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By Tom Winnifrith | Wednesday 15 July 2015
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
From the makers of the truly appalling The Only Way is Essex (TOWIE) we have a new reality show out this summer Life on Marbs. Set in the Costa del Crime it features a bunch of men and women whose aim is to shag anything that moves, and who all appear to be rather light in terms of the little grey cells. And its big star is John Stretton Knowles, who may well soon be chatting to the Serious Fraud Office about his role in the stockmarket’s biggest fraud for 20 years – Quindell PLC. Not that ITV seems to know about that.
JSK is described by ITV as a millionaire who is retired aged 35 and a bachelor. Well sort of. As he splashes the cash ostentatiously on the show I am sure lawyers for his ex-wife will be watching with interest. But how did he get his money? According to the Daily Mirror which – like the Sun and the Daily Mail – has been lapping this all up:
Millionaire entrepeneur Jon Stretton Knowles is the one who spent £450,000 on two Ferraris in a week. He doesn’t like to boast about it though, obviously.
Jon, 34, also lets slip: “I spent £85,000 and that was a heavy night in Cannes, but I have also had big days and nights at Ocean Club, like 40 or 50k days.
“A couple of grand? We would do that every night. If it was a quiet Wednesday and we went out to Pangea, yeah we would drop a couple of grand. If it is a Saturday night and we have got the boys out, we’d be a bit more extravagant.”
Jon, made all his money when he floated his sales business on the stock market and then sold it for millions. He now owns property and a country club back in the UK, but is essentially retired – and all before he hits the big 35.
ITV might believe JSK’s CV but it is of course total fiction. Stretton Knowles was indeed part of a business that floated on AIM in April 2011 – Quindell PLC. Through a series of fraudulent deals, Quindell was once valued at £2.5 billion. Its shares are now suspended with a nominal valuation of just £500 million as both the Serious Fraud Office and FCA investigate all its fraudulent deals. And at least one of those fraudulent deals has Stretton Knowles at the heart of it.
JSK was not a key figure within Quindell which, when it listed on the stockmarket, was a business reselling services for mobile phone companies. Its largest contract was with Vodafone. But within two months of listing, in June 2011, Vodafone terminated that contract alleging that Quindell was miss-selling and ripping off customers (see HERE). And who was in charge of sales? None other than JSK.
Because it was a fraud Quindell did not announce that it had been fired but carried on making a series of acquisitions by issuing shares. It was able to do this because the share price was pushed higher because the company was cooking its books, reporting profits that were entirely generated from fraudulent transactions. And Mr Stretton Knowles took advantage of this share price strength to sell many of the 43 million shares in Quindell he had been gifted when it floated.
Stretton Knowles then took a back seat but re-appeared in September 2013 as Quindell was once again running out of money. On 2nd September 2013 Quindell announced that it had issued £2.77 million worth of shares to the owners of one of its subsidiaries as a reward for beating profits targets. As it happens that subsidiary was making losses so that was a lie. And the second lie was that in fact the shares were issued to Mr Stretton Knowles.
£2.77 million minus capital gains tax is £1.97 million. On the same day in September Mr Stretton Knowles bought the company that owned the Quindell Country club in Hampshire from Quindell for £1.95 million in cash. £1.95 million + stamp duty is £1.97 million.
So in effect Quindell got a £2 million cash injection and JSK picked up a country club at no cost to him. And this was only possible because Quindell was committing securities fraud and accounting fraud – as I explained in more detail HERE
The financial regulator, the FCA and the SFO are now looking at the Country Club transaction and numerous other deals in what is set to be the biggest stockmarket fraud for 20 years.
In flaunting wealth that has been entirely obtained from the financial fraud at Quindell on Life on Marbs, Mr Stretton Knowles is unlikely to endear himself to the SFO and other investigators. Given his direct involvement in the Country Club fraud he should enjoy himself in Marbella whilst he is still at liberty to do so.
As ever, prizes to the pathetic journalists on the Mail, Mirror, and The Sun for sucking up all the PR bullshit and not bothering with a fact check.
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