London Capital and Finance

Southeycapital

Reaper wrote: »

I confess to be no expert on the subject but the type of bond on offer here was a "mini-bond", which is little more than an unregulated loan. Unlike a retail bond (company bond) I don't think there was anything tangible to issue. It is not a tradeable product. But I am happy to be corrected.

From what I am reading your right, they had no reason to be called mini bonds , like the original Lehman mini bonds that were sold in Hong Kong to retail investors

In the case of loans to the company, I wonder why then they appointed a Trustee, and what he was Trustee off.. normally a Trustee's role is to hold the security and bond/loan note in Trust for the benefit of the participants in that issuance. So far here there doesn't seem to be documentation to say what you bought and where your money went.

Malthusian

Southeycapital wrote: »

From what I am reading your right, they had no reason to be called mini bonds , like the original Lehman mini bonds that were sold in Hong Kong to retail investors

I believe in UK terminology the Lehman bonds would be called "structured products", a different type of security.

In the UK a "minibond" is an unlisted loan note offered directly to the public. At best it is a means for companies to raise cheap capital from gullible punters (often with a loyalty marketing gimmick). At worst it is a means for scams to raise free money from gullible punters.

Back in 2015 when the first generation of minibond scams collapsed, the Guardian ran an article entitled "If you see something marketed as a minibond, bin it!" which tells you everything you need to know.

In the case of loans to the company, I wonder why then they appointed a Trustee, and what he was Trustee off.. normally a Trustee's role is to hold the security and bond/loan note in Trust for the benefit of the participants in that issuance.

The administrators stated a while ago that the "Security Trustee" was completely pointless. But "Funds Secured By Security Trustee" sounded good in the advertising material.

So far here there doesn't seem to be documentation to say what you bought and where your money went.

Read the administrators' proposals - they have detailed where the money went.

Southeycapital

Malthusian wrote: »

I believe in UK terminology the Lehman bonds would be called "structured products", a different type of security.
.

Thanks Malthusian

Not to go off piste.. I thought originally Minibond was actually a brand name invented by Lehman. Structured products can be in the form of mini bonds, bonds or what ever you like, i would have thought most people consider a Structured product if a "thing" has a formula in the coupon or capital on repayment.

In terms of where the money went..take your point, having only skimmed over the report, I had in mind the actual step by step transfers of cash movement.

Reaper

Malthusian wrote: »

Back in 2015 when the first generation of minibond scams collapsed, the Guardian ran an article entitled "If you see something marketed as a minibond, bin it!" which tells you everything you need to know.

Just out of interest IPM who they warned against in that article did eventually have the FCA partially restrict their activities very late in the day (end of 2017), and sure enough they appointed a liquidator a couple of months ago.

Malthusian wrote: »

Read the administrators' proposals - they have detailed where the money went.

Apart from the missing £135 million!

Southeycapital wrote: »

I thought originally Minibond was actually a brand name invented by Lehman.

It is and that is what comes up when you type it into Wikipedia. But that is very different to all the mini-bonds that have been issued in the UK aimed at retail investors.

Malthusian

Southeycapital wrote: »

In terms of where the money went..take your point, having only skimmed over the report, I had in mind the actual step by step transfers of cash movement.

Step 1 investors handed over a bunch of money, step 2 it disappeared. That's about the long and short of it. Exactly how LCF moved the cash around is a matter for the administrators, but not one that's likely to be discussed in great detail in its updates, as it's not very important from a creditor's perspective. It may be interesting to you as someone involved in insolvency, but if you want more detail you'll probably have to ring S&W and ask if they want someone to assist as a consultant.

True, not all of the money has literally disappeared as some of it is still floating around in firms like Independent Oil and Gas. The purpose of a scheme like this is to allow the maximum amount of money to be extracted while minimising the risk that the scheme is shut down or collapses prematurely, and the risk that even an organisation as incompetent as the SFO can pin fraud on you. The second part of the equation involves moving some money into investments that either appear, or are, legitimate, to serve as a magic wand ("look over here at our loans / buildings / wind farm / crypto mine!").

This is why just under £40m went into an apparently genuine AIM-listed energy firm with genuinely valuable energy interests, rather than straight into individuals' pockets or worthless projects that exist only for their benefit. (Although how exactly LCF chose that particular energy firm to invest in is as yet unknown.)

About the only novelty of note in LCF's cash movements is the fact that LCF loaned out the money to shell companies, and these shell companies were then responsible for paying Surge their £60 million. This meant that the resulting £60 million hole didn't appear on LCF's published accounts, as the shell companies still owed LCF £230-million odd in aggregate and assets of £230-million-odd were therefore recorded on LCF's books.

By contrast Blackmore Bonds didn't think of this, and the resulting £7 million deficit between its liabilities and its assets (of which £5m is its payment to Surge) are there for all to see in the accounts. (But very few people bother to look.)

Reaper wrote:

Apart from the missing £135 million!

Well it's not actually missing in the sense we don't know where it is. Southeycapital asked where the money went, and they're clearly smart enough to read between the lines.

Supercalafragalistic

Hang on a minute...i’ve regressed in my knowledge here.
I shall speak in 100’s rather than mills so its easier to compute.

Fred (surge) wants to raise £100 to give to mr slate (lcf)

He asks Barney for the money and says he will pay him £10 a year interest , and give him the £100 back in 3 years.

Barney gives fred the £100

Does fred give mr slate a. The £100 but charges him £25 for his time , plus £10 a year to give to Barney?

Or B. Does fred give mr slate £75 , keeps 25 for his trouble and mr slate pays back £10 a year to Barney

Or C. Does fred give mr slate £125 plus 30 to cover the interst and......then what happens...this is where i am lost?

masonic

Supercalafragalistic wrote: »

Hang on a minute...i’ve regressed in my knowledge here.
I shall speak in 100’s rather than mills so its easier to compute.

Fred (surge) wants to raise £100 to give to mr slate (lcf)

He asks Barney for the money and says he will pay him £10 a year interest , and give him the £100 back in 3 years.

Barney gives fred the £100

Does fred give mr slate a. The £100 but charges him £25 for his time , plus £10 a year to give to Barney?

Or B. Does fred give mr slate £75 , keeps 25 for his trouble and mr slate pays back £10 a year to Barney

Or C. Does fred give mr slate £125 plus 30 to cover the interst and......then what happens...this is where i am lost?

The situation is closest to B, but there's a balancing transaction in which W.C Cogswell borrows £100 from Mr Slate and receives £75 net of Fred's fees.

Supercalafragalistic

masonic wrote: »

The situation is closest to B, but there's a balancing transaction in which W.C Cogswell borrows £100 from Mr Slate and receives £75 net of Fred's fees.

Gotcha! Thanks.

sully1311

Well well well.... hasn’t the top isa rates site changed a bit!

Rubclucker

I have been looking around at this TOPISARATES web site and I have found that the unscrupulous 'company' SURGE are doing the exact same thing for THE GROUNDS that they did for LC&F!!!

They are answering calls, doing the marketing (that is very similar to LC&F and BLACKMORE BONDS) and everything else exactly like before. Try it yourself, ring them and ask some questions like me.

Do these people have NO SHAME??? Set up another one as soon as LC&F tanked??

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