Culver Street (Trading) Ltd, Vinsignia Ltd and the WIA

Château Gazin, Pomerol

Below is an anonymous comment left on the post about Premier Cru and Cult Wine Ltd. I'm not posting it there because it is not relevant. Instead here is a separate post covering Culver Street (Trading), Vinsignia Ltd and the Wine Investment Association.    

'Hi Jim,

A curious thing: having checked the Wine Investment Association website it seems that Culver Street Trading are no longer a registered member but that another company of which Hugo Rose (chairman of the Wine Investment Association) has miraculously taken its place. On further investigation, it seems that Culver Street are now in liquidation

https://www.thegazette.co.uk/notice/2172343

So, the chairman's company is in liquidation and ghas been replaced by the WIA by another company he has an interest in. This raises many questions, least of which is, if Amphora Portfolio Management, who's membership has been "pending" for almost two years have not in that time had their audit and passed their initiation into the association, how on earth have this new company had the time to suddenly pass the audit? Have the WIA simply sneaked this company in through the back door? And is it a glowing recommendation of the WIA that the chairman of the association's company has gone into liquidation?'

Anon

Thanks for your comment. 

Firstly Hugo Rose MW was never a director of Culver Street (Trading) Ltd. He was a consultant to the company. His consultancy ceased in June 2014. You are correct that Culver Street (Trading) Ltd has gone into voluntary liquidation. 82-year-old Richard Wheeler is now the sole director in post. 

Vinsignia Ltd was formed on 15.12.2009 but not with that name. The company name changed to Vinsignia on 21.2.2012 and Hugo Rose MW was appointed as a director on 12.11.2012. The last accounts were filed on 31.12.2011 as a dormant company. The company's latest accounts have been overdue since 31st March 2014, although Hugo Rose says they have recently been filed.

I understand that Vinsignia Ltd and another company have taken over Culver Street (Trading) Ltd's customers and their stocks. This includes stock in the UK as well as in France. 

As far as Vinsignia Ltd and the WIA is concerned I assume a new audit has been carried out – given that Rose has been a director since November 2012 there would have been time for this to be done. 

I would agree that it does not reflect well that Vinsignia Ltd's accounts have not been filed on time and that a First Gazette was published on 1st July 2014, which was subsequently cancelled on 12th July. 

It is also curious that Amphora Portfolio Management Ltd's full WIA membership remains pending. As is the case with a number of wine retailers the WIA needs to bring its code of practice into line with the contracts legislation, which came into force across the EU on 13th June 2014.  

  

Wine Investment Association: three memberships pending

 WIA: the four founder members: L-R; Adrian Lenagan (Provenance Fine Wines Ltd - pending),

David Jackson (Albany Portfolio Management Ltd – now: Amphora Portfolio Management- pending), 

Hugo Rose MW (Culver Street Ltd), Peter Shakeshaft (Vin-X Ltd)

'Hi Jim, three of the four companies involved in the Wine Investment Association are still being listed as membership being "Pending". Meaning they haven't yet completed the audit that is required to become members. As the association went live in February, and it is now August, could the chairman of the Association, Hugo Rose, please give your readers an update? Have the audits taken place, and if not, why not? As these companies are no-doubt benefiting from their perceived membership, yet seem not to have taken - or passed - the key test for membership, this is a question I'm sure a lot of people would want answered.'

Hugo Rose MW: chairman of WIA

•••

Update: 27th August 2013 – now we are two:

Provenance Fine Wines Ltd have recently become accredited bringing full membership of the WIA to two. 

Update: 19th October 2013 – now we are three:
Culver Street Ltd have recently become accredited bringing full membership of the WIA to three. 

Update: 17th March 2015 – now we are still three
Amphora Portfolio Management became an accredited member of the WIA during 2014. However, Vin-X Ltd has become the parent company of Provenance Fine Wines Ltd as it holds 100% of the £100 share capital and Peter Shakeshaft was appointed as a director of the company on 1st June 2014. Adrian Lenagan remains a director.   
    

www.duedil.com – a useful resource eg giving insight into Bordeaux Fine Wines Ltd etc.

