BES investment company now refusing to pay

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goinggreen16

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I made a BES investment in a company that matured on January 1st.

The company is still trading but coming up with a variety of excuses and pleading inability to pay.

The CEO actually spent four days at a busness conference last month.

My questions are

1) Any options for chasing them for money apart from the legal route?
2) I'm not naming the company without permission although happy to do so but any ideas on how to find other victims and organise some sort of class action
3) What authorities should the company be reported to?


Any help would be much appreciated?
 
You need to do a little bit more here.

You would be a shareholder in the company - have you had notices of meetings; accounts etc and if so did you attend?

Things I would have in mind before I would launch anything:
1. What is the shareholding structure of the Company?
2. Copy of Memo and Articles
3. The BES Prospectus if any.
4. The BES promoters
5. The Directors of the Company
6. What exactly was the basis of the Investment?
7. Were there Put/Call options on the shares?
i.e. before you go anywhere you need your facts and documents assembled.
Going in have cocked to these things will cost you money.

I wold have thought a Company meeting would the starting point.

Directors responsibilities are in fact quite onerous. Do you know any of the Directors?

January is recent - they may be preparing alternatives - who knows.

It would be quite difficult to advise you here as this likely to involve a bit of detail.

I am not saying that you tell us all here - but talks of a Class Action seems somewhat premature on what you have told us.
 
The BES investment involved buying BES shares in the company which the directors committed to purchase after 5 years with an 18% growth. I was told the company were using the money as a loan.

They were recommende3d as a safe BES investment by a reputable publication in this country.

I've never received any invitations to any meetings. I don't have any information on the shareholding of the company or any other BES investors. My understanding is that there are 2 main shareholders/directors.

The shares are not traded anywhere.

So what are my rights? Can I demand a meeting be held?
 
Hello,

I imagine there are a number of BES investors in this company - why not call for a meeting of fellow investors as a first step, try to establish the facts & agree to share any future costs, then agree a strategy and work togeather.

If you don't know who the investors are, put pressure on the party who formed the BES fund to send a communication out to all concerned, inviting them to contact you (they won't release the list of investors names to you & would be wrong, to do so, but they can contact the other investors and ask them to contact you for example).

I expect you may need legal representation here. My understanding is that BES investments are not shares with voting rights & while in some cases, there is the option to convert the shares to ordinary voting shares these options are few and far between.

Regards

Mr. Earl.
 
I've tried for a meeting already. Good idea re asking them to forward my details. I've done that. I suspect it will be ignored like my other requests.

I keep repeating my point in writing and on the phone (although they are no longer available to take phone calls and never return them) that they are trading fradulently. However this is being ignored too.

My concenr is that the CEO is just burning through whatever cash they have left and will then just liquidate the company.

In the UK or the US there are penalties and these things are enforced. Here it seems you can do what you like as I see people leaving suppliers high and dry and opening up again a few weeks later debt free with no consequences.
 
@goinggreen16

I would have a look at the CRO filings - get the latest B1 and the Accounts. It is likely you will see the list of shareholders on that - or at least a start.

They have also had to file Memos Articles of Association. Therein are your rights.

What Prospectus did you get?

It sounds the way you describe it that there is a put and call option on the shares.

Two months is not necessarily 'push the nuke' button yet.
 
No response from the company is very bad news.

I think you are right to be concerned that they may be burning through any available cash while planning their next venture.

BES by its very nature is extremely high risk. I have a high appetite for risk but wouldnt touch a BES scheme or any scheme thats sold on the basis of tax breaks rather than otherwise strong fundamentals
 
@DrDebt - presumably he already had the benefit of tax relief.

Many of these schemes work well and do what they say.

Would you not think that 2 months is a bit premature?
 
Why not name the scheme on here and see if there are others in the same position. They might be able to get more answers operating as a group. How do you get the cro documents ? Do you have to pay for them ?
 
AFAIK BES shares must be ordinary shares with no preferential rights.

