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1 Stop directors made millions

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1stopTHE 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.”

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One in five now accessing Ogi’s Wales-based full fibre network

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Welsh full fibre telco – Ogi – has reached two thirds of its planned first phase rollout with one in every five premises now signed up to one of its home or business services. 

Kick starting its ambitious FTTP [Fibre to the Premises] rollout in 2021, Ogi propelled onto the UK telcomms scene with a £200million plan to bring full fibre to south Wales much sooner than planned by the incumbent operators.

The business shifted its approach at the beginning of 2024 to focus on customer take-up – attracting thousands to the full fibre switch thanks to a new competitive pricing and shorter-term contracts strategy.

Gaining first mover advantage in places like Pembrokeshire and the post-industrial towns and villages of the south Wales valleys, the fresh approach has served the provider well, with a sector-leading high customer satisfaction score to match. This comes following a targeted period of investment in back office operations and customer service, with new 7-day opening hours and refreshed online resources among the changes introduced earlier this year. 

Amid rising competition from the UK’s largest telcos, increasing build costs and other market pressures, the Gigabit-capable provider continues to see customer adoption increase, with one in five joining the network in 2023, with places like Pembrokeshire seeing double that rate of growth.

Chief Executive Officer, Ben Allwright, said: “With one in five of the premises we can serve already signed up to Ogi, it’s clear to see we’re investing in the right places. Passing the 100,000 premises milestone – two thirds of our initial plan, completed – and seeing the massive benefits from this technology as adoption increases is encouraging. 

“Putting our ISP operations first since the start of the year, and harnessing the build machine as a tool for growth has allowed us to take a breath, and make sure we’re doing the right things for our customers and long-term sustainability. While we might not be as visible installing new network as we had been – we’ve been busy in the background, supporting our existing customer base and welcoming thousands more every month. 

“We’re building something really exciting here at Ogi; and the people of Wales are invested in our journey to create a real challenger brand – one that Wales can be proud of, and others are already envious of.”

The network is currently being rolled out in around 60 towns and villages across south Wales, with thousands of customers joining the full fibre ISP every month. The Wales-based telco offers broadband and phone services for home and a suite of IT, connectivity and security options for business, with a new wholesale opportunity recently added to the portfolio for high capacity users.

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Carmarthenshire cheese factory owner speaks out in bad odour row

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THE DIRECTOR of a mozzarella factory which supports 140 dairy farmers has insisted he wants to be a good neighbour following complaints from a small number of people about noise and odour.

Steve Welch, of Dairy Partners Ltd, said acoustic barriers were installed in February to dampen the noise of liquid natural gas (LNG) deliveries at the site in Aberarad, near Newcastle Emlyn, Carmarthenshire. He said the company employed 75 people and served a growing market. “We’re expanding – that’s an indicator of our success,” he said.

Environment regulator Natural Resources Wales (NRW) had visited three months earlier, in December 2023, and found that the noise of pressurised LNG deliveries did not comply with Dairy Partners’ site permit. The NRW officer’s report said there was “an offensive and continual tonal noise originating from the direction of LNG tanker and LNG tank”, but no odour problem was detected.

NRW issued what’s known as a compliance assessment report in February this year requiring the company to take action. The regulator said this wasn’t the same as a formal enforcement notice, and that it was continuing to monitor noise and undertaking “detailed dialogue” with Dairy Partners.

Mr Welch said the LNG supplier it had been using exited the market last autumn. This supplier, he said, had a “silent” gravity-fed tanker which took six to eight hours to complete its delivery. He said all the available alternative LNG suppliers used a pressurised delivery system which was quicker, reduced the risk of spillage and was more economically viable. The company switched to the pressurised delivery system, which led to complaints about the accompanying noise.

Mr Welch said Dairy Partners tried using different tankers and built a wooden pallet stack to try to mitigate noise before investing in the sound-dampening panels, which he said made a big difference. He added that Dairy Partners was working with NRW to modify its site permit to reflect the use of the pressurised LNG deliveries.

Site manager Daryl White said liquid natural gas powered the factory and that there was one delivery per week during daytime hours between Monday and Friday, lasting one hour.