Compare and contrast: article in the BFW's Bordeaux Magazine (above) 

The original on Chris Kissack's winedoctor

www.duedil.com is a useful resource providing information on companies through filed documents with Companies House, which it complements.

Take, for instance, the information from duedil on Bromley based Bordeaux Fine Wines Ltd:

'Bordeaux Fine Wines Limited was incorporated on 18 Sep 2008 and is located in Kent. The company's status is '', with one director. Kenneth Gundlach is Bordeaux Fine Wines Limited's sole shareholder. They have no known group companies. Bordeaux Fine Wines Limited have total assets of £0* plus total liabilities of £2,024,913. Last year, they paid £-1,700,208 in tax and had £238,563 in cash reserves. According to their last financial report, the business made a gross profit of £7,108,125. Bordeaux Fine Wines Limited paid £5,500 in salaries and £4,255,875 in dividends last year. Their book value is £389,258, and the value of their shareholders' fund is £389,258.'

The sole director is Kenneth Gundlach, who as the sole shareholder, is presumably the grateful recipient of the £4.25 million paid in dividends. I trust that this largesse is not at the expense of Bordeaux Fine Wines Ltd' investors and that they get an equally good deal.

A recent message suggests that investors with Bordeaux Fine Wines Ltd get a rather less good deal than does Mr Gundlach:

'After some aggressive cold calling my father has invested with Bordeaux Fine Wines Ltd.' 

This client was persuaded to spend around £50,000 on wine that can now be bought for £14615 – (source wine-searcher).Helps, I think, to explain the company's gross profit of over £7 million. 

Kenneth Gundlach and Bordeaux Fine Wines Ltd has also been highlighted recently here on Mirror.co.uk.  

* The company's assets have now been amended on duedil.com to £2,414,171.  

***

Testing out duedil.com I looked at the the book value ('Also known as net asset value, book value can give a rough indication of a company's net worth' of the four founding members – Albany Portfolio Management, Culver Street Trading, Provenance Fine Wines and Vin-X  – of the WIA (Wine Investment Association) and compared this with the value of three leading fine wine companies – Farr Vintners, Bordeaux Index and Wilkinson Vintners. 

The combined value of the four WIA companies is - £1,260,222. This negative value is caused by a substantial minus value for Culver Street Trading. The other three have a combined net value of £281,363. In comparison the three leading fine wine companies have a combined value of £35,936,288.       

  

What would make a phone call about wine investment to a non-client acceptable?

Following a meeting before Easter with some members of the WIA and two members of the National Fraud Intelligence Bureau, here is in draft form (comments and suggestions are greatly welcomed) the conditions that I think would make a call to a non-client call acceptable.

A cold call is one to a stranger who does not anticipate a call and has not expressed an interest in wine investment. Such calls are not acceptable for the purposes of investment and are a high-pressure sales technique.

Calls can be made to non-clients who have expressed an interest in wine investment and who are aware that having expressed such an interest they can reasonably expect a follow up call. Increasingly this interest is likely to be expressed through a website. Companies should keep records of these leads to show that they were properly established leads and be able to produce them if challenged. If adopted by the WIA, these records should form part of the annual monitoring process.   

Obviously there have to be the necessary safeguards in place to ensure that potential client is not subject to inappropriate and high-pressure sales. At the start of the call the potential client must be given the opportunity to end the call. If calls are monitored then those called must be made aware that the calls are monitored. The threshold of high-pressure sales should be lower for the elderly and vulnerable.  

When a client places an order over the phone they must be made aware of their right to cancel as in line with the Distance Selling Regulations’ legislation.

This draft of acceptable conditions will have to take cognisance of any proposals and changes that are made by the new The Financial Conduct Authority (FCA), which has now taken over from the Financial Services Authority.  

***

Hugo Rose MW, chairman of the WIA, has called on the fine wine trade to support self-regulation and the WIA here in Harpers. A prerequisite of getting such support should be ruling out cold calls – ie those to strangers who have no reason to expect a call about wine wine investment.

Wine Investment Association: why I can no longer support this initiative

WIA – not currently fit for purpose or deserving investors' support

I was aksed today my view on the recently launched WIA and its Code of Practice.  

