Wine Traders International Ltd (an update)

investdrinks understands that the winding up petition followed an investigation by the Companies Investigation branch.  The Insolvency Service will appoint a liquidator. However, it is not known when this will be.

I understand that Wine Traders International along with the related companies – Assets Vins Rouge Ltd and Bradshaw & Karr are under police investigation. 

Several clients of Wine Traders International have contacted RSM Tenon, who acted as liquidators in a number of the cases of wine investment companies closed in the public interest – Goldman Williams and City Vintners being the most notable. RSM Tenon is in the running to be appointed as liquidator in the case. Apparently some investors have ownership certificates that include rotational numbers; others do not.

It seems quite possible that Wine Traders International only bought part of the wine that investors ordered from them.

Wine Traders International Ltd

This company was wound up in the public interest in the High Court in London on 5th May 2010. This explains why I have received messages from this firm's customers who have been unable to contact the company.

I expect to post further details on Friday.

Don't get caught by cold calls – hang up!

Advice from the Police and the Financial Services Authority

'If you receive an unsolicited phone call about an investment that seems too good to be true put the phone down on them. It is almost certainly a scam.'

Actually I would go further than that hang up on any cold calls about investments. Almost everyone who contacts me with concerns about wine investment companies has been cold called.

Four news clips from the BBC website about boiler rooms and share scams – here, here, here and here.

Seale Wines and Château Lafite 2008

I recently received the following message from KA explaining that they had been contacted by Seale Wines Ltd.     

‘Recently I was contacted out of the blue by a company called Seale Wines about investing in some Château Lafite Rothschild 2008 (en primeur) and promising me, well the world. I took all this with a pinch of salt but was already interested so I agreed to give it a go.

Before finalising any of the agreements and signing anything I undertook to do a bit more in-depth research on the wine, the company and the area of wine investment. I couldn't find a whole lot to indicate either way whether the company was good, bad or indifferent. Not a lot to that, I thought, they're a small business and it's a niche area.

Then as I started to look at the area as a whole I found your site, which I found very informative and reassuring. The company in question didn't appear in your list of known dubious operators and as a company they seemed to check out. It wasn't until I read your piece about the instant offices that I noticed one of the addresses you listed is exactly the address Seale Wines are using on some paperwork they sent to me. So, now better informed as a result of reading your site I'm certainly not going to complete the transaction and I just wanted to drop you a line to thank you for providing this information.’

Seale Wines Ltd

The company was founded on 26^th September 2006. Its registered office is Suite 165, 456-458 The Strand, London WC2R 0DZ. This is an accommodation address and Suite 165 is likely to be the number of their mailbox. The previous registered office was at 55 Station Approach, Hayes, Bromley, Kent BR2 7EB, so it may be that the company is another of a number of wine investment companies that are based around the Bromley area.  

The company may have been dormant until at least September 2007 as dormant accounts up to 30.9.2007 were filed on 23.9.2008 at Companies House. The latest accounts (total exemption small) made up to 30.9.08 were filed 

KA was offered the opportunity to buy 2008 Lafite en primeur at £5750. This is a remarkably keen price as a quick check on wine-searcher shows that the cheapest UK price shown there is £7200 from London based DAFT Investments. Slurp.co.uk have it for £7500, while Fine & Rare Wines list it for £7950 a case. The 2008 Lafite is unlikely to be shipped to the UK before the first half of 2011.

Seale Wines Ltd’s Terms & Conditions appear to contravene the Distance Selling Regulations over cancellation rights:

‘Cancellation:  You may cancel your order at any time and for any reason within seven working days of signing the Wine Reservation Form.  Your payment will be returned in full.’

The Distance Selling Regulations allow the buyer to cancel at anytime up to  seven working days from the day after the customer receives the goods not from the time of signing the form. In the case of buying wine as an investment that is already bottled this will be seven working days from day after the wine reaches the customer’s account in the bonded warehouse – either their own account or their customer reserve account. It is less clear with en primeur when the period of cancellation ends. 

My comment

I would certainly go along with KA’s decision not to go ahead with the proposed purchase from Seale Wines Ltd, especially as they would be buying en primeur. Seale Wines has no real track record. Their price for the 2008 Lafite is remarkably low and one has to wonder whether they really will be able to supply it at the price quoted.

From the downloadable brochure their understanding of the UK tax laws in respect to Capital Gains Tax and Income Tax appears to be rather sketchy.    

I have emailed Seale Wines Ltd asking for confirmation of the price of the 2008 Lafite and would also welcome any comments they have on this post.  

