Basset & Gold Enters Administration - How Much will Investors Get?
Basset & Gold was a company featured on this blog last year warning of the risks that weren't adequately being explained in my view and this was highlighted in my review of Basset & Gold ISA. As of today it has been placed in administration as per the message below on their website.
According to the FAQ section on the B&G website there were around 1800 bondholders that invested a total of £36 million in B&G, giving an average of around £20,000 per investor although this is likely to mask bondholders that invested much higher or lower amounts when the minimum was £1000.
I doubt people investing in their bonds were fully aware of the risks to their capital that they were taking. According to the FAQ the administrators expect many bondholders to be covered by the FSCS so hopefully the return of capital will be higher than for other mini bond companies that have gone bust where investors have received from nothing up to 25%.
If this is the case and FSCS has protected bondholders in B&G it shows further how badly the system is broken when other banks and financial institutions will be paying the costs for an unregulated bond firm going under.
With a promised return of 3.14% investors in the B&G bond were taking risk for very little return. The adverts were promoting it as a cash bond account but the capital was at risk.
The advice I gave at the time still stands and applies to any mini bonds you may be considering.
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According to the FAQ section on the B&G website there were around 1800 bondholders that invested a total of £36 million in B&G, giving an average of around £20,000 per investor although this is likely to mask bondholders that invested much higher or lower amounts when the minimum was £1000.
I doubt people investing in their bonds were fully aware of the risks to their capital that they were taking. According to the FAQ the administrators expect many bondholders to be covered by the FSCS so hopefully the return of capital will be higher than for other mini bond companies that have gone bust where investors have received from nothing up to 25%.
If this is the case and FSCS has protected bondholders in B&G it shows further how badly the system is broken when other banks and financial institutions will be paying the costs for an unregulated bond firm going under.
With a promised return of 3.14% investors in the B&G bond were taking risk for very little return. The adverts were promoting it as a cash bond account but the capital was at risk.
The advice I gave at the time still stands and applies to any mini bonds you may be considering.
We are unable to give financial advice but if you are considering investment in the B&G bonds then think about whether you would be affected if the investment failed and you lost all your money invested in the bond. If you are looking for the safety and security of a savings account then this is not the product for you.
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| Basset & Gold Enters Administration |
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Paul Boyle, David Clements and Tony Murphy of Harrisons Business Recovery and Insolvency (London) Limited were appointed as joint administrators of Basset & Gold PLC (the Company) on 1 April 2020 (the Joint Administrators). They were also appointed as joint administrators of B&G Finance Limited (B&G Finance), a related company, on the same date.
The Company which is not regulated by the FCA, issued bonds which were sold to retail consumers. B&G Finance, which is regulated by the FCA, acted as an intermediary between the Company and investors, arranging investments in the bonds sold by the Company.
Following the appointment of the Joint Administrators there will be no further bond issuances or related investment activity. No bonds have been issued to retail investors from May 2019.
The Company’s customer service team remains available to assist existing customers with any queries.
The Joint Administrators will conduct an orderly wind down of the business and seek to recover the assets of the Company for the benefit of its creditors. The Joint Administrators will also conduct an orderly wind down of the business of B&G Finance and seek to recover the assets of that company for the benefit of its own creditors.
The Joint Administrators will also commence work to identify all creditors of the Company in accordance with their statutory duties and obligations under the Insolvency Act 1986. The same will apply in relation to B&G Finance. Those customers with complaints should approach the Company in administration in the first instance although it may subsequently be identified that the claim should rest with B&G Finance. Any such claim will therefore be treated as an unsecured creditor claim of either the Company or B&G Finance. The Financial Services Compensation Scheme (FSCS) anticipates it may start to receive claims from investors against B&G Finance and has determined that many investors have a good prospect of claiming compensation. The FSCS is operationally independent of the FCA and it is the FSCS that determines whether compensation is payable under the FCA’s compensation rules. Bondholders can find further information at https://www.fscs.org.uk.
The Company in administration is not FCA authorised. This is because issuing bonds is not normally a regulated activity. B&G Finance remains authorised by the FCA, albeit now in administration, and remains subject to supervisory oversight and the FCA’s rules. The Joint Administrators are officers of the Court and need to comply with all insolvency law. Each is a licensed insolvency practitioner.
For all enquiries please contact bassetgold@harrisons.uk.com or call 0800 464 7767. Please refer to the Basset & Gold website for further updates.
Please remember, be aware to scams. Never give personal information or account details to anyone who contacts you unexpectedly. We will never ask for your bank details.
B&G were not FCA authorised but the FSCS are/have accepted customer claims for compensation??? How's that work again?
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