, that Goldman does indeed have a turnover of £2 million a month by offering grotesquely over priced red Bordeaux - 'It can, of course, be bought cheaper elsewhere.' - Saunders Bearman (13th April 2000), solicitors to Goldman Williams) - while indicating 'head splitting returns', then this is all the more reason why the Department of Trade and Industry should take a very close look at Goldman Williams and the other companies in the claret web.
Potential purchasers should remember that Goldman Williams talk of headsplitting returns and that our company monitors trends in the vintage fine wine market based on present and past performance. All this reflects Goldman Williams commitment to giving advice tailored to individual specific requirements.
An over-zealous sales force can create headaches for any organisation. investdrinks learns that the claret web has not been spared this particular embarrassment. This week (w/b 10th April) a valued customer of one of East Anglias most respected wine merchants, specialising amongst other things in old vintages, told the merchant that a salesman from Goldman Williams had told him that Goldman was owned by London City Bond. Doubtless the salesman thought this falsehood would help to clinch the sale of some pricey claret by suggesting that these two companies were effectively one and the same.
London City Bond, one of the UKs leading bonded warehouse do store some of the wines held by Goldman Williams customers. But London City Bond do not own Goldman Williams.
This was quickly confirmed by Raun Austin, when informed of what the over-enthusiastic Goldman Williams salesman had been alleging. Indeed Raun has pledged to fire instantly any of his staff who claim that Goldman Williams is owned by London City Bond.
investdrinks heartily applauds Austins action. Raun may be unsure of his age but he can be decisive. investdrinks urges people to report any transgressor to Raun immediately. Telephone him on 020-7737 2448. Perhaps when you speak to Raun you might ask him what is his real date of birth. Then investdrinks and Companies House can put our records straight.
What do the following companies - City Vintners Ltd, Goldman Williams Ltd, Harrington Ross, Millennium International Wine Sales, Pembridge Villiers and Ransby Hoare have in common?
Firstly they all purport to offer a bespoke investment service for people looking to benefit from the highly profitable vintage fine wine market (Ransby Hoare) or as an excellent alternative to complement your existing portfolio (City Vintners).
City Vintners, Goldman Williams, Harrington Ross, Millennium International Wine Sales and Pembridge Villiers all offer as an investment 1996 First Growths priced at well above the market price and often at twice the market price. For instance, last December City Vintners offered a case of 1996 Lafite for £4,048.75. The unit price was £3,950 but there is a 2.25% commission charge. Farr Vintners have the same case for around £1,600. Similarly, Goldman Williams sold a case of 1996 Lafite for £4,048 per case.
This marked price discrepancy is curious as the websites for both City Vintners (cityvintners.com) and Goldman Williams (goldmanwilliams.com) claim that, as part of our dedicated customer service we track and monitor fine wine prices on the International market. And not only that. They are committed to providing a 1st class professional and efficient service, enabling our clients to make informed decisions when purchasing the worlds finest wines. We combine a friendly and thoughtful after sales support with our extensive knowledge for the benefit of others. Both sites talk of head-splitting returns. At these prices it is apparent that City Vintners and Goldman Williams will be enjoying head-splitting re turns but far from obvious for the ha pless investor that by diver sifying into fine wine that they wil l have maximised returns on th eir capital.
City do include five years free storage at London City Bond and insurance. However, should City Vintners cease trading before the five years this could be problematic as there is considerable doubt whether the cover arranged through H. Bernstein Insurance Brokers Ltd is indeed for five years. investdrinks contacted Bernstein and was told that their policy on wines stored at London City Bond is based on an annually renewable contract. We write to each of the insured parties with an invitation to renew the policy prior to renewal date each year.
All of these companies are recent. Harrington Ross is the oldest and was founded on 14th August 1998. Goldman Williams claims to have a strong tradition in advising their clients on the most astute acquisitions; especially Bordeaux vintages. This strength has been rapidly gained. For although they were founded in the previous millennium, it wasnt until 21st April 1999.
investdrinks understands from a source close to the investment companies that Goldman Williams and City Vintners are selling a lot of wine and that sales are probably running for each company is well into five figures. After all at £4,000 each, 250 cases equals a million pounds.
investdrinkss source has also spoken of the important role that Raun Austin plays in this claret investment. He is a director of Goldman Williams and City Vintners. He was briefly a director of Millennium International Wine Sales which has the same registered office as City Vintners. He is customer services manager for Landmark Holdings Ltd. Although Landmark is registered in Barnet, it uses Goldman Williams Effra Road offices in Brixton as a correspondence address. Landmark often purchases wine on behalf of Goldman. Landmark also have an address in the West Indies at Whitechapel, PO Box 1674, Kingstown, St Vincent. For someone so closely involved in investment, Raun Austin appears to have difficulty remembering his date of birth. Documents at Companies House offer a choice of three: 10/7/61; 28/7/61; and 10/7/67.
There is a marked similarity between the glossy brochures of Goldman Williams, Harrington Ross and Pembridge Villiers. Indeed for the first edition of the Pembridge Villiers brochure, the writer forgot to replace the name Harrington Ross in the text with Pembridge Villiers. Raun Austins business card uses the grapes and bottle motif found on the back of both the Goldman Williams and Harrington Ross brochures. Four of the companies brochures Goldman Williams, Harrington Ross, Pembridge Villiers and Ransby Hoare - use the same photo of a bottle on a pedestal with a glass of red wine
Surfers at the sites of Goldman Williams and City Vintners may choose to click on the Wine Guru heading. They will find this section devoted to Robert Parker and his influence. There are a list of quotes from various sources including the New York Times, Time magazine and Decanter. These quotes bear a striking resemblance to those of Roberts official European site. Hannah Agostini, who heads The Wine Advocates office in Bordeaux, has confirmed to investdrinks that Robert Parker has never been contacted by these companies, that he was entirely unaware that his name, details about his tasting method and the quotes were being used in this way. Agostini told investdrinks that Robert is now consulting his lawyers.
One investor with Goldman Williams had a lucky escape. He was contacted by Ian Sykes, a broker for Goldman Williams. The investor was told that the Lafite had increased in value by £1,000 between mid-December and mid-January and that they were expecting it to double in value over the next 12 months. By good luck Goldman Williams still had some cases available to the December price. He agreed to buy a case of Lafite 1996 for £4,048 but had doubts so sought advice from a financial bulletin board. He was warned that he was paying far too much for the case. The investor managed to convince Goldman Williams that it was in their best interest to return his cheque.
It is time the DTI took a good long look at this web of Bordeaux investment companies. In May 1998 the DTI closed down the House of Lonhroes in the public interest because the company had been selling wine investments, in particular claret, with excessively high margins. Furthermore on 7th March the DTI moved to close down Croft & Dupont Ltd, a claret investment company which has operating mainly in Ireland. (Link to news of other companies).
I contacted Raun Austin on 16th February 2000 and faxed him the questions I wished to ask him to avoid misunderstanding. Austin referred the questions to his lawyers. As of March 30th I am still awaiting a reply.
The Sunday Telegraph (London) picked up this story on 19th March 2000 warning that Internet investment wines could give buyers a headache. Although the Telegraph contacted all six companies, none of them were prepare to talk to the Telegraph. If they wont talk to a national newspaper, why should any investor take a chance with these companies. A legitimate company would surely welcome the opportunity to publicise their business.