An overseas property company promising 10% returns to investors in return for pension cash to build luxury holiday accommodation has been declared insolvent.
Harlequin Property SVG, a company based on the Caribbean islands of St Vincent and the Grenadines has announced a professional trustee has been appointed but denies the firm is bankrupt.
The company maintains the move gives breathing space for six months for ‘sorting out business affairs’.
Meanwhile, an estimated 6,000 investors who pumped £400 million of cash from their retirement savings into the property scheme are watching to find out if they will see any money back.
Harlequin Property SVG owns the land where the planned resorts were going to be built.
Disgruntled investors
Instead of the thousands of completed villas and apartments promised to investors, only a fraction of were finished and many investors have seen no return for their money.
Harlequin says declaring insolvency is aimed at protecting the interests of thousands of investors and employees.
The move also pre-empted a bid by lawyers in Britain to wind up the company.
Waterside Legal acts for around a thousand disgruntled Harlequin investors who were mostly advised to switch their pension cash into the troubled company by IFAs.
Because the Harlequin scheme was not regulated in the UK, the worst case scenario is they will lose all their money if the company goes bust without any claim on compensation through the Financial Services Compensation Scheme.
Watchdog warning
Harlequin Group chairman David Ames is said to be facing a police investigation in St Vincent relating to alleged theft and tax evasion amounting to £2.3 million.
British consumer watchdog the Financial Conduct Authority first warned IFAs not to recommend investing with Harlequin Property in January 2013.
Then the FCA said: “We urge financial advisers considering recommending consumers paying monies or further monies over to any of the companies in the Harlequin group at this time to proceed with caution.
“You should ensure that consumers fully understand the risks involved with the investment. You should also advise consumers to obtain legal advice from lawyers in the country where the property is located before proceeding with any investment in a company in the Harlequin group.”
