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Watchstone confirms the SFO Quindell enquiry still live as full extent of the £100m plus Himex fraud revealed

By Tom Winnifrith, The Sheriff of AIM | Friday 27 May 2016


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.


Himex was the biggest single acquisition fraud perpertrated by Rob Terry at Quindell (QPP) and today the scale of that £100 million plus fraud has been laid bare as the re-branded Watchstone (WTG) has publsihed 2015 results. These show that statements made by new management with 2014 results were rash reckless and misleading but also that the Serious Fraud Office is still going after Terry and his cabal.

I knew about the SFO anyway as I know folks who have been interviewed recently. But Watchstone confirms that the enquiry is ongoing and that it is assisting the fuzz. Good news. £Why the SFO will nail Terry, Laurence Morse and others is laid bare in the 2015 results which are marked by a series of further resstatements but the big one is Himex.

This business was bought for cash and shares with the main vendor being Rob Terry's old pal from frauds gone by, Hassan Sadiq and Hassan's Mrs Elizabeth Dawson. Investors were told that Hassan and his better half were like all shareholders on long lock-ins but the RNS was misleading for they were not and so cashed in their shares almost at once as did the mysterious offshore entity DCD Holdings - an entity associated with Terry for many years. Did Terry personally gain from any of this? That is something the SFO will be establishing.

Back in June of last year when publishing 2014 results Watchstone merely market dowbn the goodwill in Himex by £22.6 million. It insisted that was a final markdown after the thorough PWC review. It said at the time that it was not and that it was misleading the market as to the true value of Himex. That left Himex with £85.2 million of goodwill and intangibles on its balance sheet. Today that has been impaired by £81.515 million. So all in all Watchstone has had to write off £104.115 million out of £107.6 million. That is a total disgrace.

And though this is a non cash item today what it reflects is the cash that went out to Himex and also the shares that were issued to its vendors (largely Sadiq, Dawson & DCD) which they flogged at once to mug punters.

Of course they were able to flog the shares in part because of the panama pump fraud involving Himex which was used to inflate Quindell's stated operating profits and cashflows and which was fessed up to and unwound last June - naturally I had exposed in it 2014 but the useless regulators did nothing. In this fraud Quindell bought an initial 19% stake in Himex by injecting shares into Himex. Himex sold the shares to mug punters and used the cash partly to cover its costs since it had no real business and men like Sadiq need to be well paid. And partly to place bogus orders with Quindell. Quindell placed some bogus orders with Himex but the net bogus order flow saw Quindell make a £5 million profit ( and generate £5 million of cash) from what was not a related party. And that £5 million came from the share sales.

Himex was always a key part of the fraud. Sadiq and his evil Mrs coined it in and investors got screwed. The only question is did Terry benefit personally from this massive fraud?

Seeing Watchstone admit to the scale of this fraud today is vindication because I wrote an awful lot about Himex and showed clearly for a long time it was a fraud. I reckon I deserve a lunchtime ouzo to celebrate this win today. Meanwhile it is good to see that the SFO is still at it. The scale of the fraud is now clear to all, surely? And that means Terry and others will go down.


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