A spokesperson for the company has confirmed that it has applied to the High Court in Saint Vincent and the Grenadines, where Harlequin Property SVG is based, appointing KPMG as interim receiver over the assets of the company.
Receivership is a type of corporate bankruptcy where a third party is appointed by bankruptcy courts or creditors to run the company.
In this case, KPMG will be given the ultimate decision-making powers and has full discretion in deciding how all land and assets owned by Harlequin Property SVG will be managed.
“An interim order in St Vincent is being perfected in court today and has not been seen in its final form, which limits our ability to comment in full at this stage; however, we understand that the interim order is intended to protect Harlequin Property (SVG) Limited’s assets on a temporary basis until a proposal is made. Harlequin expects to present its proposal in early 2017,” the Harlequin spokesperson told International Adviser.
In October, the company officially entered insolvency proceedings – a decision likely to result in hefty losses for thousands of investors.
Harlequin claims
Founded in 2005, Harlequin is an unregulated property scheme based on luxury villas in the Caribbean and other exotic locations, promising ‘guaranteed returns’ of 10% a year, which have never materialised.
More than six thousand UK savers ploughed over £400m into the scheme on the recommendations of financial advisers.
It ran into trouble in 2013 when the Financial Conduct Authority (FCA) issued several warnings, while the Serious Fraud Office is looking into the fund amid several legal cases.
The UK’s Financial Services Compensation Scheme (FSCS) has already paid out £100m in claims to investors who received poor advice from financial advisers regarding investments in Harlequin, with many advisers being declared bankrupt after failing to cover client claims.
The FSCS has also written down the value of the investment to nil for compensation payment purposes.
Last week, Harlequin Property SVG won a $11.6m claim against its former accountancy firm Wilkins Kennedy in a case that drew heavy criticism to both parties.
In a damning verdict, Justice Coulson said the money should not be paid directly to Harlequin Property SVG until issues around compensation for investors are resolved.
‘Held to ransom’
Meanwhile, local media in Saint Vincent and the Grenadines, where Harlequin’s Buccament Bay resort is located, have reported that staff at the resort have been on strike because they have not be paid while electricity to the resort has been cut off.
Harlequin has blamed this on the resort’s suppliers for refusing to wait for monies due from the Wilkins Kennedy win, despite the judge in that case earmarking it for investors.
“Sadly, within a week of winning the [Wilkins Kennedy] case, where monies (to the extent recoverable) will not be provided until earliest end of January, suppliers of the Buccament Bay Resort have already stated their clear intentions by changing agreed payment plans and making unrealistic demands with the threat of disconnecting services,” said a spokesperson.
“Harlequin will not be held to ransom as it has been before.
“It has therefore decided on a managed temporary closure to take place at Buccament Bay Resort with immediate effect, with a skeleton staff maintained to secure the premises.”
