Tony Hetherington is the Financial Mail on Sunday’s star investigator, battling readers, revealing the truth behind closed doors and securing victories for those left out of pocket. Find out how to contact him below.
RF writes: I sent a certificate to Cauta Capital for the repayment of a £20,000 bond I bought in 2018. Interest was also owed but I have not received anything.
Tony Hetherington answers: I have bad news, and worse news I’m afraid. The bad news is that you are not alone and the lawsuits against Cauta Capital Limited are increasing.
The worst news is that, although you have not yet been informed, I can tell you that the company declared bankruptcy last Monday.
In April I warned that business had gone very badly. Supposedly, its money would be lent to other companies as project financing, but only if those companies put up their assets as collateral and only if the value of the project was much greater than the amount of Cauta’s loan.
This all seemed safe. When the bonds were offered, Cauta Capital’s accounts valued the company at £69m. Its most recent accounts for 2022 showed it owed £11m (much of it to bondholders like you), but this was not a problem as it still held assets worth more than £19m.
Complaints then arose from investors whose bonds had matured but who had not received payment. Curiously, they were told that Cauta had invested their money in emeralds that had to be cut and polished before being sold.
I asked the company’s sole director, William Abundes, an American living in Luxembourg, where he is known for his political campaigns for Donald Trump.
He said: “The shift into trading in precious stones, specifically emeralds, was a strategic decision taken in response to unexpected losses the company suffered following an investment made in a European property development.”
Abundes has not provided any details. And now his company has presented its 2023 accounts, which are almost unbelievable. They are identical, down to the last cent, to those of 2022.
Cauta Capital’s sole director, William Abundes
They do not take into account the following year’s interest owed to investors and value the company’s assets, including the emeralds, at exactly the same £19,412,876 as a year earlier.
When Abundes offered its notes for sale, it appointed accountant Graham Arnott as an independent UK-based trustee to hold legal protection over its company’s assets to protect investors.
Arnott told me: “We checked the copy-and-paste accounts and were told that the value of the gemstones would not have changed much, if at all, given that they were in the raw state and no accrued interest was accounted for.” Last Monday, Abundes placed Cauta Capital into administration under the control of Adam Price and Lane Bednash, both of insolvency law firm CMB Partners UK.
This falls short of bankruptcy, but bondholders are unlikely to get any further information until the administrators complete their enquiries and write to them, which will take around eight weeks. Adam Price told me: “Based on the information currently held by the joint administrators, the company’s only asset appears to be a stake in a Luxembourg-based investment fund.”
It is unknown whether or not this fund contains the company’s emeralds.
Meanwhile, bondholders are in the dark. A retired couple who put part of their savings into Cauta Capital told me: “We worked hard to save money during our working life and we are saddened to have lost some of that money in this way, but we are even sadder to have lost trust in the honesty and integrity of some human beings.”
In Britain, bonds are very narrowly regulated. We need investor protection rules that will elevate them above their current status, which is no better than an IOU from a friend in the pub.
Battle with Churchill over missing accident report
I contacted Churchill about his accident and three days later the insurance company sent him a written apology.
PF writes: A year ago, we were at church in West Yorkshire when a stolen car crashed into our parked car, leaving it totalled. The driver was arrested. I was delighted when our insurer Churchill promptly paid the claim, deducting our £200 excess. I was told the excess would be refunded once Churchill received a police report. But then I got an email from Churchill saying: “We are unable to request a third party registration number from the police using their online form as Merseyside Police says: ‘Sorry, we can’t find the page you are looking for.’”
Tony Hetherington answers: I am not surprised that Merseyside Police knew nothing about the accident, as it took place in West Yorkshire. It seems that Churchill confused a Wakefield postcode with a Warrington postcode and a Worcester postcode. Worse still, what followed was the shocking doubling of Churchill’s renewal premium.
During the months of contact with Churchill, you visited the police and learned that the accident report was ready. The police told you that Churchill had been informed last year that investigations were still ongoing and would need to be resubmitted soon, but the police received no further information.
I contacted Churchill and three days later the insurer sent him a written apology, blaming an external company that had been hired to liaise with the police. Churchill sent him £750 to back up his apology but still failed to obtain the accident report.
Churchill wrote: “We have received correspondence from third parties who are unable to deal. We have responded that as road traffic insurers it is their responsibility to pay the innocent party’s claim. If there is no response or they continue to refuse, we may have to litigate in the future.”
I’ve corrected the spelling, but I’m still wondering if it was mistranslated from a foreign language. Perhaps from Klingon? Unfortunately, this is an authentic letter from a major insurance company.
Finally, Churchill has the police report. His bonus has been reduced and he has been reimbursed £113 plus the excess of £200, and this year’s bonus has been frozen. Churchill attributed his year-long struggle to “unique circumstances”.
I hope the company’s treatment of your complaint is equally unique.
If you believe you have been a victim of financial crime, please write to Tony Hetherington at Financial Mail, 9 Derry Street, London W8 5HY or email tony.hetherington@mailonsunday.co.uk. Due to the high volume of enquiries, it is not possible to provide a personal reply. Please only send copies of the original documents, which unfortunately cannot be returned.
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