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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 cheryl.lambert@insolvency.gsi.gov.uk. 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. 1959-2000 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 marc.symons@insolvency.gsi.gov.uk 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?). Further reading: 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. Everlasting con? 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. (Posted 20/5/02) 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. Monticello plc 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: 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. Liquidators Appointed 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: Dear Jim 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 COURT 18 Liquid-Hewitt relocate 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. (Posted 10/12/01) 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. Goldman refunds 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.' DTI Clampdown 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. 'Guarented Nonsense' 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. Price decline? 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 - &p |