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Wednesday, 26 June 2013

Nouveau World Wines/ Finbow 24th-25th June: Rebecca McDonald's evidence

24th June 2013
Rebecca (Becky) McDonald gave evidence to her defence counsel: Steve Bailey. She had started on Friday - I was not present in court for this. 

Much of her evidence was taken up with going through invoices and payments made by Finbow Wines with Rebecca McDonald giving details of the various payments. I assume that a similar exercise had been conducted by her counsel with payments made during McDonald’s time with Nouveau World Wines. She started there in September 2008.  

McDonald explained that she was involved with accounts covering sales and clients but not after-sales. She had no way of knowing how much wine had been bought, not involved in buying wine and she had no influence over company decisions.

 Among the invoices was one to Eurodirect in July 2009 for the purchase of 6000 leads to be used for the start up of Finbow Wines Ltd. 

McDonald believed that Finbow’s ‘Buy Back Guarantee’ was genuine. She was “horrified to hear a recording of ‘manipulative bullying’ sales tactics that was typical of Billy Davies’ style of work. Had she known of this in September 2009 she “would have walked away – would have resigned”.

 She was “horrified that some investors had paid in £150,000 and had nothing to show for it but had no idea” that this was happening. McDonald thought that enough wine was being bought – “thousands of bottles of wine sufficient to cover the wine bought by investors”. She had nothing to do with the brokers.

 McDonald was taken through a number of invoices and payments to Paul Kelly and his various companies by her counsel. The invoices showed that Kelly was arranged to pay the rent for some people in Finbow including Daniel Snelling and Billy Davies as well as for various cars including a Porsche, which she queried, a Range Rover, a Q 5 (Audi) and a TT Audi. Kelly charged a commission which varied between 10%-15%.

McDonald had a BMW, which she bought seven years ago in a one-off payment of £13,000 before she joined Nouveau/Finbow. Her mortgage payments came out of her salary of £30,000 a year and she received no bonuses.

McDonald explained that often she had to make the transfers before receiving an invoice from Paul Kelly and that she often had to chase him on several occasion to obtain and invoice. “I tried my hardest to keep a track of what was going out.” In October 2009 she created a series of spread sheets detailing payments for cars, rents etc and set them at the end of every month to Daniel and to Billy Davies.

 McDonald described on one occasion how Billy Davies hassled her into making a transfer for him. Davies made a series of phone calls to McDonald including calling her at home during the afternoon when she was looking after her young son who had a kidney problem. “Stupidly I did it going to the bank and kept my son for an hour and half in the cold car. Six weeks later I found out that the transfer was to pay Billy’s rent.”

 She described Billy Davies as confrontational. “I could have asked more questions of the payments to Billy but I didn’t feel that I had the back-up of Daniel and Dina” (Snelling).

Asked about a company called M to M Ltd, McDonald replied that this “was part of Daniel’s wider plans”.  She was acting under instructions from others in the company and in December 2009 had no concerns over the company’s credibility.  Bailey asked her about a series of duplicate invoices – one showing payments required for cars, rents etc. with a second one for wine for the same amount. McDonald said that she had not seen the invoices for wine. She had no idea who had put the second invoices into the file but that these invoices could have been filed by other people in the office. 


At the end of January 2010 McDonald decided that she could no longer continue to work for Finbow and on 29th January sent a letter to Paul Rees, then Finbow’s director, saying she was resigning with immediate effect but would work out her one month notice period. She was no longer able to work with the floor manager (Billy Davies). ‘It had been a real pleasure working with you’ (Rees).McDonald explained that she was not comfortable with the amount of money going out of the company. “I was spending more time in the bank than in the office. It was impossible to keep on top of it. Billy Davies was running the show. She had not spoken to Daniel because he was stepping back from the company.McDonald was then questioned by Simon Dempsey’s counsel. Her previous employment had been with KPMG where she had worked for 14 years as a PA to one of the senior partners managing his diary. She was line manger for support staff. There was no accountancy involved. She earned £34,000 a year. At Nouveau/Finbow her salary was £30,000.

In January 2010 large amounts of cash were going out Finbow. “Money was being spent like it was going out of fashion….so much cash was going out”. Back in October she hadn’t questioned it because there was “a lot of money coming in”. “The month to month bills were being covered.” In January 2010 much more cash was going out of the company than was coming in. McDonald became concerned – “this is not right”.      

Tuesday 25th

Cross-examination by Julian Christopher
McDonald explained that she started at Nouveau in September 2008 to help Dina Snelling with the admin. At the time “there were no records to speak of – no proper paperwork in place”. Her job was to sort out the paperwork. She shared an office with Dina Snelling and had a chat with Dina about recordkeeping but no detailed discussion.  McDonald dealt with the paperwork that was there. She did not deal with records of how much wine was bought and had nothing to do with the stock of wine. McDonald set up a system for recording investors’ purchases. 


