Harlequin Update – 25th April 2013
The Harlequin Investor Group (HIG) have met following the Harlequin presentations over the last few days.
The presentations brought forward two key issues.
1. The re-financing of the Harlequin companies and the “Rescue Plan” and ;
2. The quality of the initial advice surrounding the investments in Harlequin.
The key to any financing is that those providing the monies are confident in both the company and the investors. We have little evidence as to the progress being made with regard to the finance.
HIG are seeking Dave Ames’ permission to talk to James Cannon of Eleven Capital Ltd (the finance broker) and James Baker (the Harlequin accountant) regarding refinancing and re-launch plans. HIG are prepared to sign confidentiality agreements to facilitate this. Very simply, the HIG are requesting this consent by the end of next week (3rd May 2013).
HIG feel that if we can achieve this and be able to confirm to investors that the financing progress is both genuine and on going. Any financing arrangement will require investors to engage positively. In all likelihood, any financing arrangement will require investors to agree new terms. These terms will need to be negotiated and agreed.
There is no doubt that those holding Cancellation Agreements, holding Finance Agreements (with missing payments) or holding contracts via their SIPP will need to be accommodated. The Harlequin Investor Group can assist Harlequin with this process while providing reassurance to investors that the process is ongoing and viable.
HIG are seeking disclosure of the “Rescue Plan”. This document is core to the interests of all investors. It is the “Rescue Plan” which will dictate whether finance is available. Once again, the HIG are prepared to sign confidentiality agreements to facilitate this.
Suitability of Advice
HIG are seeking to agree a process with Harlequin to facilitate the review of all investments through SIPP or those which have utilised a re-mortgage. The advice to invest into the product is in general terms very poor. However, the Harlequin business would be strengthened (to the benefit of all investors) by those with unsuitable advice being able to bring the relevant third party redress claims. Harlequin did not provide the pension transfer advice / re-mortgage advice as they are not regulated under the Financial Services & Market Act 2000. The practical position is that there is a significant number of investors for who it was never suitable to invest into the Harlequin product. Many of these people cannot complete as their financial position does not allow it. Therefore, they need to be highlighted as they will (on any sensible analysis) not be part of any future property ownership with Harlequin.
The HIG were informed that the Brazil development has been cancelled and that Harlequin currently do not own any land in Brazil and therefore have no planning permission. Those investors who wish to have their deposits refunded should apply direct to Harlequin citing this confirmation of no further development action.
HIG fully understand that those holding valid Statutory Demands need to see verifiable progress in order to persuade them to defer any action. The above suggested process allows a fair period of time for Harlequin to engage with the HIG. It also allows the HIG to confirm to investors what is happening which will assist in restoring confidence in the current position. The reverse also applies.