Another week, another update on the latest goings on at Harlequin Property.
Shipleys appointed as joint administrator
It has been confirmed Shipleys LLP, has been appointed as joint administrator of Harlequin Management Services (South East) Ltd, which was trading as Harlequin property.
The move comes after Carol Ames, director of the company, made an application in the high court to place the company into administration citing adverse trading conditions caused by negative publicity.
Creditors of Harlequin have been asked by Shipleys to provide ‘Proof of Debt’ plus evidence to support their claim.
In a letter from Shipleys, seen by Investment Sense, Anthony Davidson, the Joint Administrator, said: “I am currently conducting a financial appraisal of the financial position with a view to achieving the Administration purposes.”
In response to the letter, Regulatory Legal, which runs the Harlequin Investor Group, said: “We are taking technical advice as to whether all investors need to register with Shipleys as creditors. Remember, all deposits were paid to Harlequin Management Services (South East) Limited (HMSSE). HMSSE acted as agent for the Caribbean companies.”
Pension investors asked to complete
David Ames, in his capacity of Chairman of Harlequin Property (SVG) Ltd, has written to SIPP (Self-Invested Personal Pension) investors.
The letter states: “We are pleased to confirm that Harlequin Property (SVG) Limited is working with SIPP / SASS (sic) providers to facilitate the completion of built property in the Buccament Bay Resort for their clients.”
The letter continues: “If you are in a position to fund the balance outstanding from your SIPP / SASS (sic) on your contract for sale in exchange for completion and transfer of title to the property reserved please contact the sales team for more information.”
Harlequin Property has previously claimed it is owned £30 million from investors yet to complete on their purchase. The letter to pension investors is clearly a move to drive completions forward and improve the cash flow of the beleaguered group.
However, we believe investors should be wary of completing on their property before more details of the ‘rescue plan’ are announced. We would also recommend taking legal and independent financial advice as to whether the investment constitutes ‘taxable property’ and as such could be liable to a HMRC tax charge.
Reacting to the letter from Harlequin, John Fox, Director of Liberty SIPP, said: “I would strongly recommend any pension investor or provider to head this warning from Investment Sense. To do this at this stage would be reckless given what has gone on before. I can’t believe that clients are being approached to complete when the company is in administration. I also think that they are right in pointing out “taxable property” issues. We have always had a nagging doubt about the “SIPPability” of this investment which is why we never allowed customers to do it. Conversations with the revenue back in 2010 were enough to put us off looking at the investment seriously.”
Whilst Gareth Fatchett of Regulatory Legal, said: “The Harlequin Investor Group is working hard with Harlequin to find a resolution to the current problems. At this time anyone looking to complete needs to be aware of the live Statutory Demands and the issues over the land title concessions. It is hoped these will be resolved shortly. Until they are, investors should be wary.”
Possible ‘rescue plan’
Following a meeting between the Harlequin Investor Group, representatives of Regulatory Legal and advisers to Harlequin Property, details of a possible ‘rescue plan’ have been announced.
Following the meeting the Harlequin Investor Group released a statement giving brief details of the plan and setting out the next steps. The statement said: “The plan is quite complex and it will involve investors amending rights under their existing contracts. This process will require investors to make an informed choice. There will need to be a financial promotion in the form of an Information Memorandum issued to all investors. This document is going to require advice and explanation. Harlequin Investor Group will be organising workshops to run through the ramifications. It is clearly inappropriate for Harlequin, sales agents or financial advisers to provide this advice as they are not independent to the existing circumstances.”
The full statement can be read by clicking here.
Agreement from Harlequin Property investors to any restructure of the group is clearly vital to the success of any ‘rescue plan’. At the present time though, it is unclear how much support will be forthcoming from investors, many of whom have already taken legal action, in the form of issuing Statutory Demands, against Harlequin Property.
Are you a Harlequin Property investor?
If you are a Harlequin Property investor you will naturally be concerned about the recent developments. The investors we have spoken to have had mixed emotions, however all have wanted to take some form of action.
We would recommend that Harlequin investors continue to monitor the situation whilst completing the Harlequin Property Serious Fraud Office questionnaire, which can be found by clicking here and also visit the website set up by Regulatory Legal: www.harlequininvestorgroup.co.uk/ for more news.