Christopher asked her about the CIB (Companies Investigation Branch) investigation by Mr Streeter in March and April 2009. He suggested that the records had been created to answer Streeter’s questions about how much wine had been bought by investors and how much had been purchased by the company. Rather than being created in September 2008, they were created in March 2009. McDonald said that this was not correct. She had set up the system in September 2008 and that it was a work in progress. There was reference to a document that post-dated Streeter’s investigation but McDonald agreed that an earlier version would have been shown to him. Christopher asked why only clients with surnames A-K were recorded and that for many investors listed the column referring to stock in Winevaults was blank. McDonald did not know. She didn’t think that she had put those columns into the document and after she had created the template she had passed it over to Dina for it to be kept up to date. Christopher also asked her why the filing system adopted was so cumbersome for new names of investors.  

During Streeter’s investigation she had asked Daniel Snelling for details of inventory at Winevaults but he did not produce it. Only a few big investors had their own accounts at Winevaults. The rest of the wine was in the Nouveau World Wines account at Winevaults. When Daniel Snelling returned from Australia in early May 2009 he said that he had been shafted and that only half the wine that Nouveau World Wines had ordered had actually been purchased. McDonald said she believed that Daniel was referring to Sultan Trad here.She had no dealings with the Global Wine invoices. Dina Snelling’s evidence was that Becky had been involved. She had no dealings with Riddingtons (accountants in Sidcup), over wine stocks – Daniel Snelling handled this.


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McDonald was asked about a complaint from investor Peter Podmore that involved an exchange of emails on 4th and 9th March. Podmore was querying why some of the wines that he had bought were not in storage at Winevaults in Sydney, Australia. He was threatening to expose Nouveau through a blog post and was demanding a full return of his money. Podmore had been in contact with Winevaults.



On 9th March Dina Snelling sent an email to Winevaults that there was 'a discrepancy' over Podmore's paperwork. McDonald was copied into this email. The same day Dina sent an email to Podmore telling him that there is a discrepancy in you wine stocks and until I hear from Winevaults themselves I cant give you the information you require. McDonald was not copied into this email. Christopher said that Winevaults were being told one thing and Podmore another.   

On the advice of Riddingtons Nouveau World Wine was put into liquidation. McDonald explained that Finbow was always part of Daniel’s plans. Although Simon Dempsey was the director, it was Daniel’s company. He was running the company and owned it. The advice from Riddingtons was that Daniel Snelling might to barred as a director because of what had happened to Nouveau World Wines.

Use of false namesWhen Finbow was starting up McDonald was asked to change the name she used in the office in order to hide the connection with Nouveau World Wines - not to link Finbow and Nouveau.

She declined to use a false name but did use her second name Louise rather than Rebecca. Others in the company did change their false names for the changeover from Nouveau to Finbow. Michael Lancaster (Michael Snelling) became Michael Jones. Lucy Jones (Dina Snelling) became Harriet Harbridge, while Daniel Snelling was known as Aston. McDonald said the use of false names did not concern her - she was used to the traders using them. Christopher asked whether Dina Snelling was an opener at Finbow.  He remarked that Dina Snelling had kept the name Lucy Jones during the time of Nouveau World Wines for the sake of 'consistency'. Now the change of name was to "avoid consistency".    
 

Sunday, 23 June 2013

Nouveau World Wines Ltd/ Finbow Wines Ltd fraud trial: Dina Snelling cross examined


Greenock Creek, Roennfeldt Road, Shiraz 
Label for 1999 shown but nb this case involves 2002 vintage
label from wine-searcher.com



Defendants:
Simon Robert Dempsey
Rebecca Louise McDonald
Daniel Thomas Snelling
Dina Louise Snelling

The case before His Honour Judge Michael Grieve QC  is in Court 8 at Southwark CrownCourt, London SE1. 

Dina Snelling: cross-examination on 19th June and 20th June
with Jane Osborne prosecuting. 

Dina Snelling was asked when Nouveau World Wines Ltd started. Dina didn't recall when the company started. She explained that for much of 2006 she had been in hospital as she had a very difficult pregnancy. Nouveau World Wines started receiving money in the summer of 2007. Dina was not aware of the size of the company at that time or from where it was operating.  

When Dina joined Nouveau in March 2008 there were 10 people working there – three or four openers and two closers plus Daniel Snelling. Asked about Simon Jenkins, the finance director, Dina replied that he had left by the time she arrived. Dan Jackson was the business development manager. There was no finance director to replace Jenkins.

After a couple of months working as an opener, Dina moved to the back office to work with a Lucy Jones. When Lucy Jones left Dina took over managing the office and used Lucy Jones' name. Asked whether she got Lucy's permission to use her name, Dina said no she didn't think to ask. 

