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Tuesday, 4 December 2012

Cult Wines Ltd rejects WIA


   
Cult Wines Ltd were invited to be one of the founder members of the WIA. In this statement the co-directors explain why for the moment they have rejected membership:


Statement provided from Tom Gearing & Philip Gearing – Co-Directors of Cult Wines Ltd:



The Wine Investment Association



Cult Wines Ltd would like to recognise the WIA and applaud the founding members for their efforts in launching the introduction of regulation into the fine wine market.

Cult Wines were initially invited to participate as founding members but felt however that there were two key areas that would need to be addressed before we could consider membership;

-          The issue of cold calling is currently approved by the WIA and whilst the members may adhere to certain guidelines we firmly believe that this practice should be not be acceptable under any circumstances.

-          We would prefer to see this type of regulation managed by a completely independent body supported by the members rather than a form of self-regulation.

••

Cult Wines Ltd are not alone in finding cold calling an unacceptable practice. The Financial Services Authority (FSA) bans cold calling to strangers for investments that come under its remit. Companies may cold call existing customers but only if they are anticipating a call. 

The Wine Investment Association cannot expect to be taken seriously until it bans cold calling to strangers and comes into line with the FSA rules and guidelines. See here.   

Albany Vintners buys Vinance data base and takes over management of clients' stock


Locke King Vaults – cases stored in one of the tunnels 

The client database of Vinance plc, which went into administration on 16th November 2012, has been bought by Albany Vintners Ltd. Set up in 2003 by Marcus Edwards, who had worked for leading fine wine merchant Farr Vintners for 10 years – last four as their accountant, Albany Vintners is based in Cambridge. It offers its own in bond storage facilities through Arc Reserves using dedicated storage at Locke King Vaults, the fine wine storage section of EHD Bond.

Albany/Arc will take over the management of client accounts.

I
understand that there were eight other bidders.

It is still down to the administrators, Herron Fisher, to discover what Vinance plc's deficit is and to ascertain what the position is in regard to any en primeur wines ordered by its customers. Whatever the level of Vinance's debt is, this is separate from the deal with Albany Vintners Ltd.
Marcus Edwards comments: “Already we have had customers of Vinance contacting us to sell their wine. We expect to be able to help as we have a wider distribution network than Vinance – we sell to the trade, to private clients and also to export markets. We have still to sort out commission rates for these clients.



Vinance plc charged a 25% upfront commission on purchase but 0% on selling.
investdrinks asked Edwards whether the client database would be passed onto Albany Portfolio Management Ltd, an associated company offering wine investments and a founder member of the Wine Investment Association.

"These are two separate businesses. Our main priority is looking after the stock.  Passing on the database to Albany Portfolio Management is not a priority, we haven't considered this as a possibility. It is something we are unlikely to do."



As listeners to Saturday's BBC Radio 4's Moneybox would have heard the directors of Vinance plc were more concerned to score points rather than express regret for the collapse.

It is encouraging to see that the database has been bought by a company with a good reputation and not by a white knight operation set up to mislead investors caught up in the collapse of Vinance plc. Unfortunately this was not the case when Bordeaux UK Ltd went down in November 2011, when Vin Bordelais emerged using the same website and the same phone number as Bordeaux UK Ltd. See here.  


Entrance to the Locke King Vaults (above and below)

The Locke King Vaults are on the edge of the old Brooklands motor racing circuit. It was originally an extensive air raid shelter, which has now been converted to fine wine storage.  



Inside the vaults: side tunnels run off this corridor

An old air raid notice

James Temple: i/c wine storage at the vaults 

Statement by Herron Fisher, administrators:

'ADMINISTRATORS OF VINANCE PLC FIND A BUYER
Christopher Herron and Nicola Jayne Fisher, insolvency practitioners and administrators of Vinance Plc , have reached agreement with Albany Vintners Ltd/Arc Reserves Ltd (Arc) an experienced fine wine specialist, to take over the management of Vinance client accounts.

Nicky Fisher of Herron Fisher said, “We have made this arrangement in order to make life easier for the clients going forward, but of course it is subject to each individual client’s consent.”

All investors have been sent a letter from Arc Reserves with further information.

