Since our previous update, we have been reviewing the information received from the administrators. We’ve been examining if B&G Finance owes a civil liability to customers that would enable them to sue the firm in court.
We have determined that B&G Finance may have mis-sold Basset and Gold plc mini-bonds to retail customers from 1 March 2018. While this investigation may share similarities with London Capital & Finance, B&G Finance Ltd operated under a different structure. It did not issue its own bonds but arranged for customers to buy bonds issued by a different firm.
LCF issued its own bonds – which we consider is not a regulated activity – whereas B&G Finance Ltd carried out the regulated activity of arranging. Because the other requirements under our rules are also met, we may be able to protect many customers of B&G Finance Ltd.
We have now moved into the final stages of our investigation and we will start to process in phases the claims received so far. We can’t confirm when we will be looking at any one individual claim as we need to contact customers for further information.
However, as soon as our investigation is complete, we will move all submitted claims to our claims processing teams for assessment.
As outlined in previous updates, we are aware that principal firms have provided guidance to customers that were mis-sold their B&G mini-bond between 31 October 2016 – 1 March 2018.
If a customer ‘rolled over’ their investment after 1 March 2018, FSCS will consider their claim against B&G Finance Ltd. For clarity, a roll-over investment would have occurred at the end of a customer’s investment period, where the money was reinvested with Basset & Gold, through B&G Finance Ltd from 1 March 2018.
Paul Boyle, David Clements and Tony Murphy of Harrisons Business Recovery and Insolvency (London) Limited were appointed as joint administrators of Basset & Gold PLC (the Company) on 1st April 2020 (the Joint Administrators). They were also appointed as joint administrators of B&G Finance Limited (B&G Finance), a related company, on the same date.
The Company which is not regulated by the FCA, issued bonds which were sold to retail consumers. B&G Finance, which is regulated by the FCA, acted as an intermediary between the Company and investors, arranging investments in the bonds sold by the Company.
Following the appointment of the Joint Administrators there will be no further bond issuances or related investment activity. No bonds have been issued to retail investors from May 2019.
The Company’s customer service team remains available to assist existing customers with any queries.
The Joint Administrators will conduct an orderly wind down of the business and seek to recover the assets of the Company for the benefit of its creditors. The Joint Administrators will also conduct an orderly wind down of the business of B&G Finance and seek to recover the assets of that company for the benefit of its own creditors.
The Joint Administrators will also commence work to identify all creditors of the Company in accordance with their statutory duties and obligations under the Insolvency Act 1986. The same will apply in relation to B&G Finance. Those customers with complaints should approach the Company in administration in the first instance although it may subsequently be identified that the claim should rest with B&G Finance. Any such claim will therefore be treated as an unsecured creditor claim of either the Company or B&G Finance. The Financial Services Compensation Scheme (FSCS) anticipates it may start to receive claims from investors against B&G Finance and has determined that many investors have a good prospect of claiming compensation. The FSCS is operationally independent of the FCA and it is the FSCS that determines whether compensation is payable under the FCA’s compensation rules. Bondholders can find further information at https://www.fscs.org.uk/.
The Company in administration is not FCA authorised. This is because issuing bonds is not normally a regulated activity. B&G Finance remains authorised by the FCA, albeit now in administration, and remains subject to supervisory oversight and the FCA’s rules. The Joint Administrators are officers of the Court and need to comply with all insolvency law. Each is a licensed insolvency practitioner.
For all enquiries please contact email@example.com or call 0800 464 7767. Please refer to the Basset & Gold website for further updates.
Please remember, be aware to scams. Never give personal information or account details to anyone who contacts you unexpectedly. We will never ask for your bank details.
Paul Boyle, David Clements, And Tony Murphy of Harrisons Business Recovery and Insolvency (London) Limited were appointed Joint Administrators of Basset & Gold Plc and B & G Finance Limited on 1st April 2020.
We have prepared this document to help Bondholders and other creditors understand the process
FREQUENTLY ASKED QUESTIONS
about Basset & Gold Plc and B & G Finance Limited (in administration), together referred to as “B&G” or “the Companies”
Date: 1st April 2020
1 About insolvency and B&G
2 For Bondholders
3 For other creditors
4 Contact information
Where financial firms enter into administration, experience is that fraudsters may sometimes approach investors claiming to be able to recover their investment in return for an advance fee. Sometimes the fraudsters claim to be from the Companies or the Administrators. You should be wary of any unexpected call, email or other contact which asks you for money in this manner. FCA guidelines are available at:
Section 1 – INSOLVENCY and B&G
NB This Q&A document has been prepared at the time of our appointment. As events and information develops we will update it. References to ‘we’ mean to the Administrators.