The WIA and its ‘Code of Practice’ purportedly aims to satisfy a public demand for 'higher professional standards in the promotion of fine wine as an investment asset class..' Unfortunately it does nothing of the kind.

I am very disappointed that the WIA  have decided to permit cold calling despite the clear view of the FSA (Financial Services Authority). Equally I'm disappointed that National Fraud Intelligence Bureau is apparently prepared to offer support to the WIA that allows cold calling for investment purposes. See news story in Harpers (8.2.2013). This is especially surprising as a search on cold calls the National Fraud Intelligence Bureau website – http://www.actionfraud.police.uk/ produces 16 entries. Here to give a flavour are the first two:

‘Cold calling and high pressure sale tactics were put into play to target and then bully people into buying into their scheme. ‘

http://www.actionfraud.police.uk/land-banking-fraudsters-jailed-dec12.

Share sale and investment fraud
Share sale, boiler room, hedge fund or bond fraud involves bogus stockbrokers, usually based overseas, cold calling people to pressure them into buying shares that promise high returns. In reality, the shares are either worthless or non-existent.

You are usually contacted out of the blue by a professional-sounding stockbroker who offers you investment opportunities that seem too good to be true. You are also promised free research reports, special discounts and ‘secret’ stock tips.

In reality, the fraudsters are cold calling as many people as possible, persuading them to invest in shares that are either non-existent, or so worthless they are impossible to sell.

http://www.actionfraud.police.uk/fraud-az-sharesale-fraud

It is interesting and very revealing to compare the FSA's definition of acceptable cold calling with that adopted by the WIA:

FSA:
'FSA: One-minute guide - Cold calling
Cold calling can expose consumers to high-pressure sales tactics which mean they can end up with an inappropriate or over-expensive product or service.
 

Our investment and mortgage financial promotion rules therefore ban cold calling (which is called unsolicited real-time promotions in our Handbook and legislation) unless certain conditions are met.

How do we define cold calling?
Cold calling is where a financial promotion is made during any dealings with a customer, which the customer did not begin.
 

However customers can be approached if they expressly request it. Failing to tick a box to say that they do not want to be contacted, or relying on standard terms that you may contact them again is not sufficient to allow you to cold call a customer.
What are the specific rules for investment business?
Investment rules allow for three scenarios where cold calls could be made:

the promotion is to an existing customer who anticipates receiving a cold call;

(The other two scenarios are not relevant here.)'

WIA definition of cold calling:
'The Association defines a cold-contact as a telephone call (or other communication) made to a private individual where there has been no previous communication with that individual, and where the individual has not provided his telephone number and/or given prior permission for the telephone call.'

Significantly different! The WIA's definition is a charter to pester people who have expressed no interest whatsoever in wine investment with the elderly and vulnerable being protected as the calls will be recorded!! 

The WIA claims in its ‘Aims of The Association’: 

‘1. To seek to safeguard the general public against fraud, malpractice and misrepresentation.5. To encourage high ethical standards of competitive practice amongst wine investment businesses.

6. To do such things as are necessary or expedient to sustain or raise the status of wine investment and the Members of the Association.’

If the WIA were serious about these three laudable aims they would have banned cold calling as they were urged to do so during their consultation period. Cold calling for investment purposes is both malpractice and is per se a high-pressure sales tactic. The companies who have signed up to the WIA have chosen to ignore the clear guidance given by the FSA for their own narrow commercial advantage. Claims of 'Higher professional standards' are pure window dressing. 

Although I have previously welcomed the initiative in principle, I will not support an association that ‘purports’ to protect the public yet allows its members to cold call. In my experience, shared by the FSA, the vast majority of investors who have been scammed or persuaded to buy unsuitable or overpriced wine investments have been lured by an initial cold call. 

Until the WIA comes into line with the FSA on cold calling I cannot support this initiative. I see no reason why the public should have any confidence in the WIA as it currently stands.

I am, however, in favour of a self-regulatory body for wine investment if it can provide confidence to the public that it is safe to invest with a member of WIA as well as providing protection for legitimate companies offering wine investment. Unfortunately the WIA is currently a wasted opportunity. 