Arc Reserves said in its letter to creditors that it has reached agreement to take over the management of client accounts.  Going forward Herron Fisher, the administrators, are still working to confirm allocated wines and once this is completed they will liaise with Arc Reserves and investors to facilitate the transfer of cases subject to clients’ consent.

Albany Vintners Ltd is a wholesale fine wine company specialising in buying from Bordeaux and selling direct to private collectors and merchants in the UK, Europe and Asia. It has a dedicated logistics arm, Arc Reserves Limited, to provide a specialist storage and portfolio management solution for private clients.

Herron Fisher, led by Chris Herron and Nicky Fisher, is an expert corporate recovery and insolvency firm. For more information visit: www.herronfisher.co.uk   or e-mail vinance@herronfisher.co.uk. To contact Arc Reserves, email: enquiries@arcreserves.com or visit: www.arcreserves.com'  



Thursday, 29 November 2012

#WIA: some initial thoughts on launch of the Wine Investment Association


The Wine Investment Association

The four founder members: L-R; Adrian Lenagan (Provenance Fine Wines Ltd),
David Jackson (Albany Portfolio Management Ltd), Hugo Rose MW (Culver Street Ltd), Peter Shakeshaft (Vin-X Ltd)


I have posted my initial reaction to the launch of the WIA on Jim's Loire here.


'The Wine Investment Association is a welcome development, especially if the current proposals are, as we were told, a start and not the finished article. The chief proposal seeks to ensure that investors receive their wine and have good, solid title to it but very unfortunately the WIA fails to ban its members from cold calling. 

If the WIA is to succeed it has to offer credible and robust protection to investors and enjoy broad support amongst the fine wine sector.'  

Tuesday, 27 November 2012

Worldwide Wealth Collections


Fine investigation by the Mirror into the cold calling practices of Worldwide Wealth Collections includes recorded phone conversation from one of the company's closers. See here. From the tone of the conversation I fancy the company might well be better called – Worldwide Wallet Thinning Operations Ltd.  


Thursday, 22 November 2012

Vinance plc: some information from the administrators


Here are answers to some initial questions I put to Herron Fisher, the administrators:

a) What has caused Vinance plc to go into administration?
It appears that part of the cause for going into administration was poor management of the business, however as the situation has just been handed over to Herron Fisher the full details of the issue have yet to be firmly established.
 b) Are some of the wines outstanding Bordeaux en primeur orders. If so from what vintages and how much money is involved? Are Vinance plc up to date on payment for these en primeur wines?
The exact details on the wine stock or the details of all investments, en primeur or otherwise, is just being established. However the majority of creditors are  wine investors rather than suppliers.

c) When do you expect to have a first estimate of what the total deficiency is? 
6 weeks

NOTES:
• Vinance Plc had a turnover of approximately GBP £1million. This is commissions, not the amount of wine sold on behalf of third parties.
• The court order to put the business into administration was sought by the directors
• Vinance plc has four directors; (3 are based in the UK and one is overseas) and six shareholders.
• It has approximately 1,000 UK creditors; the vast majority of these being wine investors (rather than suppliers)
• The value of wine assets has not yet been fully determined but it is estimated at a few million pounds
• Vinance plc has 10 employees


•••

23.11.12 
From comments received by investdrinks there would appear to be some clients who bought wine from Vinance plc some years ago who have yet to be allocated their wine. Hopefully they will find that their wines have been allocated to them. If not then it may be that Vinance plc/Morgan Aston Ford took money from clients for wine that they failed to supply.

There are also some clients who asked Vinance plc to sell their wines and either it took a long time or no sale was negociated. A practical example of one of the disadvantages of paying an upfront commission with no commission when you come to sell. The wine merchant has no incentive to sell your wine.  

29.11.2012
I understand that the administrators have found a buyer for Vinance plc and are writing to all Vinance customers to inform them and give details of the purchaser. The name of the company willing to buy Vinance plc will be released tomorrow. I trust that this company is reputable and is acting in the interests of the investors and is not a white-knight operation that has unfortunately happened in the past.     

