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September 2019

Park First Transfers £115m and Gets Away With It

Park First Transfers £115m and Gets Away With It 700 447 Dorset Tech

Park First is the trade name for a group of companies which sold car parking plots neat Gatwick Airport and Glasgow Airport to investors.  In this article we will highlight how Park First transfers £115m and gets away with it. No investigation is deemed necessary by the administrator at this stage. Instead the administrator comes forward with a proposal which ensures that creditors have to agree to wipe the slate clean and write off the missing £115m.

As usual this scheme collapsed because it was never a genuine and viable investment.  The car parking plots were sold without any form of independent valuation, at inflated prices so that some of the investors’ own money could be paid back to them under the guise of being “rental payments” from their plot. The truth is that the plots could never generate the levels of returns promised to investors.

The Directors of the four main companies involved in the car parking scam placed them into a Company Voluntary Arrangement (“CVA”).  In effect they appointed a supposedly independent organisation to come up with a rescue plan which would ensure that a huge chunk of money paid out in unexplained and very dodgy circumstances could be wiped off, the directors could avoid any form of recovery action or prosecution by creditors, and the directors could still come out of the CVA in control of the businesses despite the huge losses and missing funds.

The administrator’s report states that the Park First companies sold 6,290 car parking plots raising a total of £230m. That is a very large sum of money. The report then estimates the combined value of the two car parking sites is only £10.1m (although they state that this is an informal valuation obtained by the directors which means that in reality the realisable value is likely to be lower).

The administrator also states:

“there will be a £33m cash injection from companies and individuals associated with the companies in order to settle investors’ and creditors claims. It is intended that if the Buy-Back or Lifetime Lease creditors have any contingent or other claims against the Companies with regard to the manner and circumstances in which they acquired their investments, that those claims will also be determined and settled under the terms of the proposed CVAs”.

The administrator is asking creditors to approve the rescue plan and if enough of them do then ALL creditors “will be bound by the terms of the CVA of the company of which they are a creditor”.

What does this mean for investors ?  Well, if less than 10% of creditors oppose the proposals then it would appear that it will go through resulting in around £30m being paid out.  That is out of a total investment of £230m.  There has been no explanation as to what happened to the £200m ?

But, more importantly, creditors will lose their rights to prosecute the companies, directors and other parties involved in the scam. To add insult to injury the people who turned £230m into £30m will be allowed to carry on with the business.

This is not a genuine business which has fallen on hard times due to market conditions.  This is a business which set out to mislead investors from the very start.

Normally, when there is a “cash injection” made into a failed company by “companies and individuals associated with the companies” it means that these parties either took the money out under questionable and potentially dishonest circumstances, or they have money in their own bank accounts that should be paid into the companies’ bank accounts and they have been told it would be best for them to return it so that no questions are asked.

The administrator’s report confirms that the four Park First companies involved in the CVAs are owed a total of £115.4m by other companies in the Park First group, but that this £115.4m “has no recoverable value”.

They are actually saying that these four Park First companies transferred £115.4m to other group companies and there is no chance of recovering that money for the investors !  There has been no explanation why this money was transferred nor any explanation as to why is cannot be recovered.  The administrators are just expecting creditors to accept a loss of that magnitude because they tell them to.  So….. if creditors vote FOR the CVA proposals what effect would this have ?  Well, if they vote FOR the proposals they would be agreeing to the following:

  1. To write off £115.4m where the administrator has not even told them which companies took the money, why they were paid the money and why it is not possible to recover it; and
  2. To sign away their rights to be able to take any form of recovery action against any of the parties involved; and
  3. To allow the existing management to continue to run the businesses without any investigation into their conduct or the possible misappropriation of funds.

We are not creditors of Park First but if we were we would be voting AGAINST these proposals and would expect a lot more information and a full investigation into where the £115.4m has gone.

Earlier we mentioned the cash injection of £33m. That is apparently sat in an escrow account and the money can only be released if three parties agree to it. Those parties are Group First Global Ltd (the top company in the group), Toby Whittaker (controller) and the FCA. We hope the FCA will use their influence to ensure that a full investigation takes place in the public interest.

In our opinion creditors should vote AGAINST all the CVA proposals.  If they do not it will ensure that Park First has been able to transfer £115m to linked companies with no questions asked.  We find it incredible that creditors of these companies are being treated in this way.  The CVA proposal is effectively supporting and endorsing the potential theft of £115m.

N.B. Our original article was titled “How to Steal £115m and Get Away With It” but we were advised that there is no proof that it was stolen.  It would appear to have been a generous gift to Park First associated companies !

The FCA have issued their own update on proceedings which can be viewed HERE.

To view our more recent Park First article please click HERE.

To read more about other “investments” we are interested in please click HERE.

 

Allansons Update

Allansons Update 2000 1333 Dorset Tech

Allansons Update.

The Solicitors Regulation Authority has issued a warning to Allansons investors concerning a follow-on fraud which has recently been started. The warning can be viewed below.

Warning: Allansons LLP – Litigation Funder Update

2 September 2019

Allansons’ litigation funders have received a call from an individual purporting to be from or to represent the Solicitors Regulation Authority.

What is the scam?

We have been informed that some of Allansons’ litigation funders have received a call from an individual purporting to be from or to represent the Solicitors Regulation Authority.

We understand that the caller says that to secure the return of your investment, you must pay him 5% of the total funds invested.

The caller has identified himself as John Holt / Jonathan Holt and the number from which these calls have been received is (0207) 183 4172. It is possible, however, that different numbers and identities are being used.

Is there a genuine firm or person?

John Holt / Jonathan Holt does not represent the SRA. These calls are not made on behalf of the SRA and are not genuine. Please beware if you receive such a call.

Follow-on frauds are very common. We see them all the time. They are co-ordinated from the UK by a small group of people who are behind a very large number of investment scams. We reported the man who we believe to be the ringleader to Essex Police in February 2018. The scam team is very well organised and includes back-office service providers (they do all the admin for the scammers), sales agent networks, escrow companies, solicitors, accountants and, in our opinion, a friendly insolvency practitioner who helps scammers liquidate their companies very quickly without undertaking a proper investigation.

The sales network sells the scam product to investors. When the investment is about to be exposed the scammer will take it to the friendly liquidator who will help the scammer dissolve everything and act as ‘protector’ for the scammer. Their accountants help to hide the money and their solicitors write threatening letters to any organisation which causes trouble for the scammer.

Their scam team already has all the contact details of investors. It is commonly believed that these lists, known as ‘suckers’ lists’ to those in the trade, are sold on to the highest bidder. That may be true in some cases when a salesperson leaves a company and takes the list with them for personal use, but we believe it isn’t true in many cases.

Phase One for this scam team is to sell the initial scam product. They demand a high commission for their efforts, but they have to pass some of the money on to the project company.

Phase Two is to contact investors with their follow-on fraud. In Phase Two they can keep all the money because the project company no longer exists.

It has proven to be a very successful business model because they repeat it time and time again. We believe they were involved in the Allansons Litigation Funding project.

To view our previous post on Allansons LLP please click HERE

To view our more recent update please click here

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