Business

1 Stop directors made millions

Published

9 years ago

April 25, 2014

THE PEMBROKESHIRE HERALD can reveal that 1 Stop Financial Services directors Timothy Hughes and Andrew Rees obtained massive incomes while mis-selling pensions products to nearly 2,000 customers across the UK.

Mr Hughes’ total declared income received during the period October 2010 to November 2012 was £1,511,846, while Mr Rees benefited to the tune of £1,181,437 at the same time.

After obtaining further information from the Financial Conduct Authority (FCA), the Pembrokeshire Herald is able to expand and clarify its article concerning the activities of Haverfordwest financial advisors Tim Hughes and Andrew Rees, who formerly traded as 1 Stop Financial Services.

The Herald can reveal that, while the pair were cleared of dishonesty by the FCA, elements of the conduct that led to the pair being ordered to pay penalties to the Financial Services Compensation Scheme in the region of £500,000, are capable of being construed as sharp practice.

In particular, the FCA highlights how the pair managed to rake off referral fees for themselves from a separate and unregulated company, EGI, of which they were both directors and shareholders.

Mr Rees and Mr Hughes not only obtained commission as introducers of business but fees from their customers in the region of £3,000 a time.

This receipt of financial benefit created a conflict of interest, as 1 Stop advised customers to transfer their pensions into a SIPP in order to purchase an underlying investment when Mr Rees and Mr Hughes had also a financial interest in facilitating the sale of that investment to the customer (through EGI). However, the pair failed to disclose, manage and mitigate adequately this conflict of interest.

Even when a declaration was placed into customer documentation recording the link between 1 Stop and EGI, it failed to mention the financial interest of Mr Rees or Mr Hughes in EGI.

As a result of their actions, 1,959 of 1 Stop’s customers were at risk of having invested a total of £112,331,229, mostly from pension funds including some final salary schemes, into SIPPs which may not have been suitable for them.

The FCA also found that customers’ wishes to securely invest their pension savings in secure products were ignored and risky investments entered into instead. In the case of one customer who wished to adopt a low-risk strategy, their final salary pension fund was channeled into an unsuitable and very risky investment.

In addition, customers including a joiner, builder and a publican were all certified by Messrs Rees and Hughes as having a high level of understanding of risky “wrapper-type” investments involving complex property transactions. The FCA did not believe the records created by 1 Stop in this regard.
49% of those customers affected were encourage to invest in overseas property developments operated by Harlequin Properties. None of those customers received any advice from 1 Stop on the suitability of that overseas property investment.

The Harlequin group of companies are engaged in the development and distribution of overseas property investments and resorts.

On January 18, 2013, the FCA issued an alert to financial advisers about investments in overseas properties bought through Harlequin Property. In March, the Serious Fraud Office (SFO) announced that it, together with Essex Police, was looking into complaints in relation to the Harlequin group. Investors who have invested in specific resorts were asked to contact the SFO.

On May 3, 2013 administrators were appointed for Harlequin Properties.

1 Stop customers who invested in risky investments on the advice of Mr Rees and Mr Hughes have been placed at significant risk of potentially losing all of their money.

In light of their personal liability for the negligent and incorrect advice tendered to their customers, Mr Rees and Mr Hughes were both banned from performing any significant influence function in relation to any regulated activity, carried on by any authorised person, exempt person or exempt professional firm.

In both cases, the FCA decided to impose that penalty neither Mr Rees nor Mr Hughes were judged a fit and proper person in terms of competence and capability.

Harlequin Property are the primary agent for Harlequin Hotels and Resorts, who they say create luxury five star resorts in various locations across the Caribbean. Their mission statement is to,
‘deliver excellent long term returns on clients’ investment by selecting property developments in the most desirable locations’.

The Serious Fraud Office told The Herald that: “The SFO, together with Essex Police, continues to investigate the Harlequin group of companies. We are not able to comment on the on-going investigation nor are we able to comment on an individual’s particular investment.”

In 2013 Harlequin were caught up in a mortgage scandal that saw investors in their properties put at risk of losing around £400 million of deposits.