Osborne suggested that Lucy Jones and Simon Jenkins never existed that instead they were personas of Daniel Snelling. Dina disagreed saying that Lucy existed but she couldn't comment about Simon Jenkins as he had left before she started in March 2008. However, documents continued to be sent out in the name of Simon Jenkins, finance director, after Dina took up her role as office manager. For example, a receipt sent to Mr Ore on 28.7.2008 was signed by Simon Jenkins, although there was a pp, there had been no permission sort or given to use Jenkins’ name.

Dina agreed that at this point there was no real organisation of records etc.

In June 2008 she took over the running of the Globex account from Dan Jackson. This account was used to transfer money to Australia for wine purchases. Australia was the sole country where Nouveau was buying wine. In total just under £450,000 was transferred to Australia to pay for wine purchases. Of this total £100,000 was transferred before Dina took over responsibility for the Globex account. This responsibility ran for 10 months from June 2008 to April 2009. Over this period £350,000 was sent.

Osborne asked Dina Snelling whether she thought this was enough to cover all the investor trades being done by Nouveau when the individual trades were mainly for £5000 or more and sometimes as much as £30,000 to £40,000. Dina: “I thought £35,000 was a lot of money to cover the cost of the wine.” 

Peter Podmore
Dina was questioned at some length over a number of wines that Podmore, an investor, bought from Nouveau World Wines and should have been stored in his account at Winevaults in Sydney.  The questioning focused in particular on 144 bottles of Greenock Creek 2002 Roennfeldt Road, Shiraz, Barossa Valley, Australia. Asked why it wasn’t in Podmore’s account, Dina said that Podmore had not decided which wines from his portfolio he wanted to sell. Osborne asked what difference did it make – the wine could have been transferred into his account. Dina reiterated that Podmore hadn’t decided which wines to sell.   

In all there were only six or seven investor accounts opened at Winevaults in Sydney.

She was asked about the initial plan for Finbow Wines Ltd to offer Old World Wines. She said that there was a white board on the wall of the trading floor, which showed them which wines were for sale. No wines had been bought. The intention was to set up a storage account at London City Bond (a bonded warehouse) but one wasn’t in place at the time. Finbow Wines was a joint partnership between Simon Dempsey and Daniel Snelling. Dempsey speaks fluent French. 

Dina was asked about Green Leaf, the proposed eco friendly, ethical, sustainable investment – wind, water, Dina: “Australia has drought problems”. She explained that she went out to Australia in late December 2009 to start a new life and it was her role to set up the office in Sydney. The plan was for an office employing 12 people – openers, closers and a back office. It would have been the responsibility of Daniel Snelling and/or Billy Davies to source the green investments. She returned at the end of January 2010 at the request of Daniel Snelling to sort of administration problems at Finbow.

During the time of Nouveau World Wines Dina was paid by cheque or by bank transfer; during Finbow’s existence she was paid in cash. “This was how I wanted to be paid,” she explained. She denied that the arrangement was designed to hide how much money she was taking out of the company.  Regarding her salary with Finbow there was no written agreement, no pay slips or records totalling what she had been paid.  

Finbow: three containers
Once Finbow moved over to selling Italian wine to the Asia-Pacific market there were three containers sent – two went to Hong Kong and one to Nigeria. Asked why Nigeria as it had nothing to do with Finbow, Dina said that that was a question to put to Daniel.

The last shipment went in September 2009. Dina explained that after September she had said that she did not have time to arrange shipments due to pressure of work in the office. 

Two sets of invoices
Dina Snelling was asked about the two sets of invoices found on the laptop computer seized by police in Simon Dempsey’s car in November 2009 and on a USB stick found in March 2010 at Daniel Snelling’s home. The first set of invoices was from Dragon Tower, while second set is ‘purportedly’ from Global Cellars – the prosecution alleges that the second set of invoices was created in house at the time when the company was subject to an investigation by the UK Companies Investigation Branch (part of the Insolvency Service).

The alleged intention was to hide from Mr Streeter from the Companies Investigation Branch that Nouveau World Wines Ltd had bought nothing like enough wine to cover the amounts ordered by their investors. Thus a second set was created in March 2009 with amendments being made over 3 hours 35 minutes on 24th March 2009 – starting at 20.07 and finishing at 23.42. The total spent on wine in the second set is the same as the first set of invoices. The difference is that there is more wine and prices of the wine are less in the second set.

Dina Snelling denied that she had created the second set of invoices – she would not be working at ten o’clock at night! The computer was not exclusively hers there were other people in the office who had access.

Osborne suggested that: “she was best placed to do this exercise" (create this second set of invoices) as Daniel Snelling was useless at computers as Dina had already testified. Dina denied that she had created the files and said that Daniel knew enough about computers to save files.  

Dina Snelling’s case closed on Thursday afternoon (20th March).