I note that you state the directors (and not the company) gave a committment to purchase the shares. This would tie in with the shares having no preferential rights.

Who is this agreement to purchase the shares between? Presumably you have this in writing.

Look at the original prospectus and agreements. I would be surprised if the directors gave an open ended agreement to purchase the shares without some get out clause - check the small print.

I'd be reluctant to name the company now that you've publicly alleged that they are trading fraudulently without having any apparent grounds for doing so.

You may have grounds for complaint against the promoters of the scheme if you feel it was mis-sold/mis-represented to you.
 
I have got the tax relief.

I am happy to name the company but concerned re the libel laws.

I don't think I or the other BES investors will be named in the CRO.
 
Go to Cro.ie, copy of accounts and B1 will cost you €7.

If the company has not hit the targets to repay the BES investors, then the bank and revenue will have first call on any funds if you force the issue.
 
BES investments are incredibly risky investments. The tax write off is great but there is a huge failure rate on the actual investment. I have never met someone who has made money on the back of them. Proceed with caution.


Steven
www.bluewaterfp.ie
 
I also am aware of someone who invested in a BES scheme related to the recycling business 2 years ago. Was promised by the director verbally that all BES money would be repaid in full. Got a call this year to say that things not going well with the company and that the directors are trying to sell the company at a loss. Will mean investors only get an offer of 10 % of their original investment back if buyers can be found. They have had the benefit of tax relief but even still will have to endure a substantial loss on the initial investment amount. There was a put and call agreement in place. Not sure if they have any comeback. All these BES schemes were heavily advertised in the Sunday business post annually. None mentioned the high risk nature of the schemes. Also I think there may be a tax clawback if the company folds making the losses even higher.
 
My bank has a number of clients who raised money through the BES scheme. Even the best of these has only managed to repay the investors a small portion of their original investment. Unfortunately the terms of the agreement make it virtually impossible to take any action for recovery of your funds and you are reliant on the goodwill of the management to meet some level of return.
 
I think this is good advice from earlier.
WizardDr said:
Things I would have in mind before I would launch anything:
1. What is the shareholding structure of the Company?
2. Copy of Memo and Articles
3. The BES Prospectus if any.
4. The BES promoters
5. The Directors of the Company
6. What exactly was the basis of the Investment?
7. Were there Put/Call options on the shares?
i.e. before you go anywhere you need your facts and documents assembled.
Click to expand...

If you have all this together and have your group of shareholder perhaps get in contact with a local accountant who could help you dealing with the company directors.
 
I know it's a bit late, but for BES companies I've been involved in there was always a shareholders agreement put in place at the time of the investment. Regardless of who the promoters are or how well you know them, I think this would be a sensible precaution to take.

Without an agreement, minority shareholders in private limited companies have very little power over what they can do.
 
laois1 said:
I also am aware of someone who invested in a BES scheme related to the recycling business 2 years ago. Was promised by the director verbally that all BES money would be repaid in full. Got a call this year to say that things not going well with the company and that the directors are trying to sell the company at a loss. Will mean investors only get an offer of 10 % of their original investment back if buyers can be found. They have had the benefit of tax relief but even still will have to endure a substantial loss on the initial investment amount. There was a put and call agreement in place. Not sure if they have any comeback. All these BES schemes were heavily advertised in the Sunday business post annually. None mentioned the high risk nature of the schemes. Also I think there may be a tax clawback if the company folds making the losses even higher.
Click to expand...

I know the company that you are referring to, I think at this stage the investors will not recover even 10% of their investment.
 
I know some details of a larger fund, about 5 million was the fund value it now appears to be 'managed' by an off-shore company. I am aware of one operation that received over 1 million euro for a hair brained idea, it seems this 1 million was badly managed by the recipient and also by the firm managing the fund over the five years of the plan, the 'hair brained' idea never materialised but the 1 million was spent. I would certainly question the legality of the behaviour of both parties were I an investor in the fund. This firm has not paid back any of the investment.
Should anyone that was an investor in a fund wants to pm me, perhaps I can assist.
 
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