Kenneth Gundlach gets 15-year directorship ban for wine investment scam
Will criminal charges follow?
'Insolvency Service press release Bordeaux Fine Wine
20 February 2015
20 February 2015
Fine wine scammer gets maximum disqualification
Kenneth Jean Pierre Gundlach, the director
of Bordeaux Fine Wines Limited, a company which sold wine to members of the
public, has been disqualified from promoting, managing or directing a limited
company until 2030 for failing to purchase at least £9.3 million of wine sold
to investors.
In the undertaking given to the Secretary
of State for Business, Innovation & Skills, Mr Gundlach accepted that he
had failed to purchase and/or allocate at least 1,750 cases of wine to satisfy
purchases made by its customers. His disqualification is for 15 years, the
maximum period available.
Investigators noted that Mr Gundlach had
received dividends from the company totalling over £10 million and found that
this was in excess of the value of the wine the company ought to have purchased
for its customers
Commenting on this case Paul Titherington,
Official Receiver in the Public Interest Unit, said:
“It was Mr Gundlach and his salesmen who
benefited from this company rather than its honest investors. He
continued to sell wine when he knew he had failed to fulfil earlier
sales. Anyone showing such blatant disregard for commercial morality
should expect to be banned from running any limited company for a lengthy
period time.”
The disqualification follows investigation
by the Public Interest Unit, a specialist team of the Insolvency Service. Mr
Gundlach used the dividends he received from the company to fund his lifestyle
which included payments for performance cars, race horses (including Bunbury
Cup winner Field of Dream), private jet hire, and designer clothing and
jewellery. Mr Gundlach continued to market and sell wine to existing
investors at a time when he knew or ought to have known that those investors
had still not been allocated the cases of wine they had previously purchased
from the Company.
Bordeaux Fine Wines Limited was wound up in
the public interest on 26th February 2014 following an earlier investigation by
the Investigations and Enforcement Services division of the Insolvency Service.
The disqualification follows investigation
by the Public Interest Unit, a specialist team of the Insolvency Service. Mr
Gundlach used the dividends he received from the company to fund his lifestyle
which included payments for performance cars, race horses (including Bunbury
Cup winner Field of Dream), private jet hire, and designer clothing and
jewellery. Mr Gundlach continued to market and sell wine to existing
investors at a time when he knew or ought to have known that those investors
had still not been allocated the cases of wine they had previously purchased
from the Company.
Bordeaux Fine Wines Limited was wound up in
the public interest on 26 February 2014 following an earlier investigation by
the Investigations and Enforcement Services division of the Insolvency Service.
Commenting on the case, Vicky Bagnall,
director of Investigations and Enforcement Services at the Insolvency Service,
said:
“These excellent results show that where the
public have been scammed we do not stop at winding the company up, we also
pursue the individual directors to ensure that if they wish to trade again,
they must do so at their own risk.”
Notes to Editors
Bordeaux Fine Wines Ltd (“BFW”) was incorporated on 18 September 2008. Its trading address was at 3rd Floor, Lansdowne Road, Croydon CR9 2ER.
Bordeaux Fine Wines Ltd (“BFW”) was incorporated on 18 September 2008. Its trading address was at 3rd Floor, Lansdowne Road, Croydon CR9 2ER.
The petition to wind up the company was
presented by the Secretary of State for Business, Innovations and Skills in the
public interest following an investigation conducted by Company Investigations
(Live), another specialist unit within the Insolvency Service. The winding up
order was made against BFW on 26 February 2014.
The liquidator has advised that he has
received claims from investors and creditors totalling £57,697,885 (including a
claim from Her Majesty’s Revenue & Customs of £15,875,210 ) which are yet
to be adjudicated.
