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Friday, 1 July 2011

The Bordeaux Wine Trading Company: fraud trial 20th June 2011

St Albans: Monday 20th June 2011

Defendants: Paul Craven and Oseghale Hayble*

Fraudulent trading
Between 21st July 2006 and 19 June 2008 knowingly party to the carrying on a business of a company Bordeaux Wine Trading Company with the intent to defraud the creditors of said company. 

It is accepted that the Bordeaux Wine Trading Company Ltd bought none of the wine (all en primeur) that their clients ordered.  

Monday 20th June 2011
Three witnesses: Stephen Creaton (salesman with Bordeaux Wine Trading Company), James Seaton (salesman with Bordeaux Wine Trading Company) and Frederick Achom (owner of the Bordeaux Wine Company). 

Stephen Creaton
From April 2006 he had worked at the Bordeaux Wine Company, a wine investment company set up in 2002, where he had met Oseghale Hayble, who was his line manager. At BWC his role was to cold call from qualified leads. BWC sold First and Second Growth wines – both finished wines and en primeur. Anthony Grant was his manager with Hayble as his deputy.

After Hayble left BWC he contacted Creaton to offer him a job with the his new company – The Bordeaux Wine Trading Company (BWTC). He decided to accept as the pay was better with a more favourable commission structure and the offices in Potters Bar were closer to his home whereas BWC was based in Central London.

As at BWC the sales force at BWTC used Goldmine, a software progam to keep track of clients. The sales force used a script provided in a folder.

Hayble was again his line manager, who spent most of his time with the sales team. Creaton described Hayble as “very fair, generally a nice manager”. Paul Craven wasn’t in the office generally spending his time when he was there in the back office. “Craven was very insistent that the sales team should be on the phone – even getting a coffee was hard.”

There were two white boards in the sales room. One recorded the sales made by the staff. It was Hayble, who kept this board up to date. The other board listed the five First Growths and their prices. The list of wines never changed, although the prices did. There was no indication of the quantity of wines available and it was Craven who changed the prices. Samantha Cohen, Craven’s barrister, challenged Creaton whether he was correct to say that it was Craven who updated the prices. Although pressed on this, Creaton maintained that it was Craven who updated the prices.

In time Creaton become concerned about BWTC and whether the wines were being bought. As he came to learn more about the fine wine market an off-the-cuff remark by Craven that he was off to Bordeaux to buy wine was a catalyst for his concerns   

In time Creaton stopped selling and started to look for a new job. He was asked about the cars that Paul Craven drove and mentioned that Craven had a series of one car after another. This included a black Porsche, Golf and a motorbike – £10,000 new bike.      

James Seaton
Seaton was another salesman at the Bordeaux Wine Company Ltd where he spent about 18 months. He was trained by Hayble and met Paul Craven at BWC. His role there was to cold call potential clients and to follow up calls.

In January 2007 he was contacted by Craven, who told him that he could earn better money. He accepted and started work at BWTC’s office in Potters’ Bar in February 2007. His day-to-day contact was with Hayble.

 Initially working at BWTC went OK but as time went on it became more and more chaotic, especially once Hayble left in ‘September-October 2007. “Nothing organized.”

Seaton was asked about the two white boards. One had targets and amounts of wine that had been sold by the sales team. The other listed the prices of the wines to be sold. He didn’t know how much wine there was to sell.   

Seaton had no contract of employment with BWTC. By January 2008 the company was disorganised “It was a chaotic place to work.”

Cross examined by John Femi-Ola, Hayble’s barrister, Seaton said that Hayble drove a black Honda, while Craven was “living it large’. Seaton listed the cars that Craven drove: a Range Rover, black Porsche, sports motorbike, a BMW convertible and a Golf Sports. “But not all at the same time,” Seaton added.

Seaton explained that from time to time Paul would offer special one-off-commission deals on wines – known as spivs. These were offered “apparently at Paul’s whim.  Ose was much easier to deal with. Appeared to me that Paul was a law to himself.”

From August 2007 after Hayble had left “the business went down the drain. The admin collapsed. The secretary left and wasn’t replaced. The office was manic and chaotic. Craven was in the office less and less. Sarah, Paul’s partner, would come in from time to time.”

Seaton was asked by Femi-Ola, who he thought was responsible for buying the wine in the period from August 2007 to January 2008 after the departure of Hayble. Seaton wasn’t aware of who was responsible for buying the wine. His Honor Judge Plumstead listed for Seaton the people who had left the company and the person still at the company – Paul Craven.

Frederick Achom
Partner in the Bordeaux Wine Company

Frederick Achom is a partner in the Bordeaux Wine Company Ltd (BWC), a wine investment company established in 2002. Craven and Hayble worked for  BWC prior to setting up BWTC. Achom explained that the company offers both bottled wines and en primeur. They purchase from UK based merchants – top wine merchants – as well as from France and Switzerland and négociants in Bordeaux. He described BWC’s invoice to customer system for en primeur including an allocation confirmation certificate, showing who they had bought the wine from. In 2006 he had a 12-15 strong sales force and the company was turning over £3.5 million. The sales’ staff were paid a basic wage of £25,000 with between 2%-4% commission.

Up to 2006 it was Achom who bought wine – now it is Arlene King. 

Achom explained that their margins were “way higher when they started” and that they were “slightly over-priced”. He said that the 2005 vintage was the beginning of the boom and that certain wines were increasing in price by 30% a year. 2000 Lafite had gone from £3000 to nearly £20,000.

Hayble worked for BWC off and on for a number of years. His periods of work at BWC would be interspersed by his time modelling and acting. In all he probably worked seriously for BWC for 18 months. Achom was aware that Paul Craven had worked briefly for BWC but he had never met him.

Achom was asked by prosecutor Ann Evans whether he was aware that he was a hero to Paul Craven. “He looked up to you. Your success – your cars: Lamborghini etc.” Achom was not aware that Craven took him for a role model.

In June 2006 Hayble told Achom over lunch that he was going to Los Angeles to see if he could make a real go of his acting career. However, later Achom learnt when he started receiving phone calls from BWC clients, who had been contacted by BWTC, that Hayble had actually set a rival wine investment company with Paul Craven. “When we checked the prices BWTC were offering on wine-searcher, they were way too low,” said Achom. BWTC were selling below the market price.

Achom was asked about a phone call he made to Hayble in October 2008, after Hayble had gone on to set up International Wine Commodities Ltd,  challenging him saying “Up to your old frauds again!”     

Achom was also asked about how companies pay for the wine they order. “We pay by bank transfer or by cheque. The idea of paying for wine using bundles of cash in brown envelopes is a nonsense.” Craven would claim repeatedly when he gave evidence this week (30th June – 1st July) that it was Hayble’s responsibility to buy the wine and that he was given money in brown envelopes for this purpose.

  * Later in this week Hayble became ill and proceedings against him were halted with the jury discharged from considering his case. Craven is now the sole defendant in this trial.  A report on his time in the witness box will be added shortly.

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