Business
1 Stop directors made millions
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
Government backs high street with crackdown on cheap imports
MINISTERS have announced plans to speed up reforms aimed at helping high street businesses compete with online retailers and overseas sellers.
The Treasury said changes to low-value imports will now be brought forward by six months, with customs duty relief on goods worth £135 or less set to be scrapped from October 2028.
The move is designed to stop online retailers gaining an unfair advantage over shops, pubs, restaurants, hotels and other high street businesses.
At present, many cheaper imported goods can enter the UK without customs duty, a system which ministers say has left traditional retailers at a disadvantage.
The Government is also reviewing how VAT is collected from businesses trading through online marketplaces, amid concerns that some sellers are failing to pay the tax they owe.
The Treasury said revenue raised from tougher VAT enforcement would be used to help improve the business rates system for high street firms.
Dan Tomlinson, Exchequer Secretary to the Treasury, said: “This action tackles the unfair competition and dodgy businesses that are doing real damage to our high streets.
“And by making sure that tax is paid when it’s owed, we can raise revenue to put back into improvements to the business rates system for pubs, restaurants, hotels and other high street businesses.”
The package also includes a consultation on VAT reform for land used in new social housing developments.
Ministers say the change could help speed up the delivery of affordable homes by making the tax system better reflect how social housing schemes are developed.
The Treasury said the measures form part of wider plans to make the UK tax and customs system simpler, fairer and more focused on economic growth.
Business
Amended slurry lagoon plans approved after being moved due to mine workings
AMENDED plans for a rural mid Pembrokeshire slurry lagoon have been given the go-ahead after an initial scheme was altered due to the presence of mine workings.
In an application to Pembrokeshire Coast National Park, Owen Thomas, through agent Preseli Planning Ltd, sought permission for the excavation of an earth bank nutrient ‘slurry lagoon’ store of 60 by 48 metres near to New House Farm, some one kilometre from the village of Cresselly.
A supporting statement said: “The dairy farming operation at New House Farm covers approximately 290 hectares of mixed tenure land with the herd comprising of 250 milking cows, which have a yield of between 6-9 thousand litres per cow and associated youngstock.”
It added: “The current slurry storage arrangements at New House are insufficient based on the livestock numbers to accommodate a five-month slurry storage capacity. The purpose of the proposal is to increase the slurry and dirty water storage capacity for the farming enterprise to be compliant with the control of Agricultural Pollution (Wales) Regulations 2021 (CoAPR) requirements.
“It is not the applicant’s intention to increase stock levels at the holding. The existing slurry store on the farmstead following the deduction of rainfall and freeboard has a capacity of 1,178 cubic metres.”
It said the required capacity would be 5,481 cubic metres over a five-month period, leading to a current shortfall of 4,303 cubic metres, which the proposal would address.
It added: “A further environmental benefit bought by the development is the nutrient store would allow the spreading of nutrients during suitable weather conditions, rather than needing to be disposed of in unfavourable weather conditions.”
Local community council Jeffreyston raised no objections but noted concerns about its size, although recognising the development is required to meet legislation, requesting all appropriate mitigation measures would be explored and implemented.
The Coal Authority objected to the original proposed location, owing to the presence of a recorded mine shaft and associated zone of influence, leading to an amended scheme moving the store some 150 metres.
An officer report recommending approval for the amended scheme said: “The principle of the development is considered acceptable, given its direct functional relationship with the agricultural enterprise and the demonstrated operational need for additional storage capacity.
“The proposal would remain closely associated with the existing farm holding and would not result in the introduction of an unrelated use within the countryside.”
It added: “The proposal would improve slurry management arrangements at the holding and assist in reducing the risk of pollution incidents associated with insufficient storage capacity.”
The application was conditionally approved.
Business
Activate West Wales expands its team with appointment of Business Manager
ACTIVATE WEST WALES, which drives sports and wellbeing collaboration across Carmarthenshire, Pembrokeshire, Swansea and Neath Port Talbot, has appointed Marie Sture as its new Business Manager.
Marie brings more than 10 years’ experience across the Pembrokeshire countryside, conservation, and visitor experience sectors, having worked with organisations including the National Trust, Pembrokeshire County Council and Pembrokeshire Coast National Park Authority.
Her work background spans operational support, compliance, health and safety, finance and stakeholder engagement, alongside experience contributing to senior leadership and regional working groups.
Marie joins the Activate West Wales team, which is working closely with local authorities, health boards and wider sector partners to encourage cross-sector cooperation, to increase engagement in sport, physical activity and active recreation so that it can become part of normal everyday life for everyone nearly four months since it released its State of the Region report, which gave an insight into the sports participation in the region.
Marie, a native of Pembroke Dock, will play a key role in advancing Activate West Wales’ ambition to create healthier, happier communities across the region, regardless of age, background or ability.
On her appointment Marie said “I’m delighted to begin working with a team that is so committed to making a positive difference to people’s lives. Throughout my career across the conservation and visitor experience sectors, I’ve developed a strong passion for creating opportunities that support people’s wellbeing. I’m really looking forward to bringing that experience into this role and working with partners to help build healthier, more active communities across West Wales.”
Marie adds: “Spending time away from screens and being active can be incredibly rewarding. I love getting out with my children and supporting them to take part in sport, it’s been amazing to see how it’s boosted their confidence and helped develop their social skills. Even simple activities like this can bring a real sense of happiness and are so important for overall wellbeing.”
Jamie Rewbridge, CEO of Activate West Wales, said on Marie’s appointment: “We’re delighted to welcome Marie to Activate West Wales. She brings a wealth of experience working with local communities and partners, and we’re confident she will make a significant contribution to our efforts of making physical activity part of everyday life, for everyone across West Wales. Her appointment strengthens our ability to support healthier, happier communities across the region.”
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Gareth Evans
April 25, 2014 at 6:07 pm
Disgraceful, both should hang your heads in shame and leave Pembrokeshire for good.
malclom cummings
April 26, 2014 at 10:07 am
Crooks the pair of them. Shamefull what they have done .Makes you think have they been at it elsewhere in their work as IFAS.
ronnie briggs
May 27, 2014 at 7:28 pm
if they had a brain between them may be they would have known they could not get away with what they were up too. door to door salesmen or tesco shelf stacker who would trust someone like that again hopefully they will look into there all so called business dealings
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