Investors in Harlequin’s various property ventures and hotel resorts were required to pay a deposit of 30% of their property’s price to secure their investment. Where investors needed to take out a mortgage to pay for the remaining 70% of the property purchase, Harlequin offered to provide a loan which the investors could pay back upon completion.

However, investors were then asked to find around £157,150 each to pay for the properties without the aid of Harlequin’s ‘value guaranteed mortgage’.

Gareth Fatchett, partner at Regulatory Legal speaking in New Model Advisor, said, “Only 2% or respondents could complete without a mortgage, which means 98% of people will go into breach of contract, and Harlequin is saying if they don’t complete their payment they’ll lose their deposit. Advisers should have known from the outset there was not a mortgage available. I’d go so far as to say we’ve seen no evidence of a mortgage relating to a Harlequin property. I suspect the 10% or 15% commissions may have made advisers not check. It’s a huge mis-selling [scandal]. Advisers knew the people they were taking into these contracts couldn’t afford to complete, so therefore the mortgage was by far the most vital thing.”

Business

Tuk Tuk touring business with franchise hopes gets licence plate call turned down

Published

2 days ago

March 29, 2023

Bruce Sinclair Local Democracy Reporter

A SOUTH Pembrokeshire three-wheeler ‘tuk tuk’ tour business, which has hopes of creating a country-wide franchise has had a call for discreet signage on a support vehicle turned down.

Pembrokeshire County Council’s licensing sub-committee, meeting on March 27, considered an application to amend standard terms and conditions of a private hire vehicle.

The application, by Lorraine Niederlag of Begelly-based Tuk Tuk Time, asked for standard external private hire plates to instead be displayed internally for its “usually affluent” clients.

The application for this change of plates asked: “We wish to request the removal of the large private hire licensing plates, in exchange for more discreet internal plates. The intention is to focus on tours that would compliment our tuk tuk tours.”

The applicants said the charming three-wheeler Tuk Tuks were usually kept to south Pembrokeshire tours, and were not really suitable for county-wide day trips; the support car being used for that.

“As our clients are usually affluent, it would be detrimental to arrive in a pre-booked vehicle with such a ‘taxi’ image. In view of all bookings being pre-booked, we cannot see any safety issues for clients by more discreet signage,” the application added.

At the committee meeting, TUK Tuk Time said it hoped to use the support vehicle, bearing the signage “Wales’ premier travel” for some short trips from its campsite to restaurants until the business grew.

Lorraine Niederlag told members it was hoped that Tuk Tuk Tours could eventually become a franchise, with similar three-wheeler Tuk Tuk and support car schemes running in other parts of the country.

She told members that if the small plates call was turned down the support vehicle would be sold.

Cover image: Giving a shout out to the Rainbow Delivery Squad are Lorraine Niederlag, family and staff of Tuk Tuk Time. Picture: Gareth Davies Photography

Business

MPs to examine opportunities for defence manufacturing and cyber security in Wales

Published

4 days ago

March 27, 2023

Tom Sinclair

THE WELSH AFFAIRS COMMITTEE has today launched (Mar 27) a new inquiry examining the defence industry in Wales, looking specifically at defence manufacturing and cyber security.

From Airbus to Kent Periscopes, Raytheon to Qioptiq, there are over 160 companies supporting the defence sector that are based in Wales. Wales’ defence sector is further enhanced by the Ministry of Defence’s (MOD) Defence and Electronics Components Agency (DECA), based in North Wales, which has a £0.5 billion contract with the US Department for Defense.

However, there are concerns that a decrease in investment from the MOD will erode the prominence of Wales’ defence sector. In recent years, the number of jobs and small and medium sized enterprises (SMEs) in the sector has declined and MOD spending in Wales has fallen by £300 million since 2018. The Committee is keen to examine trends in defence spending and how SMEs can benefit from available opportunities.

Over the course of the inquiry, MPs will look at how important the sector is to the Welsh economy, investigate the opportunities for growth and examine the role of the UK Government in further promoting the defence sector in Wales.