Tuesday, 20 November 2012

Vinance plc in administration



Vinance PLC, which started life as Morgan Aston Ford, was put into administration on Friday 16th November. It is not known what the deficiency is at the moment. Insolvency practioners, Herron Fisher, have been appointed as administrators

Those investors who have their wine is their own private accounts should not be affected. However, those who are waiting to have their wine allocated, purchased or are awaiting en primeur wines will not be so lucky. They will be unsecured creditors.  

In echoes of Bordeaux UK's collapse last year Herron Fisher note that: 'Unfortunately the company records are not perfect and it will take some time for us to establish the exact position.'  

Morgan Aston Ford was set up on 7th January 2002 and was dissolved on 15th June 2010. Vinance plc was founded on 11th August 2008 and took over from Morgan Aston Ford.  
  
Press release here:
'Herron Fisher, insolvency practitioners, have been appointed administrators of Vinance Plc a well-known wine portfolio manager / broker.

Based in Greenwich, London, Vinance Plc manages more than GBP £50 million worth of fine wine assets for thousands of investor clients in nine countries.

Herron Fisher have now taken over the day-to-day control and management of the company, which was put into administration in the High Court on Friday 16 November 2012.

Herron Fisher will aim to rescue the company as a going concern, or failing that achieve a better result for the company’s creditors as a whole than would be likely if the company was simply wound up (liquidated).

Nicky Fisher of Herron Fisher said, “We will perform our functions in the interest of the company’s creditors as a whole.  We understand that many clients will be unaffected as all of their wine has been allocated to them and is either held in bonded warehouses or they already have control of it themselves. There will unfortunately be some investors who have not been allocated all of their wines and there are no wines awaiting allocation, nor are we able to buy any more wine.  Unfortunately the company records are not perfect and it will take some time for us to establish the exact position.

“In the meantime, we will endeavour to find a buyer for the business.”

The administrators are hopeful that creditors will ultimately be repaid approximately 50% of their debt; however, this will take some time.

Herron Fisher, led by Chris Herron and Nicky Fisher, is an expert corporate recovery and insolvency firm. Between them they have managed the insolvencies of Meccano Toys Ltd and one of the largest illegal banks ever wound up by the Bank of England, as well as online gift retailers The Gift Registry Ltd and Wedding List Direct Ltd.

For more information visit: www.herronfisher.co.uk or e-mail
vinance@herronfisher.co.uk'

Friday, 26 October 2012

Warning: don't swop your Lafite for carbon credits!

There is a new scam around: wine investors being told that the bottom has fallen out of the fine wine market, so it makes sense for you to sell you Lafite, Latour etc. for Carbon Credits. 

Actually it does not make any sense as your Lafite is always likely to be more valuable long-term, even if its value has fallen over the last 18 months or so, than a carbon credit that may well not be worth the paper it is printed on.  

I expect to be able to post more details soon.   

Friday, 12 October 2012

Nouveau World Wines and Finbow Fine Wines: trial date


The trial of the defendants in the Nouveau World Wine and Finbow Fine Wine case has been set to start on 7th May 2013. The trial is expected to last 8-10 weeks. The defendants have pleaded not guilty to all counts. 


Nobles Crus Wine Fund: are the Burgundy valuations realistic?

In the cellars of Patriarche (Beaune)

Yesterday I posted on Jim's Loire an extended and updated version of the news report, which was published on decanter.com on Monday 8th October. It includes more details on some of the Burgundies that form part of the fund. Although I have only looked at a small sample of the Burgundies in the fund, it does suggest that the questions raised on the valuation of this fund extend beyond Bordeaux. 

The controversy over the valuation of the Nobles Crus wine fund certainly points to  the need for an agreed way of valuing wine funds so that investors can judge and compare their respective performances using a valuation that is both robust and independent. 

Link to post on Jim's Loire  

Thursday, 4 October 2012

Grand Thornton fraud recovery section: change of contact details

Contact details@Grant Thornton fraud recovery service have changed:

You should now contact David Martin on 020 7865-2878
E-mail: david.p.martin@uk.gt.com  


Message from James Kehoe:   
I have been receiving regular calls regarding wine fraud however I will be participating in new projects going forward. In future Hannah Davie will be managing these cases along with David Martin. 
 