Response from Searle Wines Ltd: 24th May 2010:  

Dear Mr. Budd,

Thank you for your recent email. Unfortunately we are not in a position to offer any Chateau Lafite 2008 at this time.

Thank you for your enquiry


Kind regards

Purchase order from Seale Wines sent to KA last Thursday for a case of 2008 Lafite, which they were unable to supply on Monday 24th May. I have added the approved stamps to hide KA's details.

 

Fraudsters' target list revealed by regulator

The Financial Services Authority says it has found the biggest ever "suckers" list of potential targets for share fraudsters.

The regulator is writing to more than 38,000 people whose names, addresses and telephone numbers are on the list.

They are being warned that their details are still being passed around, so they could be contacted at any time.

The information is bought and sold by "boiler rooms", teams of bogus dealers who try to sell worthless shares.

These dealers are usually based in overseas offices.

Read the rest of the story by By Simon Gompertz, Reporter, Working Lunch on the BBC News wbsite site.

*

It has long been apparent that there is the names and contact details of people who have fallen for wine investment scams are passed around. It is not clear how organised this is: whether sales staff moving from one company to another and taking a contact list with them or whether there is a list for sale.

Wine – really a 'wasting asset'?

1981 Vieux Domaine de Taste, Côtes de Bourg*

An md of a  company intending to sell 2009 Bordeaux en primeur kindly sent me their prospectus today inviting comment. I picked out the following pasage:

'The tax advantage:

Wines purchased en primeur exclude import duty & VAT. Such tax-free status is maintained by storing wines in our customs-bonded regulated facilities (our partner is Vinothèque). Wine is classed as a  'wasting asset' by HM Revenue & Customs and as such any profit made on the sale of these products is generally fully exempt from Capital Gains Tax.' 

Amongst the fine wine trade there appears to be a certain amount of wishful thinking regarding Capital Gains Tax. Wine is regarded as a 'wasting asset' if it is undrinkable in less than 50 years from the time it was bought. Anyone buying First Growth 2009 Bordeaux en primeur should I would suggest expect to pay capital gains, subject to the normal thresholds, as it is surely reasonable to expect that the top 2009s will still be drinkable in 2060. Quite how 'drinkable' as definedby the tax authorities is an intriguing question. 

Whether wine is a 'wasting asset' or not depends in part on when you bought the wine. Buying top Bordeaux in its youth will mean that in good to great vintages it won't be classified as a 'wasting asset'. However, buying 1945 Mouton-Rothschild now may well mean that you have purchased a 'wasting asset' as this wine may not last another 50 years.

* Even quite modest wines from Bordeaux can last for decades. Take the 1981 Vieux Domaine de Taste, Côtes de Bourg that I opened this week. Although mearly 30 years old, not kept in ideal conditions and not from a stellar vintage this is still very drinkable with sweet evolved fruit. So if this Côtes de Bourg is still drinkable after 30 years and probably good for a few more years, although I doubt whether it will get better, a First Growth is likely to make its 50th birthday.

The official view

From:

Tax Bulletin Issue 42

 

INLAND REVENUE TAX BULLETIN
Issue 42

WINES & SPIRITS:
THE CAPITAL GAINS TAX TREATMENT

We have received a number of enquiries recently about the Capital Gains Tax treatment of bottles of wines, particularly "fine" wines, and spirits. This article sets out the position for transactions where the correct charge is to Capital Gains Tax. It is written on the premise that any transactions by private individuals involving the acquisition and disposal of such wines are not regarded as "trading" or an "adventure in the nature of trade" within the charge to Income Tax under Case I of Schedule D.

Where bottled wine is purchased, each bottle is a chattel for Capital Gains Tax purposes. As gains on the disposal of chattels which are also wasting assets are generally exempt from Capital Gains Tax, Section 45(1) Taxation of Chargeable Gains Act 1992 (TCGA), then the first question is whether bottled wine is a wasting asset or not.

For Capital Gains Tax purposes a wasting asset is one whose predictable life, from the point of view of the person acquiring it, does not exceed 50 years, Section 44(1) TCGA. Whilst this definition would clearly apply to cheap table wine which may turn to vinegar within a relatively short period, even in unopened bottles, our view is that it would certainly not apply to port and other fortified wines which are generally recognised to have a very long storage life.

Between these extremes, there are a number of fine wines which are quite drinkable after a substantial period although of course the taste alters over that time. With these the basic consideration, in our view, is whether the wine has turned to vinegar or has merely matured. Of course in practice, most wine is drunk well below the age of 50 years and in that sense it is very difficult to consider the issue in isolation. However, where the facts justify it, we would normally contend that wine is not a wasting asset if it appears to be fine wine which not unusually is kept (or some samples of which are kept) for substantial periods sometimes well in excess of 50 years.

