Britain’s consumer financial services regulator is urging investors to think twice before paying any cash to the beleaguered Harlequin group of companies.
Harlequin develops hotels and resorts overseas, mainly in The Caribbean, which were then often sold through independent financial advisers to investors in the UK.
Many were bought as part of a self-managed pension, like a SiPP.
In January, the FCA warned financial advisers about recommending Harlequin’s overseas property investments.
Since then, says the FCA, the concern over the investments has deepened.
In March, the Serious Fraud Office stepped in to launch a joint investigation with Essex Police concerning complaints from investors about Harlequin.
The SFO is appealing for unsatisfied customers to get in touch.
Proceed with caution
In April, Harlequin Property filed for administration
In May, Harlequin Properties and Resorts contacted investors to tell them Harlequin Property SVG Ltd is working with self-managed pension providers to finish building at Buccament Bay Resort on St Vincent in The Caribbean.
The letter urges investors to complete purchases – but lawyers and the FCA are warning them not to hand over any cash.
The FCA warns that Harlequin Property SVG is not regulated by the FCA and not incorporated in the UK.
“If you are thinking about investing with the Harlequin Group, then our advice is to proceed with the utmost caution,” said an FCA spokesman.
“Make sure you fully understand the risk involved as the SVG company is not covered by the UK financial compensation scheme or the Financial Ombudsman.
“Our recommendation is for prospective investors to go through the investment with a qualified and experienced financial adviser and to obtain advice from independent lawyers in the country where the property is being built before parting with any money.”
Unhappy investors
Around 3,000 British investors have ploughed between an estimated £250 million and £300 million into the troubled property group.
While Harlequin claims about £30 million is owed on completed properties by investors, lawyers claim only 300 out of a promised 6,000 luxury resort properties have been finished.
A Harlequin investor group set up by lawyers has proposed the company works ‘toward a sensible solution’ by transferring assets to a trust set up for the investors.
Lawyers have revealed they believe Harlequin is ‘cash-starved’ and doubt the business can continue without an injection of fresh funds.
The FCA warning to investors would seem to make raising that investment from any regulated source doubtful.