Two articles on Cold Calling:
Jancis Robinson MW:  Cold Calling – a serious warning 

Tom Lewis: The Cambridge Wine Blogger: Cold Calling and the Data Protection Act 1998

Cult Wines Ltd rejects WIA

   

Cult Wines Ltd were invited to be one of the founder members of the WIA. In this statement the co-directors explain why for the moment they have rejected membership:

Statement provided from Tom Gearing & Philip Gearing – Co-Directors of Cult Wines Ltd:

The Wine Investment Association

Cult Wines Ltd would like to recognise the WIA and applaud the founding members for their efforts in launching the introduction of regulation into the fine wine market.

Cult Wines were initially invited to participate as founding members but felt however that there were two key areas that would need to be addressed before we could consider membership;

-          The issue of cold calling is currently approved by the WIA and whilst the members may adhere to certain guidelines we firmly believe that this practice should be not be acceptable under any circumstances.

-          We would prefer to see this type of regulation managed by a completely independent body supported by the members rather than a form of self-regulation.

••

Cult Wines Ltd are not alone in finding cold calling an unacceptable practice. The Financial Services Authority (FSA) bans cold calling to strangers for investments that come under its remit. Companies may cold call existing customers but only if they are anticipating a call. 

The Wine Investment Association cannot expect to be taken seriously until it bans cold calling to strangers and comes into line with the FSA rules and guidelines. See here.   

#WIA: some initial thoughts on launch of the Wine Investment Association

The Wine Investment Association

The four founder members: L-R; Adrian Lenagan (Provenance Fine Wines Ltd),

David Jackson (Albany Portfolio Management Ltd), Hugo Rose MW (Culver Street Ltd), Peter Shakeshaft (Vin-X Ltd)

I have posted my initial reaction to the launch of the WIA on Jim's Loire here.

'The Wine Investment Association is a welcome development, especially if the current proposals are, as we were told, a start and not the finished article. The chief proposal seeks to ensure that investors receive their wine and have good, solid title to it but very unfortunately the WIA fails to ban its members from cold calling. 

If the WIA is to succeed it has to offer credible and robust protection to investors and enjoy broad support amongst the fine wine sector.'  

The Wine Investment Association: important to get it right

Gates@Château Latour

There have been several recent reports in the press about an autumn launch of the Wine Investment Association.

‘Leading companies in the wine investment industry are looking to set up a regulatory body to combat an influx of bogus sellers and prevent company collapses.

In the past two years, 50 wine investment companies have collapsed, potentially costing investors thousands, while the market has been beset with firms looking to capitalise on buyers' ignorance by selling wine at inflated prices.

Peter Shakeshaft, the founder of Vin-X is behind the new body and says he and other major players are looking for all firms to comply with a new code of practice that should be in place by the autumn.’

Independent, 8 July 2012

‘Vin-X along with a number of committed companies are moving forward rapidly to forming a self-regulatory body and look forward to publishing its charter in the Autumn…

‘We want an industry that is transparent, safe and open to everyone, not just High Net Worth individuals, the investor's risk should be limited to the individual wine and the market performance and not to the integrity and professionalism of the agent they deal with.’

Peter Shakeshaft: Huffington Post, 5 September 2012

‘Shakeshaft said his firm had joined forces with five others to create the Wine Investment Association, a regulatory body with the aim of safeguarding private investors. It is due to launch in the autumn.’

Harpers, 7 September 12

‘Four UK wine investment companies – Albany Portfolio Management, Vin-X, Provenance Wines and Culver Street – are set to launch the UmmK’s first ever Wine Investment Association. According to Albany’s David Jackson. ‘The WIA will have a number of aims, most importantly to protect investors from bogus sellers and company collapses.’’

Decanter, October 2012

Handled properly this new initiative could be an important step in reducing the current pandemic of dubious wine investment companies as well as the outright bogus ones. The initiative is not as far advanced as these reports might indicate. The proposals for this putative body are now with lawyers and, as yet, there is no signed agreement between the four companies. It looks like an ‘autumn launch’ may be a fairly elastic timescale. 