When a company is experiencing financial difficulties it can be placed into administration. Administration is an insolvency process regulated by the Insolvency Act 1986. B&G have entered into administration.
Under insolvency law, the affairs, business and property of companies in administration (such as B&G) are managed by Administrators. The Administrators are independent of B&G and did not identify any conflicts of interest prior to appointment
Section 2 of this document sets out some queries which Bondholders may have.
Paul Boyle, David Clements, And Tony Murphy (“the Administrators”) all of Harrisons Business Recovery and Insolvency (London) Limited, were appointed by the Court following an application to Court by the directors of the Companies. The FCA gave prior consent to the proposed appointment of the Administrators.
Whilst coupon payments and repayments of investments have not been missed up until now, it is inevitable that this will occur some point in the future. Therefore in order to treat all bondholders equally, the administrators will not be able to arrange the repayment of any investments even if repayment is now, or will shortly be, contractually due.
The same individuals have also been appointed as Joint Administrators to Uncle Buck Finance LLP. The relationship between B&G and Uncle Buck Finance LLP is provided below. The Joint Administrators can confirm that no conflicts of interest were identified prior to appointment.
The directors of B&G filed their applications for an administration order on 1st April 2020 because they had concluded that both firms were insolvent. The main factors which contributed to the insolvencies:
- A substantial proportion of the funds raised from investors have been utilised in the funding of a High Cost Short Term Credit (“HCSTC”) business called Uncle Buck Finance LLP (“Uncle Buck”).
- Uncle Buck was recently placed into Administration.
- This in turn has placed significant doubt on the recoverability of the investments made in Uncle Buck
- B&G took independent insolvency advice after the FCA raised concerns about the viability of the B&G mini bond scheme and in light of this advice, and the entry into administration by Uncle Buck, the directors concluded the firms were insolvent. The following link on the FCA website provides further information www.fca.org.uk/news/news-stories/basset-gold-plc-b-g-finance-administration
The Administrators are very mindful of Bondholders’ and other creditors’ understandable concerns about the current situation.
The Administrators will issue their first formal report, the “Proposals” by 26 May 2020 and are obliged to report to Bondholders and creditors within one month of every six month period in the administration.
The Administrators will also send regular updates via email, when there are matters that need to be brought to the attention of Bondholders.
All reports and email communications can be accessed via the Harrisons webpage for B&G as follows: www.harrisons.uk.com/bassetandgold
Given that the investigation into the failure of B&G and the inability of Uncle Buck, as the main borrower, to repay their loan is still in progress, it is too early for the Administrators to say categorically how much money will likely be returned to Bondholders (and other creditors) or when any payments will be made to them, an estimate cannot be determined at this time.
The Administrators are however working to identify and explore any avenues that may result in some return to Bondholders. Further details regarding this will be provided in our proposals and subsequent reports.
Yes, we are in contact with both the FCA and the FSCS and anticipate this will continue into the foreseeable future.
Section 2 – BONDHOLDER QUESTIONS
The below questions have been drafted for B&G’s Bondholders (‘Bondholders’). However, please note that a number of questions and answers in Section 1 to this document are also relevant to Bondholders.
Although there is no legal definition of a mini-bond the term usually refers to illiquid debt securities marketed to retail investors.
A mini-bond is essentially an IOU issued by a company (the issuer) to an investor, in exchange for a fixed rate of interest over a set investment term. At the end of the term the investors’ capital is due to be repaid but this depends on the success and proper running of the issuer’s business.
The B&G Bonds are an example of a mini-bond.
Please see the FCA’s mini-bond factsheet for further information: https://www.fca.org.uk/consumers/mini-bonds
The Companies’ loans to borrowers (Uncle Buck being the main borrower) are the major asset of the Companies. Uncle Buck is now in administration and it is too early to determine how much it will be able to pay back but it will not be the full amount. Whilst the repayment dates have not yet been defaulted upon they will be in the future.
Subject to statutory duties we, also being the Administrators of Uncle Buck as well as B&G, will do nothing which will adversely impact the borrowers’ ability to repay their debts due to the Companies. We can confirm that since our appointment to B&G, we have not received any returned loans or interest from Uncle Buck.
The FSCS has determined that many investors have a good prospect of claiming compensation. Please note however that this is particular to the way that the B&G mini-bonds were sold and marketed and it is worth noting that the failure of a mini-bond issuer is not covered by the FSCS.
The FSCS is operationally independent of the FCA and it is the FSCS that will determine whether compensation is payable in each case under the FCA’s compensation rules. The joint administrators are providing assistance to the FSCS in this process.
The relevant FSCS eligibility criteria can be found on the FSCS’s website
There are approximately 1,800 customers who have bought products, although some hold more than one product. We understand that the face value of the bonds issued is approximately £36m.
