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Wednesday, 23 July 2014

En Primeur Ltd: 6 figure estimated deficit turns into £1.7 million!

Château Latour: one of several First Growths 
missing from a client's reserve account with En Primeur Ltd 
   
Unfortunately En Primeur Ltd’s financial situation is much worse than it was initially thought. Before he had had a chance to have a close look at the books Nedim Ailyan had estimated that the deficit would be in 6 figures and probably at the low end of this range. Instead the report presented at the creditors’ meeting on 16th July 2014 at the Marriott Hotel in Bexleyheath painted a very much blacker picture.

Bankrupt En Primeur Ltd has losses of £1.7 million far higher than initially thought. The full extent of the company’s financial problems became clear once the liquidator saw the company’s books.

Nedim Ailyan of Abbott Fielding (Sidcup) was appointed liquidator at the creditors’ meeting held on 16th July 2014.

Creditors are owed over £1.8 million. Marco Correia, the company’s sole director and major shareholder, estimates En Primeur Ltd’s wine assets at £223,495. However, Edward Symmons, property and asset consultants appointed to realize their worth, value the stock at only £150,609.

Furthermore some of the company’s wine stocks are in France and will not be released until a £51,000 bill has been settled.

(Details: Stock held at London City Bond in En Primeur’s Trading Account cost £80,420. However, Edward Symmons, property and asset consultants appointed to realize their worth, value this stock at £48,500. A further 990 bottles, which were taken out of bond have a claimed retail value of approximately £45,109 – estimated are estimated by Symmons to have a value of around £11,000. Wines held in France: £97,975 but with a valuation of £57,000. The wines lying in France will only be released once outstanding monies of £51,000 have been paid. Thus the realizable net total for the company’s wine stocks appears to be £99,609.

En Primeur Ltd’s problems started in 2011 when one of its suppliers was unable to deliver the 2008 en primeurs ordered. The company was forced to find replacements at the height of the Bordeaux boom. Cases that had been sold to customers for £1600 a case now cost up to £15,000.

Losses mounted: between 30th September 2012 and 16th July 2014 En Primeur Ltd made a trading loss of £1.35 million.
  

The overall loss may continue to mount as investdrinks is aware that there are discrepancies between what customers thought should in their En Primeur Ltd reserve account at London City Bond and what is physically there now.

One customer has informed investdrinks that he now only has eight cases in his En Primeur Ltd reserve account instead of 20, which should have included some Bordeaux First Growths. At present it is not known what has happened to these wines.  Some of these missing wines had been purchased from other merchants and had been transferred from another bonded warehouse.
 

There are also some 2010 and 2011 en primeurs that have not been delivered. 

Postscript:
There is one clear lesson from this sorry tale. Store your valuable wine in your own account. Do not rely on putting it into a company's customer reserves as there is nothing to stop that company moving your wine without your knowledge. 



 

Saturday, 5 July 2014

As European Fine Wines goes into liquidation debts hit £2 million

Premises of European Fine Wines Ltd in Bromley


At the creditors' meeting on 25th June 2014 held in Bexleyheath, South London, Abbott Fielding Ltd were appointed liquidators for European Fine Wines Ltd, a wine investment company based in Bromley and founded in 2005.

Debts originally thought to be between £500,000 to £1 million have now climbed to £2 million. In their nine years of operation EFW turned over £80 million in wine.

Nedim Ailyan, the Insolvency Practitioner at Abbott Fielding Ltd, said: "We were told the debts were less than one million. However, once we were able to look at the books, we saw that the debt was actually £3 million against assets of £1 million - mainly wine.'

According to Ailyan a major factor in the company's collapse was their decision to set up an office in Hong Kong. "They sank £1 million into this gamble. Unlikely companies like Farr Vintners, who have successfully set up branches in Hong Kong, EFW did not have the specialist staff or the contacts necessary to succeed."

Abbott Fielding will be investigating how far the Hong Kong adventure was funded by investors' funds intended to buy wine.

"It is all right to gamble but not with other people's money," added Aiylan.

It is still unclear how much wine was not bought as I am getting reports from investors that some of their wines are missing. 

••

Encarta Fine Wines Ltd: also ceased trading?

 'Encarta Investment Group was founded in 2006..
down to earth, friendly and helpful fine wine investment company'  

Encarta website no longer found



Yet another 'wine investment' company may have ceased trading as the Encarta Fine Wines's website has disappeared.

Update: 7.7.2014 The Encarta website is now back up, although a phone call gets a recorded message.



SJB Trading Ltd: 'Wealth of experience?' Firm 18 months old.

'Opputunities' – so important to build brand confidence!

'Our team have a wealth of experience 
developed over many years'

I have been contacted by several people in the wine trade concerned about SJB Trading Ltd contacting their clients offering to sell their wine portfolios. 

One example: 
'Please find attached information that is being sent to wine investors.

SJB Trading have somehow managed to obtain contact details of wine investors illegally. I have received phone calls from three investors I look after in the last week alone complaining about an unsolicited approach by this company..'