Rebecca McDonald’s case was scheduled start on Friday morning. I did not attend court that day. Once McDonald's case is finished the trial will move onto closing speeches followed by the summing up and directions to the jury by His Honour Judge Michael Grieve.  



Friday, 21 June 2013

Winnington Fine Wines Ltd – scarper leaving investors short of wine

Winnington Fine Wines Ltd: 'We offer a comprehensive service'
Unfortunately this service appears not to extend to buying investors' wines

Winnington Fine Wines Ltd is yet another short-lived, fly-by-night wine investment company. Formed on the 23rd January 2012 the company stayed around long enough to trouser investors' funds – apparently buying a small proportion of the wine ordered.

Winnington Fine Wines Ltd modestly called themselves 'a leading wine broker' but they were active for only a year at most before pulling the plug and disappearing from the 4th Floor, 40 Marsh Wall, Docklands, London W14. The sole director of Winnington Fine Wines Ltd was Mrs Narif Aziz born on 25th July 1972. Winnington's annual return is overdue, now accounts have been filed and the company is in the process of being struck off with the first Gazette on 21.5.13.

Winnington shared this address near Canary Wharf with two other companies – Creating Success Ltd (proposal to strike off – first Gazette on 11,6.13)  and Gig UK Investments Ltd (dissolved 7.5.13). Again a Mrs Narif Aziz was the sole director but this time born on 13.1.1958. Either she is the child bride of the Mrs Aziz, who is the director of Winnington Fine Wines Ltd, or botox and other cosmetic surgery procedures have worked wonders. 

What is not known at this stage is how much wine Winnington Fine Wines Ltd bought and how much their clients hoped they had bought. One couple who paid out £27,000 while dealing with a broker called Adam Brown – almost certainly not his real name – are devasted to discover that only a small fraction of their wine actually exists in their account at London City Bond. At some stage during its brief life Winnington Fine Wines Ltd did have an account at LCB but this is now closed. 

Clients of Winnington, who discover that they have wine missing, should make sure they file a compolaint through ActionFraud.  

Given the number of scam wine investment companies it is amazing that anyone cold called about wine investment doesn't immediately associate wine investment with ostrich eggs or emails (Nigerian 419s) purportedly from President Mobutu's widow eager to deposit at least £20 million in your bank account.

Equally I'm also amazed that any wine investment company that likes to think it is legitimate would consider cold calling as an appropriate sales tactic. 

A previous post on Winnington Fine Wines Ltd and an article from The Mirror.  

Thursday, 20 June 2013

Nouveau World Wines/ Finbow Wines trial: Wednesday 18th June 2013 – Dina Snelling takes the stand

Dina Snelling took the witness stand and was questioned by her counsel – Nick Corsellis.

She told the jury that she was born on 4th December 1977. She is of previous good character, no previous convictions and this is the first time she has given evidence in a court. She left school with no formal qualifications and started work as a nanny/child minder looking after babes up to children aged 13. After doing this for some five years she became an air stewardess working for British Caledonian before moving into secretarial work where she stayed for around five years. She has no qualifications in business management.In January 2007 her daughter was born. The father provided no support. From late 2007 to early 2008 she worked as a painter, decorator and cleaner. 


Dina was asked how the Snelling family viewed Daniel's new business, Nouveau World Wines. "Daniel had been in the wine trade for three or four years. He had extensive knowledge about wines - he was for ever going on about wine." Dina agreed that he was an expert. "The family were proud that Daniel's new business was thriving and he was doing so well."

Dina: "At the end of 2007 I had no work and didn't know what to do. I had been left by my daughter's father." At Daniel Snelling's suggestion she joined Nouveau in early March 2008 as an opener, which involved phoning people up to introduce them to wine investment and to the company. She worked using phone numbers on an Excel spreadsheet and would arrange to send a company brochure if there was an interest.   

It was not a job she enjoyed nor was she very good at it – ‘it was quite deflating you need quite a thick skin”, so in May 2008 she moved into administration. Initially she worked with Lucy Jones, who Dina described as “around 5ft 4 with dyed ginger, blonde hair, needed a good wash and had a problem with her nose”.  When Jones left, Dina took over as office manager. She adopted Lucy Jones' name for the sake of “continuity and to save the expense of having new business cards printed”. 


She described the record and filing system at Nouveau as “just chaos – couldn’t find anything”. Lucy Jones “hadn’t filed anything correctly, had rewritten one document over another, meaning that it would indicate just one trade instead of multiple trades”. There was no one doing the books. “Daniel (Snelling) chaotic. His organisational skills? – none.” One of her roles became to sort out the filing and records. 

Asked about how much wine was purchased, Dina said “she didn’t have a clue – it was never mentioned. It was not her job to monitor wine purchases.”

