Emerald bond fund owes me £25,000: TONY HETHERINGTON investigates

Tony Hetherington is Financial Mail on Sunday’s ace investigator, fighting readers corners, revealing the truth that lies behind closed doors and winning victories for those who have been left out-of-pocket. Find out how to contact him below.

W.L. writes: I invested in a bond issued by Cauta Capital Limited. The bond scheme is now finished, but I cannot get redemption of my capital or payment of interest that is due. I am told this depends on a sale of emeralds that suffers from constant delays.

Tony Hetherington replies:  The calculations you sent me show that Cauta Capital owes you £25,000 on the redemption of your bond, and almost £5,000 in unpaid interest after payments dried up in 2021.

On paper, none of this should be a problem. When you invested in 2017, the company’s own accounts show it was worth £69 million. Even as recently as 2022, while it owed £11 million – mostly to bondholders – its assets stood at £19 million.

Since then, the company has filed no accounts, making it impossible to judge whether it is still solvent. This is an offence, and officials at Companies House have begun proceedings to have Cauta Capital struck off.

Losing their sparkle: How did Cauta Capital end up speculating in emeralds?

Yet there were no warning flags when you lent your money. Its bonds were promoted with a whole list of assurances. Cauta would lend money to other businesses only if they pledged their own assets to Cauta, and projects would be financed only if the asset value of the project was far greater than the loan itself.

Better still, Cauta appointed an independent trustee to hold a legal charge worth more than £28 million of its assets as a safety net. So how did you end up being owed thousands of pounds? And how did Cauta end up speculating in emeralds with your money?

I put this to the company’s owner and sole director. He is William Abundes, an American living in Luxembourg, who played a major role as a campaigner for Donald Trump, recruiting Americans in Europe to vote for him in the 2016 presidential election.

He told me: ‘The shift towards trading in precious stones, specifically emeralds, was a strategic decision made in response to unexpected losses the company incurred following an investment made in a European property development.’

When I pressed Abundes on how this could be allowed, given that no such gemstone trading was ever mentioned when the bonds were launched, he replied that the investment terms do mention ‘secured joint ventures’. That description is so vague it could be used to justify investing in land on the moon.

I repeatedly asked Abundes where the company’s assets had gone, what had happened to the £28 million safety net and why no accounts had appeared.

Abundes failed to answer.

Its trustee to protect bondholders’ interests is accountant Graham Arnott. He has carved a niche for himself as an administrator and trustee for fringe companies that issue bonds.

He told me: ‘We were not aware of the change from company investments to gemstones… I was only made aware when it sought assistance from an insolvency practitioner last year.’

An insolvency practitioner! Now there is something that Mr Abundes had not mentioned, and it puts into serious doubt whether Cauta Capital actually has the millions of pounds supposedly guaranteed to make investors feel secure.

Graham Arnott has now asked Companies House not to have the company struck off and dissolved. He told me: ‘We will follow this very carefully and instruct our solicitors if necessary to protect the integrity of our legal charge.’

Let me add to this by suggesting the Insolvency Service take a close look at Cauta Capital. A company worth £69 million, which then borrows millions more from investors, only to sink into a mess so bad that it now can’t say what it is worth, warrants inspection.

As for the invisible Cauta accounts, boss William Abundes should follow the advice of his hero Donald Trump – who was asked about the information he would have to disclose if he ran for office: ‘I look very much forward to showing my financials… because they’re huge.’

I doubt the same could be said for Cauta Capital.

Gas firm billed my dead brother

P.C. writes: My brother died in July and we found a prepayment British Gas card in his rented flat. It was unused, so we requested a refund a week after his death.

British Gas said nothing could be done until Croydon Council confirmed the end of his tenancy, which was at the end of last August.

British Gas then kept collecting their standing charges from the card until every penny was swallowed up, even though nobody was in the flat. It was a rip-off.

Rip-off: British Gas then kept collecting their standing charges from the card until every penny was swallowed up, even though nobody was in the flat

Tony Hetherington replies: As you pointed out to me, people who use prepayment cards are normally not very well-off – your brother was no exception. He left debts to pay and, as his only next of kin, all the necessary arrangements fell to you.

This was not easy, as you are 84, but trying to deal with British Gas made things far worse than they should have been, especially as it carried on applying its daily standing charges until the prepaid money ran out in December – five months after your brother died.

The standing charge is applied daily, even to empty properties. But common sense and a kinder response came when I suggested to British Gas that as your brother’s tenancy ended last August then, if anyone should foot the bill after that, it should be the owner of the flat – Croydon Council.

You soon received a phone call saying there had been a change of heart. Your brother’s estate has now received a refund of slightly more than the £100 credited on his prepaid card. And you have received an extra £100 by way of British Gas saying sorry.

A good outcome.

If you believe you are the victim of financial wrongdoing, write to Tony Hetherington at Financial Mail, 9 Derry Street, London W8 5HY or email [email protected]. Because of the high volume of enquiries, personal replies cannot be given. Please send only copies of original documents, which we regret cannot be returned.