Tony Hetherington is Financial Mail on Sunday’s ace investigator, fighting readers corners, revealing the truth that lies behind closed doors and winning victories for those who have been left out-of-pocket. Find out how to contact him below.
R.F. writes: I forwarded a certificate to Cauta Capital for redemption of a £20,000 bond which I bought in 2018. Interest was also due, but I have received nothing.
Tony Hetherington replies: I have bad news and worse news, I’m afraid. The bad news is that you are not alone, and claims against Cauta Capital Limited are mounting.
The worse news is that although it has not yet informed you, I can tell you that the company collapsed into administration last Monday.
In April, I warned that the business had gone badly wrong. Your money was supposed to be lent out to other firms as project finance, but only if those firms pledged their assets as security, and only if the value of the project was far greater than the amount of Cauta’s loan.
All this seemed safe. When the bonds were offered, Cauta Capital’s accounts valued the company at £69 million. Its more recent 2022 accounts showed it owed £11 million – largely to bondholders like you – but this was no problem as it still owned assets worth over £19 million.
Then complaints emerged from investors whose bonds had matured, but who had not been paid. Weirdly, they were told Cauta had put their money into emeralds which had to be cut and polished before being sold.
I questioned the company’s sole director, William Abundes, an American who lives in Luxembourg where he is known for his political campaigns on behalf of Donald Trump.
He said: ‘The shift towards trading in precious stones, specifically emeralds, was a strategic decision made in response to unexpected losses the company incurred following an investment made in a European property development.’
Abundes failed to offer any details. And now his company has produced its 2023 accounts, and they border on the unbelievable. They are identical, down to the last penny, to the 2022 accounts.
Cauta Capital’s sole director William Abundes
They take no account of the further year’s interest due to investors, and they value the company’s assets – including emeralds – at exactly the same £19,412,876 as a year earlier.
When Abundes was offering his IOUs for sale, he appointed accountant Graham Arnott as a UK-based independent trustee to hold a legal charge over his company’s assets to safeguard investors.
Arnott told me: ‘We queried the “copy and paste” accounts and were told the value of the gemstones would not have changed very much, if at all, given they were in raw form, and interest accrued was not accounted for.’ Last Monday, Abundes put Cauta Capital into administration under the control of Adam Price and Lane Bednash, both of insolvency practitioners CMB Partners UK.
This stops short of bankruptcy but bondholders are unlikely to learn more until the administrators complete enquiries and write to them, which will take about eight weeks. Adam Price told me: ‘Based on the information presently available to the joint administrators, the company’s sole asset appears to be an interest in an investment fund based in Luxembourg.’
Whether or not this fund holds the company’s emeralds is unknown.
Meanwhile, bondholders are in the dark. A retired couple who put a slice of their savings into Cauta Capital told me: ‘We worked hard to put money aside during our working lives and are sad that we have lost some of it in this way but we are far more upset to have lost trust in the honesty and integrity of some human beings.’
Bonds are only lightly regulated in Britain. We need investor protection rules that will place them higher than their current status of being no better than an IOU from a mate in the pub.
Battle with Churchill over a missing accident report
I contacted Churchill about your accident and and three days later the insurer sent you a written apology
P.F. writes: A year ago, we were at church in West Yorkshire when a stolen car hit our parked car, writing it off. The driver was arrested. I was delighted when our insurer Churchill quickly met the claim, minus our excess of £200. I was told the excess would be refunded once Churchill received a police report. But then an email from Churchill said: ‘We are unable to request the third-party registration number from the police using their online form as under Merseyside Police it states, “Sorry. We can’t find the page you are looking for.”’
Tony Hetherington replies: I am not surprised that Merseyside Police knew nothing about the crash as it took place in West Yorkshire. It seems Churchill confused a Wakefield postcode with both a Warrington postcode and a Worcester postcode. Worse still, what followed was the bombshell doubling of Churchill’s renewal premium.
During months of contacts with Churchill, you visited the police and found the accident report was ready. Police told you that Churchill had been informed last year that enquiries were still being made and they should apply again soon, but police heard nothing more.
I contacted Churchill and three days later the insurer sent you a written apology, blaming an outside firm it employed to liaise with police. Churchill sent you £750 to back up its apology but still failed to get its hands on the accident report.
Next, Churchill wrote, saying: ‘We received correspondence from third party that they cannot deal. We have now responded that as RTA insurers it’s their responsibility to pay innocent party claim. If no response or if they still refuse then we might have to litigate in the future.’
I have tidied up the spelling but still wondered whether this had been badly translated from a foreign language. Klingon perhaps? Sadly, it is a genuine letter from a major insurer.
Finally, Churchill now has the police report. It has cut your premium and refunded £113 plus the £200 excess, and frozen this year’s premium. Churchill attributed your year-long struggle to ‘unique circumstances’.
I hope the company’s treatment of your claim is equally unique.
If you believe you are the victim of financial wrongdoing, write to Tony Hetherington at Financial Mail, 9 Derry Street, London W8 5HY or email tony.hetherington@mailonsunday.co.uk. Because of the high volume of enquiries, personal replies cannot be given. Please send only copies of original documents, which we regret cannot be returned.
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