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By Tom Winnifrith | Saturday 3 February 2018If you like this, please share this article using the buttons below
One matter that leaps out at me in the devastating report into the collapse of Ariadne Capital Limited leaving dozens of creditors to whistle for millions, is the quite extraordinary related party transaction involving Entrepreneur Country and Julie Meyer MBE. This stinks to high heaven.
Entrepreneur Country is Julie's networking business. I have already demonstrated that her claims to have 320,000 citizens are utterly spurious, here. Worse still the operation is a basket case. Its 2016 accounts show sales of NIL, a loss of £918,550 ( up from £540,024), cash £4 ( i.e. 400 pence) up from £0, amounts owed within one year of £3,105,904 and thus net assets of MINUS £2,958,824. That surely is a worthless crock of shite.
Yet the 2016 accounts states that in November of that year this operation was sold by Ariadne Capital Limited ( 95% owned by Ms Julie Marie Meyer MBE) to the ACE Fund, that is a fund managed by the Ariadne Group with a large pool of external investors. Julie stated in the accounts "This was judged to be of strategic benefit to the ACE Fund"
According to the 2016 accounts of Ariadne Capital Limited the company made an operating loss - as it had done in the prior year - of £410,000 but, praise the Lord, then booked a £3.75 million profit on disposals so was able to report a profit of almost £3 million! It also reported a massive increase in trade receivables to £7.132 million. But at least net assets were £3 million at the year end.
Wind forward to the administrators report and we discover that Entrepreneur Country was sold for £4.5 million to the fund ( owned by a large pool of external investors) so that was a massive premium to its book value which itself looks very generous given that Entrepreneur Country appears to be an insolvent basket case.
The administrator makes clear that there are not one but two related party debts there. One with the fund and one with Ariadne Group, Julie's Malta based company which itself is being pursued by a legion of folks over unpaid bills. I have spoken to a number of them and numerous legal actions against the Maltese holding company are in the offing.
But what of the fund? I am told that, having been a dismal performer it has assets ( investments in unlisted so very hard to trade) equity of c£7 million. So how on earth did it expect to find £4.5 million of cash back in November 2016? It has still not paid and how on earth can it pay? And why would a fund with a £7 million portfolio wish to splash out £4.5 million on a company that is clearly a worthless crock at death's door in a transacti8on which appeared to bail out another company which is 95% owned by the person who is managing the fund? Except that the fund was unable to actually pay.
Maybe I am missing something but this all looks a bit strange to me. The fund management operation is currently under the auspices of the Maltese Regulator (the MSFA) and if I were them I would be questioning whether anyone behaving in this way should hold a license.
There is a wider issue. Should the administrator not demand that the fund hand over the bulk of its investment portfolio in order to satisfy its part of this transaction? That might screw the fund completely since it would then have to sell its remaining assets to support the cashburn at Entrepreneur Country but it would raise the prospect of all those poor saps owed cash by Ariadne getting something.
As I said, the MSFA and FCA - which authorises Julie personally - should surely be having a butchers. But then again maybe I have missed something becuase the Lord does, after all, work in mysterious ways.
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