At Daniel’s request Dina took over the Globex account – transferring money to Australia to pay for wine purchased. “We were buying a lot of wine – huge amount of money transferred.”

 
There were no board meetings – no meetings. She said that Daniel was “good at delegating – quite good”. “There was no-one in charge of accountancy – not aware of any records being kept.”

 
Turning to Winevaults, the storage company in Australia, Dina Snelling said she “was concerned about Winevaults’ efficiency”. She had “a few issues later in 2008, which increased in 2009”. She described how she and Rebecca McDonald had sent two large parcels of documents to Winevaults at the end of 2008. Winevaults denied ever receiving these two batches of documents.

 
Dina explained that in September 2008 Rebecca McDonald, her cousin, joined the company. Dina needed to assess how inaccurate the records were and this was a job she could not do on her own. Rebecca had no accountancy qualifications but she was used to managing up to 30 people. Becky’s task was “to put the back office in order”.

 
Regarding the laptop seized in Simon Dempsey’s car in November 2009, the computer had a log-in for Dina but it was a Nouveau company computer, which Dina sometimes used but was available for others.

 
Corsellis’ questioning then moved onto the setting up of Finbow. Dina explained that she first met Simon Dempsey in the Bar du Musée (Greenwich) in February 2009. Dempsey and Daniel were having discussions about setting up a new company, which would be selling Old World Wines (Bordeaux etc.) as Dempsey spoke good French. Dina was not involved in these discussions – “none of my business”.

Although Nouveau continued in April and May, Dina’s focus was increasingly on Finbow. Regarding using different names or persons, Dina explained that, although she had used Dina during her time as an opener, she thought it was “a natural progression” to stay as Lucy when she took over as office manager. “She didn’t see a problem with it.” She explained that at the time Nouveau was receiving a bad press from Jim Budd with the name Snelling attached to it – “a lot of bad publicity by Jim Budd”. Thus she did not want to use her surname Snelling – which could reflect badly on the company. Someone in the office suggested the name Harriet Harbridge, which she adopted. 


By July 2009 Finbow had an email account. Daniel Snelling used the name Aston. He wasn’t present at the time and this was chosen for him as he drove an Aston Martin. Dina said he would have been free to change it later on but never did.The plan to sell Old World French wines was short lived as in July and August 2009 they hadn’t sold any. So at the start of September 2009 there was a change of direction to buy cheap Italian wine and send it in containers to Hong Kong, China etc. Dina thought that the 12-month buy back guarantee showed the legitimacy of Finbow. “It insures the investor completely.”  

Dina Snelling was asked about a meeting with Mr Parsons, who was providing a new database called ACT. In his evidence earlier in the trial Parson had said that when he raised including suppliers on the database, he was warded away from the subject. Dina: "There was no need to have suppliers on the database. They had no wish for their suppliers to general knowledge. Didn't want to give out that information. Suppliers are the core of the business. Daniel guarded that information very closely. 


She was also questioned by her counsel about two companies: Merchant to Merchant and Greenleaf. Merchant to Merchant was to have been involved in containerisation, while Greenleaf would be for ethical investments – eco-friendly, pollution and water etc. It was to be based in Australia and at the end of 2009 Dina went out to set it up. However, Dina came back around February 2010 as Daniel asked her to come back to sort out the back office at Finbow. 

Corsellis closed his questioning by asking what effect this case had had on her. Dina: “devastating – both physical and emotional”. Through tears she explained that she had had to pull her daughter out of school because she had been bullied.

Cross-examination by the prosecution
This started in the last session of the day and will continue on Thursday. To be covered in the next report.


Wednesday, 19 June 2013

Nouveau World Wines/ Finbow Wines trial: Tuesday 18th June 2013 – Simon Dempsey cross examined

Defendants:
Simon Robert Dempsey
Rebecca Louise McDonald
Daniel Thomas Snelling
Dina Louise Snelling

The case, before His Honour Judge Michael Grieve QC  in Court 8 at Southwark Crown Court, is likely to conclude in some time in the first part of July. Evidence will probably finish this week or early of next. Speeches and judge's summing up will take up next week with the jury likely to retire in the first week in July to consider their verdict.

Tuesday AM
Simon Dempsey gave the first part of his evidence yesterday by answering questions from his defence counsel as well as Julian Christopher QC, prosecuting for the Crown, starting his cross-examination. I wasn't present for this part.

After a late start for the court, cross-examination of Simon Dempsey continued through the morning and into the afternoon.  

On the advice from his solicitor Dempsey made no comment to the two police officers when he was arrested and questioned at Limehouse on 4th March 2010. He was asked a series of questions – what he knew about Finbow, who was running the company and who owns it, who had control over the bank account etc.