If a particular bottle of wine is not a wasting asset, then any gain accruing on its disposal may nevertheless be exempt where the disposal proceeds for that single bottle do not exceed £6,000, Section 262(1) TCGA. Where however, a number of bottles are sold to the same person in one or more transactions, then the question might arise as to whether the bottles themselves constitute a "set". If they do, then the £6,000 limit would apply to the overall sale proceeds rather than the price fetched for any individual bottle, Section 262(4). This is a question of fact and would depend on:

(a) whether the bottles are "similar and complementary" - which would require the wine in them to have been produced from the same vineyard in the same vintage year, and

(b) whether the bottles are of greater worth when sold collectively than when sold individually.

The London Wine Shop: a good investment but for whom?

I have news of a portfolio of wines being offered by the London Wine Shop Ltd to NM. This investor is being offered five cases: 2003 Lafite (£13650), 2006 Lafite (£7150), 2004 Latour (£4400), 2002 Mouton-Rothschild (£3800) and 2005 Mouton-Rothschild (£7550). This makes a total of £36,550.

Certainly a good deal for someone but this may be The London Wine Shop rather than NM. For if NM consulted wine-searcher today it would be clear that by shopping around they could strip a cool 38.27% from The London Wine Shop's proposal.

Here is how: 2003 Lafite (£9800 – L'Assemblage), 2006 Lafite (£5950 – Richard Kihl), 2004 Latour (£3159 Fine & Rare), 2002 Mouton-Rothschild (£2525 Justerini & Brooks) and 2005 Mouton-Rothschild (£5000 Woodland Wine). This makes a total of £26,434. 

I understand that NM was cold called by The London Wine Shop Ltd. Doubtless they would have explained to NM that because their prices are so high they were proposing a very long term investment. Furthermore should he choose to shop around he could save himself £10,116. I assume that The London Wine Shop Ltd would also have explained to NM that in order for the portfolio to start making money in the real market, his wines would have to increase by 53.63% to take into account commission on the sale. I'm assuming a low commission of 10%. Then, of course, there are storage charges, although given the prices of First Growths these days they won't make a significant difference to the sums. 

The London Wine Shop Ltd 

The company was founded on 4th August 2009 and its registered office and given trading address is Berkeley Square House, Berkeley Square, London W1J 6BD. investdrinks understands that their registered office is on the second floor. This is one of the serviced offices run by Regus. Sonny Soper is the company's director. The London Wine Shop Ltd is due to file its first accounts on 4th May 2011. The company appears not to have a website.    

Conclusion

The attractions of this deal for The London Wine Shop are fairly clear. If I was NM, however, I would find the attractions considerably less compelling. If Mr Sonny Soper would like to make the case for NM paying 38% more for his portfolio if it is bought through The London Wine Shop, I will be happy to post his explanation.

'Louis Reoderer Crystal Champagne 2002 vintage' – only joshing!

This email has been passed onto me by a friend in PR. Clearly Mr Fillipe Josh has a well developed sense of humour otherwise he would have taken the trouble to spell both Roederer and Cristal correctly. He also must realise that most PR companies don't have ready stocks of Cristal 2002 however they are portrayed in TV programmes, so it is obviously a joke dressed up to look like a scam. 

'From: Fellipe Josh [mailto:fellipejosh@yahoo.co.uk]
Sent: 13 May 2010 12:47
To: ****
Subject: Louis Reoderer Crystal Champagne Order.

Hello,

We would like to place an order for the following merchandise;

24 bottles of Louis Reoderer Crystal Champagne 2002 vintage (In Gift Boxes if available) for an event On May 22.

Let us know how soon you can get them . we will get back to you with the Credit Card number as soon as we get the total cost for the cases and we will arrange for the pick up at your location as soon as payment is clear

Please quote pricing and availability.

Sincerely,
Fellipe Josh.'

Nouveau World Wines and Finbow: message from the Metropolitan Police Fraud Squad

I'm very happy to post this message received this afternoon from DC Carl Hughes of the Metropolitan Police Fraud Squad.

If you wish to fill out a witness statement about Nouveau World Wines/ Finbow Wine Ltd please do follow DC Carl Hughes' instructions and go to your local police station. Do not call the number given as it is important that the investigation is not hampered.


Dear Jim 

I am one of the investigating officers for Operation Iceman, the enquiry into Nouveau World Wines Ltd and Finbow Wines Ltd. I have been following your blog with interest and feel I need to make contact with you and also to ask whether you could publish this email for your readers to see.