Although moves towards regulation are welcome I think there are a number of conditions that have to be fulfilled if it is going to gain the confidence of the fine wine trade and, most importantly, that of investors. If WIA is to be a success it will need widespread support. These conditions should include:

a. The association should be fully independent of the companies concerned

b.  The criteria for membership should be rigorous.

c. Suitability for membership should be independently verified including membership for the founding companies.

d. If the WIA is to attract other members from the fine wine sector the proposals will need to go out for consultation once they have been framed and before the organisation is launched.

e.  Once the proposals have been framed and before it is launched, the WIA should go out for consultation to ensure feedback from the fine wine trade and to attract additional members.

f.  The aim has to be transparency. This should apply not only to the process of buying but to the companies involved, their directors and those responsible for giving investment advice.

The WIA urgently needs an agreed message and a single spokesperson responsible for putting over that message. Unless this done soon, there is a real danger that the credibility of the initiative will be seriously compromised even before the association's proposals have been agreed.

To date those setting up the WIA have not been circumspect in the choice of people speaking on its behalf. Any spokesperson for the WIA must expect rigorous media scrutiny - both from the wine press and the wider media. The past histories of David Jackson (a director of Albany Portfolio Management Ltd) and Peter Shakeshaft (the director of Vin-X Ltd) and are likely to undermine confidence the WIA initiative for the following reasons:

David Jackson

Jackson was the general manager of Goldman Williams Ltd (a wine investment company closed in the public interest January 2002). He was then a founder and director of Bordelais & Dutch (another wine investment company closed in the public interest in January 2003). In 2005 he was working for Stephen Cleeve's European Land Sales Partnership - a land banking scam. In addition to extensive land banking Cleeve has been involved in multiple other investment scams - barrels of whisky, Champagne for the millennium, and pipes of ruby Port. Cleeve served an eight-year term as a banned director. Jackson says he didn't know Cleeve but minimal due diligence would have plenty of information on Cleeve's 'colourful' career.

Jackson assures me that he has changed. Certainly I have not received any complaints about Albany Portfolio Management Ltd. It was, however, disappointing to discover that Jackson had photos of his time with Goldman Williams on his Facebook (removed only last week). This may suggest that he is still not fully aware of the offense caused by the images of the Goldman telesales staff out on the town celebrating fuelled by commissions gained by duping investors.

Peter Shakeshaft

Shakeshaft was CEO of Wills & Co Financial Group plc, the unregulated holding company for Wills & Co Stockbrokers Ltd. Wills & Co Ltd was described by Tony Hetherington in The Mail on Sunday (6.11.2011) thus: ‘Wills & Co were as dodgy as they come.’   

In October 2007 the company was fined £49,000 by the FSA for the misselling of high-risk securities to private clients and required to rectify these failings. Following an inspection by the FSA in May 2008 the authority concluded that Wills & Co had not taken adequate and appropriate steps to address the failings. The company was referred to the Enforcement Division of the FSA and in December 2009 its license to advise clients on securities was withdrawn because of evidence of continued misselling. Wills & Co was then wound down and finally wound up in the High Court in July 2011.

Although Shakeshaft was not a director of Wills & Co Ltd during the time of the misselling identified by the FSA he was CEO of the holding company and had a responsibility to ensure that the required remedial action was put in place and that the misselling ceased even if financial rules prevented him from knowing all the details.

Shakeshaft, who a director of Wills & Co from August 2010 to May 2011 explains:

-->

‘I became a director only after the trading had ceased and it was in administration.  I did that because firstly I wanted to ensure all the clients had what they were entitled to. (I again confirm that every share cert and every penny was accounted for) but also it was important to me to demonstrate to the outside world that even though this catastrophic event had occurred I was prepared to take responsibility and conduct an orderly wind down of the business.’

Darren Lansdown, a director of both Wills & Co Stockbrokers Ltd and Wills & Co Stockbrokers Ltd, was censured by the FSA in February 2010: (www.fsa.gov.uk/pubs/final/d_lansdown.pdf). Although not a director of Vin-X Ltd, he is described as an associate director of the company.  

**

The Wine & Spirit Trade Association (WSTA) guidance for wine investors has been criticised for lacking teeth. This is to misunderstand its purpose. The WSTA is not regulatory body and its wine investment site is designed solely to give advice and warn investors against shady practice.