The cross-examination was largely devoted to going through in detail various subsequent accounts given by Dempsey – in evidence to the court, a statement that Dempsey gave to the Insolvency Service (25.2.11), when he was interviewed by a Mr Stone, and his defence statement (25.10.12) that has to be prepared for this trial. Unlike when questioned by the police, the Insolvency Act requires that questions are answered. Furthermore the Perjury Act applies, so false answers could lead to a prosecution for perjury.

Before turning to his statement made to the Insolvency Service, Christopher asked Dempsey about how he came to be involved in Finbow and how he came to leave the company. Dempsey said that he had a series of meetings at Café Rouge (Bromley) with Daniel and Dina Snelling in the early part of 2009.

At this time Dempsey was unemployed as his building business had collapsed due to the economic downturn. He was declared bankrupt on 29th January 2007 and exited bankruptcy on 29th January 2008.

Dempsey explained that it was agreed that he would become a director of Finbow to assist with the general setting up of the company. In negotiation with Daniel Snelling he arranged to take a loan of £25,000 in the first instance, which was subsequently increased to £35,000. Romance with Dina Snelling blossomed in the bar of Café Rouge and he saw her most days.

Questioning then turned to how Dempsey left Finbow. He described a meeting on 9th October 2009 with Billy Davies in the square at the centre of Canary Wharf where he was given a ultimatum  to leave the company with a payment of £25,000 and a subsequent payment of £60,000 – a year’s salary as a golden handshake. Dempsey said that the £25,000 was for wages that he had not received. Dempsey said that his decision to accept was made in “a matter of seconds”. It was – “take it or leave it” – he took it. He and Davies went to a bank with the Finbow bank card and drew out the £25,000 with the Finbow bank card that Davies had brought to the meeting. Dempsey said that Davies then took the bankcard back to the Finbow office. 

Dempsey said that this was effectively the end of his involvement in Finbow. In subsequent evidence Dempsey agreed that he had been involved in subsequent payments and bank transfers. This included a transfer to Hong Kong of £10,000 on 30th October 2009. Dempsey was in Highgate when he was phoned by Rebecca McDonald, who asked him to make the transfer as she wasn’t able to leave the office. At that time Dina Snelling was in hospital. The company bank card was in the office. Snelling said he always carried photo ID with him – his driving licence. The transfer was arranged. Dempsey said he wanted to ensure “the smooth running of the business”. He was also invited to rejoin the business in early 2010 when Paul Rees, the director who succeeded Dempsey, decided to leave.
   

In Dempsey’s statement to the Insolvency Service (25.2.2011) he said that he was already in a relationship with Dina Snelling when “I was out in as a director of Finbow to learn the business”. A builder by trade Dempsey had no experience in wine. Although Finbow wasn’t a full time job, Dempsey said he visited the offices almost every day. He paid invoices and arranged the shipping. In his statement Dempsey said that, “he wasn’t keen on the man who had started the trading”.

Dempsey did not have his own office at Finbow. He used a spare, empty desk in Daniel Snelling’s office. Billy Davies also had a desk here for part of the time that Dempsey was involved in Finbow.
 
Asked why there is no mention of Billy Davies in his statement to the Insolvency Service, Dempsey said that at the time he considered Billy Davies to be “an insignificant party to the business” and “wasn’t aware how much Billy Davies had his feet under the table”.

PM
Dempsey was asked questions about his defence statement (25.10.12). In it he explained that ‘he was a married man with a daughter. He had fallen in love with Dina Snelling and that he had volunteered to become involved to cement relationship with Dina'. Christopher pointed out that there appeared to be a discrepancy in the accounts of how he became involved as a director in Finbow and whether or not his relationship with Dina preceded his involvement in the company.


The defence statement stated that Dempsey ‘had no office at Finbow' and was ‘an infrequent’ visitor to its offices'. Christopher pointed out to Dempsey that he had told the court that he was in the offices everyday (or nearly every day). Dempsey replied that he was saying that he was not full time but that he was in the offices “almost every day”. Dempsey said that his statement was “open to interpretation”.

The statement also said that he was responsible for “the organisation of wine shipments through ACE Freight Ltd”. Questioned on this, Dempsey said that he had effected the introduction of Edward and Deborah Merriman, directors of the freight company who were personal friends of his. Asked whether his statement suggested a greater involvement than an introduction, Dempsey said it was a question of “how it was interpreted".

Dempsey’s defence statement said he negotiated a parting payment with Daniel Snelling to buy himself out of the company. There is no mention of Billy Davies in this statement.

In a letter (1.2.2010) concerning the £10,000 seized on 26.11.2009 as part of an investigation into the ‘proceeds of crime’, Dempsey wrote that he ‘decided to sell interest back to Finbow. Following discussion a payment of £60,000 was agreed”. Christopher reminded Dempsey that he had told the court of his meeting with Billy Davies (9.10.09) regarding the ultimatum offer that  he had “weighed it up in a matter of seconds”.