Friday, 21 September 2012

The Wine Investment Association: important to get it right


Gates@Château Latour
There have been several recent reports in the press about an autumn launch of the Wine Investment Association.

Leading companies in the wine investment industry are looking to set up a regulatory body to combat an influx of bogus sellers and prevent company collapses.
In the past two years, 50 wine investment companies have collapsed, potentially costing investors thousands, while the market has been beset with firms looking to capitalise on buyers' ignorance by selling wine at inflated prices.
Peter Shakeshaft, the founder of Vin-X is behind the new body and says he and other major players are looking for all firms to comply with a new code of practice that should be in place by the autumn.’
Independent, 8 July 2012

Vin-X along with a number of committed companies are moving forward rapidly to forming a self-regulatory body and look forward to publishing its charter in the Autumn…
We want an industry that is transparent, safe and open to everyone, not just High Net Worth individuals, the investor's risk should be limited to the individual wine and the market performance and not to the integrity and professionalism of the agent they deal with.’
Peter Shakeshaft: Huffington Post, 5 September 2012

Shakeshaft said his firm had joined forces with five others to create the Wine Investment Association, a regulatory body with the aim of safeguarding private investors. It is due to launch in the autumn.’
Harpers, 7 September 12

Four UK wine investment companies – Albany Portfolio Management, Vin-X, Provenance Wines and Culver Street – are set to launch the UmmK’s first ever Wine Investment Association. According to Albany’s David Jackson. ‘The WIA will have a number of aims, most importantly to protect investors from bogus sellers and company collapses.’’
Decanter, October 2012

Handled properly this new initiative could be an important step in reducing the current pandemic of dubious wine investment companies as well as the outright bogus ones. The initiative is not as far advanced as these reports might indicate. The proposals for this putative body are now with lawyers and, as yet, there is no signed agreement between the four companies. It looks like an ‘autumn launch’ may be a fairly elastic timescale. 

Although moves towards regulation are welcome I think there are a number of conditions that have to be fulfilled if it is going to gain the confidence of the fine wine trade and, most importantly, that of investors. If WIA is to be a success it will need widespread support. These conditions should include:

a. The association should be fully independent of the companies concerned
b.  The criteria for membership should be rigorous.
c. Suitability for membership should be independently verified including membership for the founding companies.
d. If the WIA is to attract other members from the fine wine sector the proposals will need to go out for consultation once they have been framed and before the organisation is launched.
e.  Once the proposals have been framed and before it is launched, the WIA should go out for consultation to ensure feedback from the fine wine trade and to attract additional members.
f.  The aim has to be transparency. This should apply not only to the process of buying but to the companies involved, their directors and those responsible for giving investment advice.

The WIA urgently needs an agreed message and a single spokesperson responsible for putting over that message. Unless this done soon, there is a real danger that the credibility of the initiative will be seriously compromised even before the association's proposals have been agreed.

To date those setting up the WIA have not been circumspect in the choice of people speaking on its behalf. Any spokesperson for the WIA must expect rigorous media scrutiny - both from the wine press and the wider media. The past histories of David Jackson (a director of Albany Portfolio Management Ltd) and Peter Shakeshaft (the director of Vin-X Ltd) and are likely to undermine confidence the WIA initiative for the following reasons:

David Jackson
Jackson was the general manager of Goldman Williams Ltd (a wine investment company closed in the public interest January 2002). He was then a founder and director of Bordelais & Dutch (another wine investment company closed in the public interest in January 2003). In 2005 he was working for Stephen Cleeve's European Land Sales Partnership - a land banking scam. In addition to extensive land banking Cleeve has been involved in multiple other investment scams - barrels of whisky, Champagne for the millennium, and pipes of ruby Port. Cleeve served an eight-year term as a banned director. Jackson says he didn't know Cleeve but minimal due diligence would have plenty of information on Cleeve's 'colourful' career.

Jackson assures me that he has changed. Certainly I have not received any complaints about Albany Portfolio Management Ltd. It was, however, disappointing to discover that Jackson had photos of his time with Goldman Williams on his Facebook (removed only last week). This may suggest that he is still not fully aware of the offense caused by the images of the Goldman telesales staff out on the town celebrating fuelled by commissions gained by duping investors.