Firms are required to be authorised by the FCA if they undertake any of the regulated activities listed in the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (the Order). Authorised firms are subject to a set of overarching principles and rules issued by the FCA. These principles and rules have to be followed when an authorised Firm is carrying on regulated activities in the UK. The Order excludes certain activities from its scope.
Basset & Gold Plc is not authorised by the FCA. This is because issuing mini-bonds is not normally a regulated activity. However, it was previously registered as an Appointed Representative to two other FCA authorised firms.
B&G Finance Limited is authorised by the FCA. This is because this firm acted as an intermediary between Basset & Gold Plc and investors, arranging investments in the bonds. It also approved and communicated financial promotions relating to these mini-bonds.
B&G Finance Limited remains authorised by the FCA, albeit in administration, and remains subject to supervisory oversight and the FCA’s rules. However, we the administrators, are officers of the Court and have to comply with insolvency law. We are individually licensed insolvency practitioners and supervised by the Institute of Chartered Accountants in England & Wales (ICAEW).
ISA stands for Individual Savings Account and an IFISA is an Innovative Finance ISA. B&G referred customers wanting to hold their B&G mini-bonds in an IFISA to a third party fund ISA manager called Gallium.
No ISA transfers to other ISA providers can be actioned by the Administrators, the Companies or any third party.
We are in the process of contacting HMRC and Gallium regarding all of the Bondholders who have invested in their B&G bonds by way of ISAs promoted by Gallium as an ISA manager, ordinarily they will correspond with bondholders once they have completed their investigations in this regard.
The Companies’ investor portal is maintained by a third party. However, it may still be able to login to the website at: www.bassetgold/login using your individual login details, with which you were issued by B&G, at the time of your investment.
Please be aware that the system has limited functionality and, for instance, you will not be able to actually make withdrawals. The information currently available on the Companies’ platform is based on the Companies’ records at the time of the Administration.
If you have not already done so, please complete and return a Proof of Debt form to the administrators, which can be downloaded from the Harrisons webpage:
If you have not yet contacted the administrators regarding changes to your contact details, please do so by emailing the following: firstname.lastname@example.org
In the distressing event of the death of a Bondholder, the next of kin or executor should contact the administration team by email as above and you will be advised of the necessary steps to follow. Likewise, if you have been granted Power of Attorney by a Bondholder, please notify the joint administrators accordingly.
The joint administrators’ team review emails and voice messages on a daily basis and will respond to relevant queries as soon as they can.
Where financial firms enter into administration, experience is that fraudsters may sometimes approach investors claiming to be able to recover their investment in return for an advance fee. Sometimes the fraudsters claim to be from the Companies or the administrators. You should be wary of any unexpected call, email or other contact which asks you for money in this manner. FCA guidelines are available at:
No bond investments can be redeemed or transferred and in addition, no ISA transfers to other ISA providers can be actioned at this time.
B&G did not focus on distributing bonds via financial advisers. However if you recall receiving advise from a financial adviser in connection with your B&G bonds then you should contact that financial adviser directly.
We are commencing dialogue with FOS as their website advises:
We will be speaking to the administrators (Paul Boyle, David Clements and Tony Murphy of Harrisons Business Recovery and Insolvency (London) Limited) about how best to pass over the complaints currently with our service. Anyone with a new complaint should contact the administrators directly to make a claim.
If your question remains unanswered please contact the administrators at email@example.com/ or 0800 464 7767.
GDPR Fair Processing Notice
As part of our role as Administrators, we may need to access and use data relating to individuals. In doing so, we must abide by data protection requirements.
Information about the way that we will use and store personal data in relation to insolvency appointments can be found at http://harrisons.uk.com/privacy-policy. If you are unable to download this, please contact the Administrators and a hard copy will be provided free of charge.
It is important that you read this Fair Processing Notice so that you are truly aware of how and why we are using your data. This Fair Processing Notice supplements any other notices the Companies may have served on you and is not intended to override them.
To the extent that you hold any personal data on the Companies’ data subjects provided to you by the Companies or obtained otherwise, you must process such data in accordance with data protection legislation. Please contact us if you believe this applies.
Section 3 – NON-BONDHOLDER CREDITORS
Please write to us or email us, with details of your claim, to the address below, together with the supporting paperwork.
Section 4 – CONTACT INFORMATION
Write to us
FAO: The Administrators
Basset & Gold plc and B & G Finance Limited
c/o Harrisons Business Recovery and Insolvency (London) Limited
20 Procter Street
020 7317 9160
There is a dedicated voicemail facility and you will be able to leave a message if no one is available to speak to you.
The following websites will be updated
(including with this FAQ document)