Dempsey was asked about an envelope found at his flat when the police searched it on 4th March 2010. On the back of the envelope were a series of handwritten transactions from Finbow’s bank account. All except the first transaction listed are from after Dempsey’s departure from Finbow. The writing is Dempsey’s but he could not remember why it was complied. He could recall some but not all of the transactions listed. Some of the transactions were Royal Exchange (full title – Royal Exchange Investments Ltd), a company involving Billy Davies. Dempsey said that he did not know the level of Davies’ involvement at the time.

Dempsey was asked about the use of false names by Dina Snelling: 
Lucy Jones  during Nouveau World Wines and Harriet Harbridge during Finbow. Dempsey: "Not odd – she was in sales" adding it was "not a big issue". Christopher remarked that Dina Snelling was not in sales. She worked in the back office.

Christopher concluded his cross-examination by suggesting that Dempsey was the “official frontman for Finbow hiding the involvement of Daniel Snelling”. “This is what your role was – the name on the company notepaper.” Dempsey strongly denied this – “Not at all.” He had no suspicion that the proceeds could have come from crime.

Dempsey agreed that he had full access to the bank accounts. Christopher said that he could have seen that only three containers of wine were bought by Finbow – two going to Hong Kong and one to Nigeria. That all three containers had been paid for in September 2009, that no evidence exists of any wine bought subsequently and that from September 2009 “money from investors was coming in thick and fast".   

In conclusion Matthew Mcdonagh , Dempsey’s defence counsel, asked him some questions about the logistics of how the statement to the Insolvency Service was made – Mr Stone took notes. There was no tape recording of the two hour interview.

Dina Snelling will be giving evidence today. 

The investigation into the two companies was carried out by the Metropolitan Police. The defendants have pleaded not guilty to the charges. 




Monday, 17 June 2013

Nouveau World Wines/ Finbow Wines: trial update

Update on Nouveau World Wine/Finbow case: 17th June 2013

Today was the first chance I have had to get to Southwark Crown Court since the second morning of the trial (17th May).

Daniel Snelling has been giving evidence for the past five days and finished after a few final questions this morning. Although I was not present for the bulk of Daniel Snelling's evidence, it appears that he alleged that his supplier 'had stolen wine or money' and Winevaults (in Australian wine storage company) were 'unreliable' Mr Lovell, his defence barrister, suggested with Snelling's agreement. It was clear that Snelling would have used much stronger language.

It was established that at times Snelling sent emails using the email addresses of other people, for instance Rebecca McDonald, involved in the two companies.

Taking one example by comparing invoices and payments to Sultan Trad with records of wines held at Wine Vaults, Lovell showed there was a discrepancy of 516 bottles between various invoices and payments to Sultan Trad for 780 bottles and the 180 bottles recorded as stock at Winevaults.

Asked by his counsel what he was like at paperwork, Snelling replied: "Shocking - terrible!"

This closed the defence case for Daniel Snelling. The defence case on behalf of Simon Dempsey is now starting.

Amongst those who have given evidence is Tim Loakim, general manager of Winevaults. This was done by video link.

The four defendants have pleaded not guilty and the case continues at South Crown Court, London SE1.

Further updates to follow.  

     

Thursday, 6 June 2013

Elite Advisers' Nobles Crus wine fund suspended by CSSF – Luxembourg's financial authority

From Elite Advisers website

From Jim's Loire:

The CSSF decided to suspend the Nobles Crus wine fund on 27th May 2013 because it coud not meet the requested redemptions. On 31st May Miriam Wilson and Michel Tamisier, general partners in Elite Advisers/Elite Partners, informed their investors of the suspension. It may be significant that it would appear that it was the CSSF who stepped in rather than at the request of Elite Advisers/Elite Partners. 


Tuesday, 4 June 2013

FCA bans promotion of wine funds to ordinary retail investors


Gates@Château Mouton-Rothschild

This afternoon The Financial Conduct Authority (FCA) has banned the promotion of Unregulated Collective Investment Schemes to ordinary investors. This ban includes wine investment funds, who will only be allowed to sophisticated investors and high net worth individuals. The new rules, set out below in the FCA press release, will come into force on 1st January 2014. 

Although many of the wine investment funds, whose management needs approval from the financial authorities if based in the UK, do only sell to sophisticated investors and high net worth individuals, the ban sends out a very powerful signal that companies selling wine investments, whether they are collective investments or not, should not be colding calling and should be assessing whether the investments they offer are suitable for their individual clients.

This is a very welcome statement.

While the ban, as it currently stands, does not apply to the boiler rooms of Bromley and elsewhere, flogging individual cases of wine to individual clients, it is now official that cold calling should not be used to sell investments

Once again it is abundantly clear that the Wine Investment Association (WIA) has to come into line and ban its members from cold calling. 

