Beleaguered Harlequin Property has gone in to administration, blaming waves of negative publicity in the media.
Many self-invested pension plan (SiPP) savers invested in Harlequin luxury resort developments in the Caribbean.
However, investors have complained that few properties have been started even though around 5,000 have been sold off-plan.
The final nails in the Harlequin business plan were an out-of-court settlement with one disgruntled investor and a warning to independent financial advisers to be wary about recommending Harlequin to clients from the Financial Conduct Authority.
The company’s directors say that administration is the first step to a rescue and will let them deal with the current market challenges.
Negative publicity
The firm is run by Essex-based businessman David Ames, but he says that he too is a victim in the situation and points to an on-going court case in Ireland with a property developer who is alleged to have taken millions of pounds without building any properties.
Harlequin said in a statement that the ‘unfounded negative publicity’ began in 2011 and this has led to challenges in the firm’s trading ability which is now, they say, ‘impossible’.
The directors claim that their business model is strong and that with external financing, their investors will begin to see completed resorts in the near future.
They add that investors shouldn’t worry that the current circumstances are endangering their investment.
There’s also another legal problem for Harlequin who are currently at loggerheads with their previous auditors.
Auditor problems
The firm, Wilkins Kennedy, resigned in 2010 and are contesting claims being laid by Mr Ames that they were negligent in their duties and declined to comment.
However, the current auditors, BDO, have also had issues making Harlequins numbers add up – and they have declined to sign off the 2011 accounts.
Allegations made in the media have dogged Harlequin in recent months and investors in the luxury developments are unlikely to see a resolution any time soon.
Harlequin has attracted a lot of money into investments and even had celebrity football pundit Andy Townsend front a glossy advert for their website.
He was promoting a new luxury five-star resort for Harlequin on Barbados called Merricks, but so far all that sits on the site are two show homes and a hut.