On 30 January 2015, Kenneth Jean Pierre
Gundlach (“Mr Gundlach”) signed a disqualification undertaking for a period of
15 years which means that he cannot promote, manage, or be a director of a
limited company until 2030. The period of disqualification will commence
from 23 February 2015. The misconduct Mr Gundlach admitted to was:
Mr Gundlach caused BFW to trade in a manner which lacked commercial probity in that he caused it to fail to purchase and/or allocate sufficient cases of wine to satisfy purchases made by its customers. In particular between 3 March 2009 and the cessation of trade BFW:
Sold 3,196 cases of wine totalling at least £19,264,388 to members of the public as an investment; and
Failed to supply 1,750 cases of wine to
accounts at the bonded warehouse in the investor’s name totalling at least
£9,393,373 whilst only having 780 cases stored in its bonded warehouse which
were sold by the liquidator for £1,513,150 before costs;Mr Gundlach caused BFW to trade in a manner which lacked commercial probity in that he caused it to fail to purchase and/or allocate sufficient cases of wine to satisfy purchases made by its customers. In particular between 3 March 2009 and the cessation of trade BFW:
Sold 3,196 cases of wine totalling at least £19,264,388 to members of the public as an investment; and
In addition, Mr Gundlach:
Caused BFW to continue to market and sell wine to investors who either had no account at the LCB or when BFW had not transferred the previous purchase into the investor’s bonded warehouse account; and
Caused BFW to continue to market and sell wine to investors who either had no account at the LCB or when BFW had not transferred the previous purchase into the investor’s bonded warehouse account; and
Failed to monitor and review the position
of BFW with respect to the correct allocation of an investor’s wine to a bonded
warehouse in their name when he knew from 1 October 2010 that BFW had failed to
supply wine, and continued to do so when he admits he was fully aware from May
or June 2013.
5. The result of which is that following the making of the winding-up Order, wine held in BFW’s bonded warehouse account could not be allocated to a particular investor.
6. At a time when BFW was failing to purchase sufficient wine to satisfy investors purchases and failing to allocate wine to a particular investor’s bonded warehouse account, Mr Gundlach:
Received dividends totalling £10,680,516 as shown in accounts filed at Companies House; and
Appears to have used BFW’s account for his personal benefit
Selected transactions identified in the Company bank accounts and/or records show the following payments:
5. The result of which is that following the making of the winding-up Order, wine held in BFW’s bonded warehouse account could not be allocated to a particular investor.
6. At a time when BFW was failing to purchase sufficient wine to satisfy investors purchases and failing to allocate wine to a particular investor’s bonded warehouse account, Mr Gundlach:
Received dividends totalling £10,680,516 as shown in accounts filed at Companies House; and
Appears to have used BFW’s account for his personal benefit
Selected transactions identified in the Company bank accounts and/or records show the following payments:
·
£626,148 to bloodstock companies probably for the purchase of race horses;
·
£553,803 for the purchase and running of motor vehicles;
·
£170,000 to a well known bespoke jeweller;
·
£141,589 for private jet hire and associated costs; and
·
£38,500 for an office Christmas party.
A disqualification has the effect that without the specific permission of the court, a person with a disqualification cannot:
·
Act as a director
·
Take part, directly or indirectly, in the promotion, formation or management of
a company or limited liability partnership
·
Act as an insolvency practitioner; or
·
Be a receiver of a company’s property
In addition many other restrictions are
placed on disqualified directors by other regulations. Further information on
director disqualifications and restrictions can be found at http://www.bis.gov.uk/insolvency/Companies/insolvent-companies
All public enquiries concerning the affairs of the company should be made to: The Official Receiver, Public Interest Unit (South), The Insolvency Service, 2nd Floor, 4 Abbey Orchard Street, London SW1P 2HT. Tel: 020 7637 6228 Email: piu.or@insolvency.gsi.gov.uk
All public enquiries concerning the affairs of the company should be made to: The Official Receiver, Public Interest Unit (South), The Insolvency Service, 2nd Floor, 4 Abbey Orchard Street, London SW1P 2HT. Tel: 020 7637 6228 Email: piu.or@insolvency.gsi.gov.uk
David Ingram of Grant Thornton UK LLP was appointed as liquidator of the BFW on 14 March 2014 following a meeting of creditors. As part of Mr Ingram's duties as the liquidator, he is to realise assets for the benefit of the liquidation estate and will investigate the affairs of Bordeaux Fine Wines Limited and the conduct of Mr Gundlach in so far as it assists him in identifying and recovering assets. To date, Mr Ingram has realised the total sum of £1,423,132 for the liquidation estate and his investigations are ongoing. Investors and creditors who have not submitted a claim in the proceedings should contact the liquidator’s office: matthew.d.vines@uk.gt.com