Dairy Partners measures the decibel level of LNG deliveries and Mr Welsh said the noise rated as “moderate to soft” when heard at the nearby roadside. A resident living just across the road, Megan Ceiriog-Jones, said she had recorded a higher decibel level, and that the sound of other operations such as night-time “venting” which she had recorded on video were disruptive. “The noise videos are just a sample of noise complaints that are sent to NRW on a regular basis,” she said.

Dairy Partners said further noise-dampening measures would be added as a condition of planning approvals for wastewater and cleaning tanks which were decided by Carmarthenshire Council’s planning committee last month. A handful of objectors opposed the retrospective applications, including Ms Ceiriog-Jones and Stephen Rees, who both addressed the committee. Ms Ceiriog-Jones said the effects of “noise and sleeplessness are hard to quantify”, while Mr Rees said the reality for residents living by the cheese factory was “considerable disruption”. Ward councillor Hazel Evans addressed the committee to say that Dairy Partners was a large contributor to the local economy and that she was reassured by the many planning conditions proposed by the planning department. She said she understood that some nearby residents weren’t happy, although they didn’t wish to see the factory close.

Speaking to the Local Democracy Reporting Service, Mr Welch said the company logged all complaints, had attempted to talk to Ms Ceiriog-Jones, and wanted to have a positive relationship. He said: “We want to be good neighbours.”

Mr Welch said cheese had been made at the site since 1938, with previous owners including Canadian firms Saputo and McCain Foods, and an Egyptian family business.

Site manager Mr White said the factory was “on its knees” when Dairy Partners took over in 2013 and began investing in it and increasing production.

Every year around 200 million litres of milk arrives at the site from 140 nearby dairy farms. Nine hours after arriving the milk is turned into 2.5kg blocks of mozzarrella cheese, with the separated whey sent to another company where it is dried and sold in powdered sports nutrition products. Cream is also produced at the Aberarad site.

“Making cheese is really technical,” said Mr Welch, who is one of three Dairy Partners directors. “You’te taking milk and turning it into a stretchable cooking product which has a lot of different characteristics. You’re manipulating proteins, sugars and minerals in a reproducible product.”

Varying levels of salt can be added to the cheese blocks, which move slowly along a tray system in a brine solution before being packaged ready for onward delivery. Around a third of it ends up overseas in countries including Lebanon and China.

Mr Welch said the site produced around 22,000 tonnes of mozzarella and pizza cheese per year, and that it hoped to expand this to as much as 35,000 tonnes. He said the 75 jobs were highly skilled and that many more indirect jobs relied on the site. Mr White said haulage business Mansel Davies & Son had around 40 drivers who delivered to and collected from the Aberarad site.

Dairy Partners, which also has a base in Gloucestershire where its cheese is shredded, has an annual turnover of around £140 million. “The market is expanding – we can’t keep up,” said Mr Welch. “We’ve got to keep producing, and we are never going to be silent.”

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Business

Major project to upgrade gas pipes in St Clears completed

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THE £300,000 investment work, which started in September, was essential to keep the gas flowing safely to heat and power local homes and businesses, keeping people warm for generations to come. It involved upgrading gas pipes in the Station Road area of the town and Wales & West Utilities worked closely with Carmarthenshire County Council to plan the scheme.

Wales & West Utilities Adam Smith managed this work. He said: “We’re happy to have finished this work and want to thank everyone who lives and works in the area for bearing with us while we completed this essential work.

“While most of the gas network is underground and out of sight, it plays a central role in the daily lives of people across St. Clears. Whether it’s heating your home, making the family dinner or having a hot bath, we understand how important it is for your gas supply to be safe and reliable and there when you need it.

“This work was essential to keep the gas flowing to local homes and businesses today, and to make sure the gas network is ready to transport hydrogen and biomethane, so we can all play our part in a green future.”

Wales & West Utilities, the gas emergency and pipeline service, brings energy to 7.5m people across the south west of England and Wales. If you smell gas, or suspect the presence of carbon monoxide, call us on 0800 111 999 straight away, and our engineers will be there to help any time of day or night.

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