Welsh Affairs Committee Chairman, Stephen Crabb, said:

“From maintaining fighter jets to hosting one of the most advanced aircraft surveillance and intelligence systems in existence, in Wales we have a ground-breaking defence sector that is routinely punching above its weight.

“However, MOD investment in Wales has decreased, as have the numbers of jobs and SMEs in the Welsh defence sector. Over the course of our inquiry, we will be considering the future opportunities and challenges to ensure defence industries in Wales – from defence manufacturing to cyber security – thrive.

“The defence sector is a major employer and helps support local economies across our nation and it is in all our best interests to support Wales’ defence prowess.”

The Committee is inviting written submissions by Friday 5 May. These should focus on, but not be limited to:

What are the reasons underlying the trends in MoD spending in Wales since 2019?
What is the MoD’s understanding of how funding flows from prime contractors to small and medium sized defence sector businesses in Wales?
What is the relationship between Wales-based prime contractors, Welsh academic and research bodies, and the development of new defence technologies?
Can Wales play a role in enhancing the UK’s defence industrial capacity?
Do skills and knowledge exist within Wales’ workforce to support the growth of the Welsh defence sector?
How might the reorganisation of Wales’ defence estate affect employment in the defence sector in Wales?
Will the 10% social value weighting applied to MoD procurement support the Levelling Up agenda in Wales?

Business

Economy Minister congratulates Celtic Freeport consortium on winning bid

Published

4 days ago

March 27, 2023

Tom Sinclair

ECONOMY MINISTE, Vaughan Gething, was in Port Talbot today to congratulate the Celtic Freeport consortium on their successful bid to be Wales’ first freeport, which is set to deliver tens of thousands of new, high-quality jobs in south west Wales.

Last week, the Welsh and UK governments jointly announced the Celtic Freeport in Milford Haven and Port Talbot, and Anglesey Freeport on Ynys Mon, have been chosen as Wales’ first freeports.

The two freeports aim to collectively create around 20,000 jobs in the green industries of the future by 2030 and attract up to £4.9 billion in public and private investments.

The Celtic Freeport will be based around the port of Port Talbot in Neath Port Talbot, and the port of Milford Haven in Pembrokeshire.

The freeport plans focus on low carbon technologies, such as floating offshore wind (FLOW), hydrogen, carbon capture, utilisation, and storage (CCUS) and biofuels to support the accelerated reduction of carbon emissions.

The freeport aims to attract significant inward investment, including £3.5 billion in the hydrogen industry as well as the creation of 16,000 jobs, generating £900 million in Gross Value Added (GVA) by 2030, and £13 billion by 2050.

The Minister visited the port of Port Talbot earlier today, which will become one of the focal points of the new Freeport – which is expected to be operational later this year.

Speaking during a visit to Port Talbot, Economy Minister, Vaughan Gething said: “It was great to be in Port Talbot today to congratulate the Celtic Freeport team on their successful bid.

“From off-shore energy to advanced manufacturing, the Celtic Freeport will help create tens of thousands of new, high quality jobs in the green industries of the future. it will support our highly ambitious plans to reach net zero by 2050, while also supporting our young people to plan their futures here in Wales.

“All this will help us transform the economy of south west Wales, helping us create a stronger, fairer and greener future for local people and communities.”

Roger Maggs MBE, Chair of the Celtic Freeport consortium said: “Wales is on the cusp on an exciting green journey.

“The freeport decision will cause a chain reaction.

“Upgrading our major energy ports in Milford Haven and Port Talbot will enable floating offshore wind, create the cradle to nurture new green tech companies and take a step on the path to greening Wales’ steel industry.

“Now is the time for action so that Wales captures the renewable energy supply chain.”

Andrew Harston, Director, Wales and Short Sea Ports, Associated British Ports (ABP) said: “The roll-out of floating offshore wind, or FLOW, in the Celtic Sea provides a once-in-a-lifetime opportunity for Wales. Port Talbot is the ideal location for the deployment of FLOW, and ABP is ready to invest over £500m in new and upgraded infrastructure to enable this and to ensure first-mover advantage to capture this global market. The Celtic Freeport provides a huge opportunity, and not just for FLOW, but for sustainable fuels and hydrogen too.