By Newt Seaman | Friday 10 March 2017
Ever since promising a terminally ill colleague, who lost far more than I did on Tim Baldwin’s formerly AIM listed train wreck TXO, that I would do all that I could to prevent Tim ripping off more ordinary investors. I do not really care about so called sophisticated investors and High Net Worth Individuals as they should know better and can afford to lose a few £10ks anyway, unlike ordinary investors who have to rely on what they are told by supposedly FCA authorised firms and individuals. Anyhow what is Tim up to now? Be warned!
Around the time the TXO was booted off AIM, Tim incorporated some new companies. One was Cleaner Fuels Ltd and he very generously gifted shares in this company to trapped TXO shareholders and a few months later tried to convince them to put more money in through a private placing. Tim’s FCA authorised Equity for Growth (Securities) (EfG(S)) was the agent for this placing to give it an illusion of respectability.
It would seem that the trapped TXO investors have learned their painful lesson, as there has been no SH01 filed with Companies House for the issue of placing shares, despite Tim using his usual line that the placing was already underwritten by others and he was doing shareholders a favour by letting them get in. It was the knowledge of this that sparked my interest in another serial business failure, who has cost investors and creditors a fortune over many years, announcing that trapped Worthington shareholders were going to be gifted shares in a new company / conglomerate.
Another company Tim incorporated around the same time was Red Squirrel Group Ltd, which is a holding company for two related brewing businesses run by Tim’s brother in law. Red Squirrel Group is due to file its first accounts by 20 Mar 17. The latest available accounts for the subsidiaries give a combined NAV of minus £37,175. I have no reason to believe these businesses are anything other than genuine and honestly run, but they clearly need funding to cover ongoing losses and to expand.
How can Tim help them raise that money? I understand they have successfully raised money in the past through the FCA authorised Crowd Cube, so why bother with Tim? It would seem that a new crowdfunding attempt is indeed being made, but this time through “The Right Crowd”. “The Right Crowd” is not FCA authorised in its own right, but is an appointed representative of Tim’s EfG(S). From discussions with the FCA it would seem that this is permissible, but EfG(S) has to carry out the same checks as FCA would if they were authorising the firm.
The Right Crowd Website is here and the page for the fundraise is here You will note that it is promoting the rebranded “Mad Squirrel” and is just over £70k, at time of writing, into a £1m fundraise which would value the business at around £9m post funding. However the corporate report to support the fundraise says they are raising £1.5m.
But who is behind “The Right Crowd” and why do they need to be appointed representatives and not just get FCA authorisation in their own right? The directors of "the Right Crowd" are Thomas Knifton and Nigel Weller (son and right hand man of the infamous Leo Knifton - do a google search on Leo Knifton Boiler Room Scam ).
Thomas came to infamy in his own right involved with firms selling worthless carbon credits shut down for "one giant scam" and Major carbon credit network unpicked by the Insolvency Service - “This stoke of boiler rooms was one giant scam emitting the now all too familiar hot air on an industrial scale, persuading ordinary people to part with their hard earned savings to invest in near worthless voluntary carbon credits which were aggressively peddled to them by these companies at significantly inflated prices” - clearly Thomas is a chip of the old block. And very clear that even the chocolate teapots at FCA would balk at authorising a firm run by these 2.
There is another crowdfunding firm acting as appointed representatives of EfG(S) called Service Crowd. I have not tried to research it, but will leave that to the chocolate teapots who confirm “I have today referred the additional information you have provided regarding The Right Crowd and The Service Crowd Limited to the supervisory team that is responsible for mentoring the conduct of Equity For Growth (Securities) Limited.”
Now it could well be that Thomas and Nigel have had a Damascene moment at the church of St Aidan and have decided this is the best way they can pay back all the people who have lost money on their various schemes over the years, as St Aidan is clearly trying to do with his scheme for trapped WRN shareholders, if only the malicious Tom Winnifrith would leave him alone to get on with it.
Or it could be the chocolate teapots just put it into the all too difficult, it is only ordinary investors who are likely to get ripped off and we put up enough warnings about the risks of crowdfunding and allow it to continue. In which case if St Aidan finds he can no longer find puppets to act for him in his role as shadow director he could also become an appointed representative of EfG(S).
Just maybe the chocolate teapots will actually act to protect ordinary investors this time. If not I have other irons in the fire to enable me to meet my promise and I will update on them at an appropriate time.
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