The message is clear: if a company cold calls you offering wine investments, plots of land, carbon credits etc. put the phone down. The company is out of line with UK investment policy, so is a scam.       

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Press release from The Financial Conduct Authority (FCA)

FCA to ban the promotion of UCIS and certain close substitutes to ordinary retail investors


The Financial Conduct Authority (FCA) has published final rules to ban the promotion of Unregulated Collective Investment Schemes (UCIS) and certain close substitutes (together to be known as Non-Mainstream Pooled Investments (NMPIs) to the vast majority of retail investors in the UK. The rules mean that, in the retail market, promotions of these riskier and often very complex fund structures will generally be restricted to sophisticated investors and high net worth individuals for whom these products are more likely to be suitable.

The ban follows on from extensive work undertaken by the Financial Services Authority (FSA), which found that only one in every four advised sales of UCIS to retail customers was suitable and that many promotions breached the existing UCIS marketing restrictions. Concerns have also been identified in relation to products, which are close substitutes for UCIS and in relation to which the existing marketing restriction had no effect. A number of NMPIs have failed completely in recent years, leading to customers losing their total investment.  

The final rules follow a consultation period in which the FCA engaged extensively with all stakeholders and received detailed feedback. The majority of respondents agreed with the general aim of the proposals to protect ordinary retail investors from the risks arising from inappropriate promotion of NMPIs. However, the FCA has taken into consideration a number of responses about the definition of NMPIs and refined those to focus more tightly on products posing the greatest risk of inappropriate distribution to ordinary retail investors.  The FCA has also considered concerns about requirements applicable to marketing to high net worth or sophisticated retail clients and amended the proposals accordingly.

Following analysis of the feedback, a number of products now lie out of scope of the marketing restrictions. These include exchange traded products, overseas investment companies that would meet the criteria for investment trust status if based in the UK, real estate investment trusts and venture capital trusts. Enterprise investment schemes and seed enterprise investment schemes, unless structured as UCIS, are also outside the scope of the rules.  The marketing of special purpose vehicles pooling investment primarily in shares and bonds is also not restricted. Firms still need to ensure promotional communications about these products are fair, clear and not misleading, and if advice is given they must ensure any recommendation to invest is suitable to the client.

The following investments will be subject to marketing restrictions: units in qualified investor schemes (QIS), traded life policy investments, units in UCIS; and securities issued by SPVs pooling investment in assets other than listed or unlisted shares or bonds.

The FCA will continue to review market developments and, should it discover similar issues in the future that create the risk of significant potential for consumer detriment, particularly where arbitrage is taking place to avoid the marketing restrictions, it may need to consider an extension of scope of the rules. If necessary, the FCA can make a temporary product intervention rule to do this before consultation.

Christopher Woolard, director of policy risk & research, said:

“Consumers have lost substantial amounts of money investing in UCIS and similar products in recent years so the need to introduce new rules to prevent this from continuing was essential. However, we have also taken into account that for some investors these products can still be appropriate.

“We believe today’s rules strike the right balance. They should go a long way in helping to protect the majority of retail investors in the UK from inappropriate promotions while allowing the industry to market these risky, unusual or complex investment propositions to those experienced investors for whom they could be suitable options.”

The FCA is also monitoring the market in relation to products, which are not pooled investments. The industry is beginning to introduce to the retail market a range of novel securities – including contingent convertibles (CoCos), building society deferred shares and similar instruments – that were once exclusively offered to institutional investors, and which carry risks unfamiliar to and inappropriate for many ordinary retail investors.  The FCA intends to consult on the introduction of a new marketing restriction in relation to these types of products. 

Notes for editors


(http://www.fca.org.uk/news/policy-statements/ps13-03-restrictions-on-the-retail-distribution-of-unregulated-collective-investment-schemes-and-close-substitutes)

2. Examples of underlying assets sometimes held in UCIS and similar products include fine wines, crops, timber, and speculative financial instruments and traded life policies. These assets may sometimes appear to offer better returns with less volatility than more usual investment types but they are often actually higher risk investments.  The risks they carry are often esoteric and difficult to assess.  For example, they may be illiquid, difficult to value and prices may be volatile.  Governance controls can also be weaker than on more mainstream investment vehicles, which may increase the risk of product failure and loss of capital for investors.

3. Previously the FSA undertook a significant amount of work to improve standards. The FSA published guidance to firms to improve standards, including detailed findings of our file assessments and guidance on good and poor practice.  Last year the FSA issued over 250 letters to firms active in this market to repeat our concerns and highlight the key regulatory requirements that apply.

4. A list of recent enforcement notices
 against firms for providing unsuitable advice on UCIS is available.

5. On the 1 April 2013 the Financial Conduct Authority (FCA) became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA).

6. The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.


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Coverage in Press: Telegraph, Reuters,