APW Asset Management Ltd was wound up in the public interest in the High Court, Manchester yesterday. The company had clear links through directors with the Bordeaux Wine Company Ltd – see here. I trust that the Insolvency Service will now be looking at these links. The owner(s) of the parent company – The Big Wine Company – have yet to be identified.
Press release from Insolvency Service:
Misleading wine ‘investment’ company with ‘shadowy’ majority shareholder closed down following Insolvency Service investigation
Misleading wine ‘investment’ company with ‘shadowy’ majority shareholder closed down following Insolvency Service investigation
From: The
Insolvency Service
First published: 26 March 2015
APW Asset Management Ltd, a company which
sold Australian wines to clients for investment and capital growth purposes,
has been wound up by the High Court in Manchester on 25 March after making
baseless claims that misled investors.
An investigation by the Insolvency Service
found the company made a string of patently false claims as to the soundness
both of the potential investment returns and of how wines sales would be
handled.
In addition, the court heard that the
company operated with a lack of transparency as to ownership and control. None
of the company’s directors or personnel were able to provide information on the
whereabouts or, indeed, existence of its 95% majority shareholder; and the
control of the company does not appear to have rested with the appointed
directors.
The company’s website claimed “APW proudly
occupies the role of a ‘fiduciary’ in all its dealings, providing clients with
a rare opportunity to obtain uncompromising and genuinely independent advice,
free from conflicts of interest”. In contrast to this claimed role of fiduciary
the investigation found that:
• since 2013 the main source of income for
APW was from buying back wine from clients and reselling this wine to new
clients, a process known as repack sales. Repack sales accounted for 91.2% of
APW’s income by March 2014
• these repack sales resulted in the selling clients suffering an average loss of 44.3% on the price they had originally paid to APW for the wine
• APW then sold the same wine to new clients
at an average profit mark up of 81.3%
• the new clients were unaware that the wine
they were buying had been sold by other APW clients who had suffered sizeable
losses
• the selling clients were led to believe
that their wines were being sold by APW on the open market and not to new
clients at a considerable profit to APW
• APW exploited the selling clients further
by delaying or withholding payments due to them, including failing to remit in
excess of £50,000 to the estate of a deceased client. The selling clients were
falsely told that delayed remittances were attributable to extended settlement
terms or to sales being made overseas when, in reality, the wine had been
immediately sold to a new client who had made prompt payment to APW. The total
amount due to clients in respect of unpaid remittances is estimated to be
£600,000
• the delayed issuing of sales invoices and
remittances to the selling clients has created confusion as to which client has
legal title to the same wine by the company’s own calculation there is a
deficit of 19,482 bottles of wine that should be held at a bonded warehouse on
behalf of clients
Commenting on the case, Colin Cronin, Investigation Supervisor, said
APW used high pressure sales methods which emphasised
the growth potential of its wine. Yet the viability of APW, in the latter years
at least, depended upon its clients suffering losses on the wine they had
bought for investment purposes. The company then cynically sold this same wine
to new clients at a considerable profit for itself. This conduct is the very
opposite of the fiduciary duty the company owed to its clients.
These proceedings show that The Insolvency
Service will take robust action against companies which operate against the
public interest in this way.
I am aware that APW clients are now being
targeted by a variety of businesses who falsely claim to have buyers for the
wine, or to be able to release wine held by APW, or who are offering wine
management services for the payment of upfront fees. I would urge clients to
exercise great caution if approached by companies which purport to be able to
assist in recovering their past losses.
Similarly I would urge anyone cold-called
and pressured to invest in any kind of investment to simply end the call as
genuine investments are not likely to be sold in such a manner.
Notes to editors
APW Asset Management Ltd – company
registration number 4618582 - was incorporated on 16 December 2002 under the
name of Australian Liquid Assets Ltd. It changed its name to Australian
Portfolio Wines Ltd on 22 January 2003 and to its current name, APW Asset
Management Ltd, on 29 January 2013. The company’s registered office is at
Pacific House, 382 Kenton Road, Harrow, Middlesex HA3 8DP.
The petition to wind-up APW Asset
Management Ltd was presented under s124A of the Insolvency Act 1986 on 18 March
2015. The company was wound up on 25 March 2015 and the Official Receiver has
been appointed as liquidator.
Company Investigations, part of the Insolvency Service, uses powers under the Companies Act 1985 to conduct confidential fact-finding investigations into the activities of live limited companies in the UK on behalf of the Secretary of State for Business, Innovation & Skills (BIS). Further information about live company investigations is available.
All public enquiries concerning the affairs of the company should be made to: The Official Receiver, Public Interest Unit, 4 Abbey Orchard Street, London, SW1P 2HT. Telephone: 0207 637 1110 Email: piu.or@insolvency.gsi.gov.uk.
