AS MANY Wellesley clients as possible need to report to AS MANY relevant authorities AS POSSIBLE [SFO, FCA, Action Fraud-police, Financial Ombudsman etc] AND media outlets [e.g. newspapers-both broadsheet, tabloids, moneymatters etc]. Investors need to make as much NOISE AS POSSIBLE about this in AS MANY PLACES AS POSSIBLE so it cannot be ignored. I also think people should hold off on voting until the last minute [on 13.10.20 if at all] as a lot can chnage in the intervening period if there is an AVALANCHE of reports about this from all Wellesley clients to the right places.
I essentially used the same e-mail [see below] which I am happy for others too use as a template if they so wish:
Dear Sirs.
I am urgently contacting you about the above companies:
www.wellesley.co.ukAs an investor in this well-known financial services provider [P2P and minibonds provider where funds raised are used to lend to property developers]; myself and ~11,000 other investors require your prompt intervention to protect our interests. This highly serious complaint has issues of scam, fraud and unfair contractual terms.
As can be seen from the homepage Wellesley issued a Company Voluntary Agreement [CVA] to all its investors on 24.09.20 setting a deadline of 13.10.20 to vote on accepting or rejecting the CVA [220 pages]; with the threat of putting the company into administration if it is not accepted; which would likely mean many customers losing their entire invested funds and every customer having to suffer massive write offs.
Every single investor is appalled by the terms of the awful proposed CVA and the covert and disgraceful actions of Wellesley Directors and senior management [especially CEO Graham Wellesley 8th Earl Cowley]; culminating in the issue of the CVA [which is little more than an ultimatum]. The CVA and threat of administration is a disingenuous and thinly veiled attempt to 'rip off' investors for the ultimate benefit of Wellesley Group Directors and senior management.
In summary; Wellesley says that due to transient liquidity issues and potential regulatory changes in relation to listed bonds it needs to re-structure the business and has already carried out the following actions without informing its investors or giving clients any say, or vote, in this or other directly pertinent matters:
Covertly sold the loan book to another Wellesley Group company [Cloverleaf-headed by Graham Wellesley] for a massive 50% discount to fair value with deferred payment by Cloverleaf, but that company effectively getting a huge benefit when the ~UKP 100 mill of loans get re-paid by developers over the next 1-3 years; notwithstanding the ongoing interest payments by them. In essence; Cloverleaf is getting a UKP 100 million asset for a deferred payment of UKP 50 million.
Supposedly offered the loan book for sale to 15 other potential buyers but that its own 'in-house' bid was 'best'. There has been no transparency on other bidders, or their bids, or that such a process has properly been carried out in the best interests of Wellesley investors/clients.
Wellesley is also seeking to blame the Covid-19 pandemic for the liquidity issues; but in reality, the company has been appalling mis-managed for some time and one now to wonder whether that was done on purpose?
The CVA seems totally contrived and part of a calculated strategy to 'rip off' investors with additional indicators:
No discussion or proposal on other obvious options for dealing with the transient liquidity issues such as
Requesting clients to take a payment holiday
Requesting clients take an interest rate cut
Extending maturity dates
Introducing a monthly service charge.
A very lengthy and complex CVA document [220 pages] with only a short time given for evaluation. The implied threat that the company 'may' [threat: 'will'] be put into administration if the CVA is rejected with all investors losing 'big time' [especially minibond holders].
Cloverleaf will easily be able to afford on-going development tranche drawdowns as it has deferred payments for the Wellesley loan book and will not be paying Wellesley investors [interest payments and capital on maturing/already matured; but currently suspended products]. When the development loans begin to be re-paid [capital and on-going interest]; Cloverleaf will be able to afford the deferred payments to Wellesley Finance plc from which the hugely discounted CVA amounts will be paid to Wellesley clients and a vast profit will be retained by Cloverleaf. Totally disgraceful and unethical.
They key questions for the FCA are:
Is/Was the loanbook sale to Cloverleaf legal, challengeable and reversible?
If Wellesley is put into administration does it mean that it now only has deferred assets of UKP 50 million rather than the UKP 100 million it had before 'in-house' sale in 1.?
Can Wellesley be forced to retract or suspend the current CVA vote [expiring 13.10.20] whilst FCA investigates?
If Wellesley clients vote for the CVA, and it gets passed, does that mean that they give up any legal re-dress against Wellesley and its Directors?
If the CVA is rejected can Wellesley clients prevent the company disingenuously being put into administration without all the other possibilities for resolving the transient liquidity issue being investigated?
Is Wellesley playing a game of 'brinksmanship'/chicken' with its clients in the hope they can 'bounce' clients into this awful CVA for the ultimate huge benefit of its Directors/Senior Management?
What other urgent actions can FCA take in relation to these matters?
I have attached the Executive Summary for the CVA as issued by Wellesley.
Please investigate, take expedited action and revert as a matter of the highest priority.