Peter Shakeshaft
Shakeshaft was CEO of Wills & Co Financial Group plc, the unregulated holding company for Wills & Co Stockbrokers Ltd. Wills & Co Ltd was described by Tony Hetherington in The Mail on Sunday (6.11.2011) thus: ‘Wills & Co were as dodgy as they come.’   

In October 2007 the company was fined £49,000 by the FSA for the misselling of high-risk securities to private clients and required to rectify these failings. Following an inspection by the FSA in May 2008 the authority concluded that Wills & Co had not taken adequate and appropriate steps to address the failings. The company was referred to the Enforcement Division of the FSA and in December 2009 its license to advise clients on securities was withdrawn because of evidence of continued misselling. Wills & Co was then wound down and finally wound up in the High Court in July 2011.

Although Shakeshaft was not a director of Wills & Co Ltd during the time of the misselling identified by the FSA he was CEO of the holding company and had a responsibility to ensure that the required remedial action was put in place and that the misselling ceased even if financial rules prevented him from knowing all the details.

Shakeshaft, who a director of Wills & Co from August 2010 to May 2011 explains:
-->
‘I became a director only after the trading had ceased and it was in administration.  I did that because firstly I wanted to ensure all the clients had what they were entitled to. (I again confirm that every share cert and every penny was accounted for) but also it was important to me to demonstrate to the outside world that even though this catastrophic event had occurred I was prepared to take responsibility and conduct an orderly wind down of the business.’
Darren Lansdown, a director of both Wills & Co Stockbrokers Ltd and Wills & Co Stockbrokers Ltd, was censured by the FSA in February 2010: (www.fsa.gov.uk/pubs/final/d_lansdown.pdf). Although not a director of Vin-X Ltd, he is described as an associate director of the company.  


**

The Wine & Spirit Trade Association (WSTA) guidance for wine investors has been criticised for lacking teeth. This is to misunderstand its purpose. The WSTA is not regulatory body and its wine investment site is designed solely to give advice and warn investors against shady practice.

Sunday, 16 September 2012

Vintage Wine Investors offer '50% profit on 2010 Lafite' – but who are they?

Château Lafite

Vintage Wine Investors are generously offering to make investors a 50% profit in just three months on a purchase of a case of six bottles of 2010 Lafite. Buy a case now for £3000 and Vintage Wine Investors will give you 'a legally binding Wine Sale and Buy Back agreement that confirms that £4500 will be transferred to your account on 21st December 2012 for each case of 6 bottles that you purchase'. A maximium of 10 cases per client.

In response to the reasonable question 'How can we make such an offer' Vintage Wine Investors claim that 'This is from a very large buy from a liquidation sale. We are putting in half the money ourselves and allowing new clients to test the market and see the short term returns that are currently available.'



Sounds too good to be true? Before reaching for your cheque book consider the following:

a) The 2010 Lafite has yet to be bottled and shipped.
b) The lowest price for a case of six bottles of Lafite 2010 as shown on wine-searcher is £4150 from En Primeur Ltd. En Primeur Ltd were offering this for £4400 on 15th June 2012. This would suggest that the market is less buoyant than Vintage Wine Investors believe. 
c) There is no indication on their website of the provenance of this company – no names of directors etc.. The company appears not to be a registered UK company – no records at Companies House. 
d) Their address at 17 Ensign House, Admirals Way Canary Wharf London E14 9XQ appears to be a virtual office run by Flexy Office (UK) Ltd. Vintage Wine Investors could actually be based anywhere – Bromley or the Costa del Sol, for instance. 
e) They also give 111 Buckingham Palace Road, London SW1W 0SR – another serviced office – as a further address. 

f) If Vintage Wine Investors 'legally binding Wine Sale and Buy Back agreement' proves to be worthless, it will be very difficult to trace VWI. 

g) Their website is registered anonymously in Ontario, Canada.
       


I'll definitely pass on this offer and other offers that Vintage Wine Investors have recently made. Instead I'll consider maximising my savings in flying pigs – certainly a wasting asset! 

22.9.12: I'll also pass on the similar offer made on 2010 Château Margaux – again a 50% profit between now and 23rd January.