Although SJB Trading Ltd claims 'a wealth of experience' the company was founded on 12th December 2012. It has one director 38-year-old Stuart John Barnes. Barnes is the sole shareholder with £1.  Barnes has been a director of three other companies, which have now all been dissolved: Stone Plant & Waste Ltd (dissolved 2011), Sjbs Trading Ltd (dissolved 2009) and Flyteam Aviation Ltd (dissolved 2011).



The SJB Trading website was registered on 25th May 2015.


SJB website registered May 25 2014


 

'SJB Trading refers to the global organisation, and may refer to one or more, of the member firms of the SB Group of companies| One Canada Square, London E14 5AB| Clive Avenue, Orford Warrington, Cheshire WA2 9NX' 

 'With a vast majority of our staff official wine experts 
(including 12 buyers and dozens of other regional specialists)'


Their website claims: 'Location: We are the leading independent fine wine investment company located in the United States. Although our services are open to foreign investors, our location within the United States allows us to meet the unique needs of American investors.' 

How many American fine wine lovers have heard of SJB Trading Ltd I wonder?

An example of an email from SJB Trading Ltd explaining their selling procees as well as their '27 years experience in the fine wine business':

From: scott.manns <scott.manns@sjbtradingwines.com>
To:
Sent: June 2014

 
Subject: Further to our conversation



Dear ,

Further to our telephone conversation, as promised please find below my contact details. I have been a Buyer for SJB Trading for nearing two years and have a passion for fine wines. 

With over 27 years experience in the fine wine business, the Directors and senior management of SJB Trading Ltd are internationally recognized experts in purchasing of En Primeur Bordeaux wines and authentication.

SJB Trading Ltd instruct independent leading Accredited Wine Appraisers from all over the world.

SJB Trading Ltd will instruct appraisal of your fine wine collection for free and arrange for purchase of your properly stored fine wine and in some cases offers exceed the appraised prices! 

Here’s what to do next:

Step 1
Reply to this email with a list of your entire wines collection, highlighting the wines you are interested in selling.  Make sure to include your entire collection as a full appraisal will give a clear indication of your current value. Please provide all necessary information including producer, varietal, special designation, vintage, bottle size and number of bottles. Don't bother putting down wines you know have no demand - White Zinfandel, everyday wines, really old Chardonnays, etc.

You may also send a fax of your wine list to +44(0)20 7060 7418. Please clearly indicate your name and contact details marked for my attention.

Honestly indicate each wine's condition. If the label or capsule is smudged or damaged, we want to know about it. Most important is the fill level.  Tell us if the fill of the wine is below the neck, and if so, how far down the 'shoulder' it is. If there is any sign of seepage around the cork, or the cork protrudes more than a millimeter from the top of the bottle, or the wine level is below the top shoulder of the bottle, cross it off your list and look for another home - we can't take it. 

Step 2:
Upon receipt of your entire wine list, you will be automatically registered with SJB Trading. You will receive an email from registered@sjbtradingwines.com containing your unique Customer ID Number. 

Step 3: 
We'll tell you what your wine is worth in today's market. Within a few days, we'll let you know the valuation compiled by the Accredited Wine Appraisers and what we believe it is worth to our international clients and distributor/wholesaler network.

Step 4: 
SJB Trading Offer. We will give you a competitive price for the fine wines contained on your list that our clients are interested in. If you are happy with the offer we proceed to pre purchase phase.

Step 5: 
Pre Purchase Phase. Your wine is underwritten and insured with independent insurance underwriters. You ship the wine to our bonded warehouse. SJB Trading will incur the transportation costs.
 
Our Client / Distributor / Wholesaler inspects the wine.  SJB Trading together with the purchaser will examine the said wines, in a secure bonded environment. If the condition or other important details are inaccurate, we will be in touch with you to reach a mutually agreeable resolution or will return the affected bottle(s). But this doesn't happen too often. Please be as honest as possible when submitting your list. If your list is not accurate or the quality of stock is poor, your wine will be returned and all costs incurred by SJB Trading must be paid with immediate effect.
 
Our Client, Distributor / Wholesaler confirms payment terms for the agreed-upon value of the wine, within about 5 business days of receipt of your wine. Usual payment completion is about 4-16 weeks after receiving the said wine (dependent on the quantity and value).

I thank you in advance for your swift response and look forward to receiving your entire wine list.

Kind Regards

Scott Manns
Buyer

One Canada Square,
London,
E14 5AB
T: +44(0)20 7060 4472 Ext: 305
F: +44(0)20 7060 7418
E: scott.manns@sjbtradingwines.com
W: www.sjbtradingwines.com





Screen shot of part of home page of 
Direct Investment Insurance
  
SJB Trading Ltd use Direct Investment Insurance to value wine portfolios. Direct Investment Insurance claims to be 'The Worlds Largest Investment Underwriters', although the website was only registered on 8th May 2014. 

Website registration: May 8 2014 

One part of the SJB website that is worth reading:

 
'information is not guartanteed to be accurate' 

'NOTE: SJB Trading does not offer financial advice nor are they regulated by the FCA. This website provides general information about SJB Trading Ltd and is not intended to offer investment  advice. Furthermore, the information on this website is not guaranteed to be accurate or current and is not sufficient to be the basis for sound investment decisions.'   

Permission to use this coat of arms?