It is appropriate at this time to explain why victims of this alleged fraud have not yet been contacted directly. It was decided at an early stage that this strategy would not be beneficial to the investigation due to the large numbers of investors affected by this. To be in contact, providing updates and taking statements from well over a hundred people, would mean that our resources would not be deployed to their fullest potential, i.e. seeking the evidence to prosecute those responsible. Still, having spoken to a number of people who have contacted this office, they are all following your blog and so I hope to be able to reach as many as possible through these means.

To clarify, we are investigating Nouveau World Wines Ltd and Finbow Wines Ltd at this stage. No other company is currently being investigated in relation to this matter. The investigation is focussed and certain parameters are being followed by the investigating team.

Following several complaints, the Metropolitan Police Fraud Squad executed search warrants at the business premises of the two wine companies, as well as at some residential addresses. Eight people in total were arrested and are currently on police bail whilst enquiries are made and evidence gathered. Once our investigation is complete, a decision will be taken by the Crown Prosecution Service as to whether those responsible should face charges or no further action be taken should there be insufficient evidence against that individual. If this goes to trial, it could be another year before any court case.

At this time, it has been identified that not everyone working for either of these companies were knowingly involved in this alleged fraud. In fact it may be that call staff were themselves duped into believing they were working for a legitimate company and this forms part of our investigation. Those people may now find themselves either unemployed or, having sought work elsewhere, be working for other companies. Rightly or wrongly, they may have taken their client lists with them.

Should investors, who believe they have been duped by either Nouveau or Finbow, wish to provide a statement to police, then we ask that they attend their local police station and, having explained that this is being investigated as Operation Iceman by the Metropolitan Police Fraud Squad, ask that a witness statement be taken from them (not to be confused with a crime report. A statement will require your signature confirming a declaration at the top of the page and signatures at the bottom of each page used.) Details we would like to see in the statement would include how they were approached by Nouveau/Finbow, who they spoke to and what they were told. We would also need to know how much was invested, what wine was purchased (name / vintage / quantity), on what dates and using what means (i.e. cheque / CHAPS transfer etc) money was given to Nouveau / Finbow. Was extra paid for storage of the wine? If so, where was the wine being stored? Has any contact been made with the storage facility? Has anybody received a return or their investment back? Can they provide any other relevant information? Also, we ask that copies of all documentation be provided and that the officer taking the statement obtains full contact details. Please understand that providing a statement could mean that if this case goes to trial, you may be called as a witness to give evidence.

We ask that statements and exhibits are forwarded by that police officer to either DC Andy Bailey or myself at SCD6 Fraud Squad, Rm 487 Victoria Block, New Scotland Yard, London SW1H 0BG. Should the police officer wish to speak to us, THEY can call 020 7230 2868. Again, please can I ask your readers not to telephone as if we are constantly answering calls, we will not be investigating these offences.

It is too early to say whether anyone’s investment will be recovered.

I hope this helps and I thank you for your assistance in this matter. I shall continue to monitor your blog should any other matters arise from this.

Kindest regards,

Carl Hughes

Detective Constable

Watch out for snake oil merchants offering 2009 Lafite

As I anticipated I'm getting a number of reports of people being offered cases of 2009 Lafite as well as other 2009 First Growths. The price for Lafite is up to £12,000 a case and possibly in one instance much more.

Remember that the prices of 2009 Lafite and the other First Growths have yet to be released. Nor is it is known how any cases of these wines will be available. Even long established, reputable companies expected to have difficulty in securing good allocations of these wines. Most of these companies will insist on their customers buying other lesser wines if they want to acquire Lafite or similar at opening prices. Understandably customers are not allowed to cherry pick.

Remember that it is very unlikely that companies that have been recently set up will be able to get hold of the top wines when they are first released.

If you are going to buy en primeur deal only with well established companies.    

Claremont Forbes Land & Property Ltd

I have received several messages about this recently formed company from people who have been offered land investments by their sales force.

Claremont Forbes Land & Property Ltd was founded on 29th January 2010. Its paid up share capital is £1.
(Companies House records: LATEST SOC 29/01/2010 29/01/10 STATEMENT OF CAPITAL;GBP 1)

Extracts from the company's website suggests that Claremont Forbes has done really remarkably well to become 'a leading London based company' in just over three months since being set up:

'About Claremont Forbes (www.claremontforbes.co.uk)

‘A leading London based company dedicated to offering exclusive UK land investment opportunities for private clients. ‘

‘Due to a huge wealth of knowledge and extensive contacts with land owners throughout the UK, the company is perfectly geared to exploit current market conditions and offer investors a fantastic opportunity to profit on the recovery of the recession.

By working closely with our acquaintances, Claremont Forbes strive upon ‘cherry-picking’ prime located land sites with planning permission, ensuring we deliver a product which offers tremendous high-growth potential, at the same time as safeguarding one's current exposure within this volatile market.

Here at Claremont Forbes you will find a highly experienced team, on a multitude of levels, predominantly within the UK land and property market. The key to achieving our goal is that we operate devotedly with our clients, offering our expert knowledge to cater for investments that perfectly compliment existing portfolios, at the same time as positioning ourselves to yield strong returns in a relatively low-risk environment on the recovery of the recent economic downturn.’

Investment proposal

‘As the recession had taken its toll, this was a time Claremont Forbes became very active in the market place for acquisition.’

‘The forecasted timeframes with our projects are from 18 months +. Likewise, the returns are closely examined by our analysts and vary depending on each site in question. At Claremont Forbes, we strive upon offering very realistic time frames, at the same time as potential returns are based on the success of comparable sites using recent valuations. In order for the business to continue to deliver a strong product, it is imperative we only acquire investment sites with minimised risk, with clear scope of profit potential.’

Action Fraud – now there is a national centre to report fraud

Good news: the police are now rolling out a national centre for reporting fraud. Not only will you no longer have to report a fraud to your local police who are unlikely to have the expertise or the time to deal fully with your complaint but it will also help the police to build up a national picture of the scope of particular frauds. 

It is clear from recent meetings with both the City of London Police and the Metropolitan Police that both forces are very keen to get more detailed information, so that they can get a clearer picture about the extent of fraud. Both forces are concerned about the apparent rise of wine investment fraud. 

If you live outside the UK and have a complaint about a UK company this can also be made through Action Fraud. There will be a translation service.

The site also gives advice on how to avoid being defrauded and news on the latest frauds.


If you have a genuine complaint about a wine investment company I urge you to use this new service.

**

Extracts from the new site:    

Action Fraud is the new place for you to find out about fraud.

Action Fraud is the UK’s national fraud reporting centre. If you’ve been scammed, ripped off or conned, there is something you can do about it. Speak to us.

If online shopping fraud has cost you money, call us now. If you’ve been a victim of identity theft, please get in touch. We can beat fraud if we talk.

Early recognition of fraud can be vital, so no matter whether you think you’ve been a victim of fraud or you just want to know how to protect yourself, this is the place to start.

Action Fraud is a central point of contact to call and get help if you’ve been a victim of fraud.'

Call 0300 123 2040  or you can submit a report on-line through the Action Fraud site.

Call centre opening hours: 

Monday to Friday: 8am to 8pm

Saturday: 9am to 4pm

Sunday: 10 am to 4 pm

Call 0300 123 2040

'Welcome to the Action Fraud reporting form

How your report will be used

 The Action Fraud service is a new service for UK citizens. Its aim is to make the process of reporting fraud easier. By reporting a fraud, you are giving anti-fraud agencies vital information that they need to protect you and others from fraudsters. At the same time you could also help to bring the offenders to justice.

Action Fraud refers all cases of fraud to the National Fraud Intelligence Bureau which is run by the police service. Although each report cannot be investigated individually, the information you provide will aid the police to build up a national picture of fraud. This will help make the UK a more hostile place for fraudsters to operate in and keep other potential victims safe.

In some cases the police may want to contact you for further details. It is therefore important that you keep any relevant information about the fraud.

If you would like, you can also choose to have your details provided to Victim Support, a national charity that helps those affected by crime. If you take up this option, you will then be contacted by someone from the charity and offered free and confidential emotional support and practical help.

You can receive feedback on how to protect yourself from fraud and you may also register for a regular Newsletter which will provide information on how the data collected by Action Fraud has helped in making the UK a safer place.'

See also article by Julia Harding MW on Jancis Robinson's site here.
 

2009 Bordeaux: interesting article on The Drinks Business

'Trade agrees to disagree with Parker Liv-ex's members survey on the 2009 vintage has thrown up some interesting results from the trade that, at times, run counter to Robert Parker's own review and at the very least forecast the most expensive Bordeaux ever. Liv-ex’s membership numbers over 285 of the world’s biggest buyers and sellers of fine wine. The survey is an annual event and this year’s en primeur campaign has generated more than a little interest.

Jack Hibberd, research manager at Liv-ex, told the drinks business that: “Our respondents were very enthusiastic. They gave the vintage the highest marks we’ve ever seen.”'

Read the rest here.